Alright, so owning a car is more than just driving around. There are so many things you need to know, and really, it comes down to simply understanding a few key terms. Let’s be honest… Whenever you have even the most basic of conversations about anything to do with your car, it can feel a bit like talking a foreign language.
Fear not. We’ve got your back with a royal guide to the car lingo you need to know. What we’ve done, to make it easier to skim, is to break up the lingo into a few chunks. Hopefully this will help you decode all that confusing jargon.
Chunk 1. The terms you should know before you buy a car
- VIN (Vehicle identification number): It’s like your car’s unique fingerprint and a quick check through TransUnion or Carfax can use the VIN to reveal a car’s history, including any major accidents or if it was ever stolen.
- Service history: This is kind of like a car’s medical history. What you’re looking for are regular entries, showing that the car has been well cared for.
- Ownership history: Details about how many people have owned the car, and fewer owners often = a more reliable ride.
- Accident history: This important history reveals how many fender benders (or worse) the car has been in.
- Recall info: Sometimes cars have defects that lead to recalls. You definitely want to check if the car was ever recalled and if the repairs were made.
- Mileage verification: This is checking that the mileage is accurate, which you can verify with service records and the car’s condition.
Chunk 2. The words you should know when it comes to cars and money
- Retail value: The average amount a dealership would sell a car for, and it’s the highest average value.
- Market value: This is what you’d get if you sold your car privately.
- Trade-in value: The amount a dealership would pay for your car if you traded it in, and it’s usually the lowest of the 3 values.
- Deposit: Usually an optional amount of money you pay upfront when you buy a car. Also, a deposit can lower your monthly payments and total interest.
- Pre-approval: Getting pre-approved for a loan means a bank agrees to lend you a certain amount at a set interest rate before you start car shopping. It helps you know your budget and might get you a better deal.
- Loan term: The length of time to repay the loan. Just so you know, shorter terms usually = less interest + higher monthly payments.
- Lease: This is when you pay to use a car for a set period, usually with lower monthly payments and strict mileage limits and conditions on the car’s condition.
- Residual value: The car’s expected value at the end of the lease. It affects monthly payments and the buyout price if you choose to purchase your leased car.
- Balloon payment: A large payment due at the end of a loan term. Taking a balloon can reduce monthly payments but requires a big payout at the end.
- Equity: The difference between the car’s worth and what you still owe.
Chunk 3. Insurance and warranty words
- Comprehensive cover: The most expensive option that covers the most risks, including damage from accidents, natural events, vandalism, theft, and fire.
- Third party, fire and theft: A cheaper option which covers damage by fire or theft, and damage your car causes to third parties, but not accidental damage to your own car.
- Third party only: The cheapest option, which covers the damage your car causes to others’ property but not your own car.
- Shortfall cover: A type of insurance that covers the difference between your insurance payout and what you owe on your loan if your car is totalled or stolen.
- Extended warranty: Extends coverage beyond the manufacturer’s warranty. Evaluate the cost against potential repairs to see if it’s worth it.
Chunk 4. Words you need to know once you’re a car owner
- Depreciation: The rate at which your car loses value over time, starting the moment you drive it off the lot. That was the ‘ah-ha’ realisation that the king had all those years ago when he started King Price and introduced our decreasing premiums pricing model.
- Total cost of ownership (TCO): Includes depreciation, insurance, maintenance, fuel, and taxes. It helps you see beyond the purchase price.
- Service plans: These plans cover regular check-ups, parts, labour, and taxes for a set period or mileage. Essentially, you pay today’s prices for future services, helping you budget without worrying about price increases.
- Maintenance costs: This is the money you spend to keep your car running well. Plan and save for these costs to keep your car in good shape.
The king’s got your back
So, there you have it. Understanding these terms is your first step towards making informed decisions around buying, insuring, and looking after your car.
Don’t forget, the king has car insurance that comes with affordable premiums, royal service that puts you first, and cover that has your back.
WhatsApp King Price on 0860 50 50 50 for a commitment-free quote or click here and visit our website to see for yourself.
Psst… This blog provides general info only, and doesn’t count as financial or product advice from King Price or our legal and compliance experts. Remember, all our premiums are risk-profile-dependent, and T’s and C’s apply. Our most up-to-date KPPD (policy wording) can always be found here.
Our website T’s and C’s can be found here.
