On the Balance Sheet
These are highly collectible receivables from financing instutions paying on behalf of customers.
What are Contracts in Transit?
An exchange of vehicles between dealers allowing the salesperson to gain the business of a customer who walks onto the lot.
What is a Dealer Trade?
An invoice for repairs performed by the service department for retail customers, warranty repairs, or internal repairs.
What is a Repair Order or RO?
This sounds like a architecture term, but in dealerships it's the line of credit that finances vehicle inventories.
What is a Floor Plan?
Known by this abbreviation, this department refers to sales of financing and insurance products.
What is F&I?
Cash down payments for vehicles, service, or parts held by the dealership.
What are Customer Deposits?
Dealers don't want to be in this situation where they have sold a vehicle but did not pay off the floorplan liability in time.
What is Out of Trust?
Daily Double! Does anybody really know what DHOR stands for?
This isn't protection against a popular clothing brand, but is a dealership aftermarket product to protect you if your car is totaled or stolen and you owe more than the car is worth!
What is Gap Insurance?
An amount billed to a dealership by finance or insurance companies as a result of the cancellation or early retirement of a finance or insurance agreement.
What is a Chargeback?
You will see this liability on the balance sheet related to the balance owed on a trade in vehicle.
What is a Lien Payoff?
Examples of this include Reynolds, CDK, DealerTrack...
What are DMS's?
Inventory-related compensation received from the manufacturer and can reduce the price of a vehicle to a customer or cost to the dealership. This is recorded as a receivable at the time of deal posting.
This isn't actually something you can wear, but refers to the folder holding the paperwork for a vehicle sale.
What is a Deal Jacket?
This is extra money invested with the floorplan holder and earns interest typically at the floorplan rate.
What is a CMA Account?
An amount added to the cost of inventory to account for overhead charges and to artificially inflate the value of vehicles in order to increase sales prices!
What are Packs?
Not variable, these "operations" of the dealership include service, parts, and body.
What are Fixed Operations?
This is not an actual animal, but a reward given to a person for a sales referral.
What is a Bird Dog?
This has a cool name and is extra pay earned by a salesperson for meeting certain sales goals; many times given in cash and later taxed on the employee’s paycheck.
What is a Spiff?
A receivable from a manufacturer related to the dealer taking in new inventory and is paid quarterly or monthly.
What is Holdback?
Named after a Senator, this "sticker" is placed on a new vehicle by the manufacturer that presents federally required information.
What is a Monroney Sticker?
This "rate" is the percentage of customers who purchase a vehicle and also purchase finance or insurance products.
What is the Penetration Rate?
This is not an organic soda or what you see when you look up, but is the goodwill of the dealership.
What is Blue Sky?
The payment of a portion of the floor plan liability that is owed on certain vehicles that have not sold within a stated time period to ensure that the amount financed does not exceed fair value.
What is Curtailment?