Useful Car Terms To Know

Talking about cars can get complicated at times, especially if you’re not familiar with the terminology. The following articles explain some automotive terms you may come across in different situations, from trading in a vehicle to getting a service.


Trade-in value and/or allowance
The trade-in value of your car is the amount that your dealer is willing to offer you to buy your old car. This amount can be influenced by a number of factors ranging from the condition of your car to the car you are interested in buying. Once you have agreed on a trade-in value with the dealer, a trade-in allowance should also be established. The allowance is the amount by which the dealer will reduce the “out the door costs” of your new car as a result of trading in your old one. This is like a credit from the sale of your used car that is put toward the purchase of your new vehicle.

Retail value
Unlike trade-in value, which is more dealer controlled, retail value is more dictated by the market and buying public. It represents the amount of money for which the dealer can expect to (re)sell your used car to another party. A dealer may be able to sell your car for much more than they allow you for the trade in, so research the potential market value and take what you find into consideration when trading in. Ultimately, you may decide it more advantageous to try and sell the car on your own and then just buy a new car without a trade-in.

Car terms to know when trading in a carLoan value
When you get to the stage of purchasing and financing your new car, the loan value is the amount of financing that the lender is willing to provide toward the purchase of the car. This amount can depend on a number of factors including your financial stability, credit score, or even the conditions of an unfulfilled loan on your current car. In order to get the most favorable financing, you may need to pay off any current auto loan.

Negative equity, upside down and rolling over
When trading in, dealers may offer to pay off the balance of your loan on your current car, despite the cost. Be careful to make sure you do not get into a situation of negative equity (also referred to as being “upside down” on your car loan) where you owe more on your loan than the car is actually worth. You need to look closely at the terms of your trade in. Some dealers may mislead customers into thinking they will pay off any outstanding loan even if the balance is higher than the total worth of the car being traded. Many times they will simply try “rolling over” a portion of the original loan balance into (or on top of) the new loan. Dealers are supposed to disclose all the terms of a loan.

If you’re looking to trade in your existing vehicle and purchase a new one with the help of an auto loan, consider RoadLoans, which accepts applications from people with all types of credit.

Boost your automotive knowledge with more practical car terms to know when filling up at the pump, getting a service and getting an oil change.


Wheel alignment and balancing
Wheel alignment – This procedure is an adjustment of the angles of the wheels in order to keep them perpendicular to the ground and ensure that they are parallel to each other. With straight track wheels, your car (and your pocket book) will benefit as you’re more likely to get the maximum life span out of your tires.

Wheel balancing – Wheel balancing is when lead weights are systematically distributed and attached onto the car rims to account for any damage or imperfections that might exist on a particular wheel assembly. They can be used to patch up blemishes or weigh down certain parts of the wheel so the weight is evenly distributed. This technique helps to improve the overall steering of your car, minimizing any vibrations and giving you a smooth ride.

Engine flush 
An engine flush essentially gets all the gunk or engine buildup cleaned out of the engine. A flush entails pouring chemicals into the engine to clean out the debris and possible buildup from engine activity. The chemicals are later flushed out, leaving the engine nice and clean. Fresh oil is then poured back into the engine. This should result in noticeably improved performance and hopefully also lead to prolonging the life span of your engine.

Shocks and struts replacement
Shocks – They form a crucial part of the steering system that affects alignment angles. They are a device that helps absorb the oscillating movement of the springs, and keeps the car from excessive bouncing as you navigate the roads.

Struts – Together these form another component that helps absorb movement in the springs. Struts are also a structural part of the suspension system that helps keep the vehicle suspended above the wheels without too much pressure and vibration.

Worn shocks and struts may need to be replaced to keep your vehicle’s suspension system in good order, and can improve control, safety, stability and braking distance.

These are just a few common services that car owners may come across when taking their vehicles into the garage. Hopefully you will find these car terms helpful when next getting a service, and they will make you more knowledgeable about what is actually being done to your car.

And if you’re getting your oil changed during a service, our “Car terms to know when getting an oil change” article can help you understand the different options.


When you’re at the gas station, it may be the price per gallon that catches your attention. But besides knowing the cost of what’s going into your tank, what about the type of gasoline you’re pumping? Here are some car terms to know when filling up at the pump.

Premium vs. regular

The main difference between premium and regular gas is that premium contains a higher amount of octane. Manufacturers have gotten so refined in their engine designs that they specify the appropriate grade of gasoline for each car model. The majority of cars on the market today use the low octane, regular gasoline. Check the automaker’s recommendation for your vehicle in the owner’s manual. As cars age, it may be appropriate to occasionally fill up with a higher-octane fuel, but you should also check your vehicle manufacturer’s advice, or with your mechanic, before doing this.

Octane rating

If you have ever seen a percentage figure on the pump, such as 87, 89, 91, 92 and 93, that number is the octane rating and simply judges the volatility of the gasoline. Regular gasoline is often 87, mid-grade is typically 89, and premium usually 92 or 93. Products with lower percentages of octane burn more easily, and those with higher ratings can help prevent what is known as “engine knock.” Engine knock is when your engine literally starts making a knocking noise, and it’s not a good sign. While most vehicles are suited to octane 87, luxury vehicles may require premium gas with higher levels of octane. But, again, check your owner’s manual.

The Federal Trade Commission advises, “in most cases, using a higher octane gasoline than your owner’s manual recommends offers absolutely no benefit. It won’t make your car perform better, go faster, get better mileage, or run cleaner.”

Ultra-low-sulfur diesel

Perhaps you’ve seen signs for ultra-low-sulfur diesel (ULSD) but wondered what it actually means. ULSD accounts for nearly all the diesel available in the U.S. and burns more cleanly than low-sulfur diesel. It was introduced to meet emission standards for cleaner full.

In addition to the more standard fuel products available, here are some alternatives you may also find at some gas stations.


Biodiesel is a renewable, biodegradable, more eco-friendly fuel type. It can be domestically produced and usually consists of vegetable oil and certain fats or greases. This particular product is friendly to the environment by reducing emissions that normal gas may emit as it burns. Unfortunately, depending on where you live, a fueling station that offers biodiesel may be a little hard to find.


Propane is another eco-friendly alternative to the traditional car fuels. This product blend is probably the most widespread alternative to gasoline. Like biodiesel, it is clean burning and leaves reduced levels of residue in the air. Propane can also offer a high octane rating and high-energy value for an alternative gasoline product.

Become more informed about your vehicle and taking care of it. Read our car terms to know when getting a service, and when getting an oil change.