A working glossary of terms used throughout these guides. More terms will be added as new content areas launch.
VIN (Vehicle Identification Number) A unique 17-character code assigned to every vehicle from model year 1981 onward, encoding details like year, make, model and manufacturing plant.
OEM (Original Equipment Manufacturer) Refers to parts made by, or to the specification of, the company that originally built the vehicle — as opposed to aftermarket parts made by a third party.
CPO (Certified Pre-Owned) A used vehicle that has passed a manufacturer-defined inspection and reconditioning process, and typically comes with additional manufacturer-backed warranty coverage beyond what a standard used vehicle would have. Some dealers also use "certified" for their own programs, which aren't backed by the manufacturer — it's worth asking whose certification it is.
GAP (Guaranteed Asset Protection) Coverage that pays the difference between what you owe on a loan or lease and the vehicle's actual cash value if it's totaled or stolen — relevant because a vehicle's loan balance can exceed its depreciated value, especially early in a loan term.
Powertrain The components that generate power and deliver it to the wheels — generally the engine, transmission/transaxle, and drivetrain components.
Drivetrain The components that transmit power from the transmission to the wheels — technically a subset of the powertrain, though the two terms are sometimes used loosely to mean the same thing.
Deductible The amount you pay out of pocket on an approved, covered repair before a warranty or service contract pays the rest.
Wear and tear Gradual deterioration from normal use — tires, brake pads, wiper blades, batteries — which warranties and service contracts typically exclude, since it isn't caused by a defect.
TSB (Technical Service Bulletin) A notice issued by a manufacturer to its dealer network describing a known issue and the recommended fix — not the same as a recall, since a TSB isn't a safety-related, legally mandated repair, but it can indicate a known, common problem with a given vehicle.
AWD / 4WD (All-Wheel Drive / Four-Wheel Drive) Drivetrain systems that send power to more than two wheels. The terms aren't interchangeable — they describe different mechanical systems with different typical use cases — though usage varies by manufacturer.
APR (Annual Percentage Rate) The yearly cost of a loan, expressed as a percentage, including interest and (depending on how it's calculated) certain fees — the standard figure for comparing loan offers.
CVT / DCT (Continuously Variable Transmission / Dual-Clutch Transmission) Two different automatic transmission designs. A CVT uses a belt-and-pulley system with no fixed gears; a DCT uses two separate clutches to pre-select the next gear for faster shifts.
LTV (Loan-to-Value) The ratio of a loan amount to the value of the asset securing it — relevant to auto financing because a high LTV loan (borrowing close to or more than the vehicle's value) increases the risk of owing more than the car is worth.
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