Auto broker: Someone you can hire to help you shop for a car. An auto broker may work for a handful of dealers or a single dealer.

Blue Book: The National Auto Dealers’ Association’s Used Car Book, listing estimated used car prices based on model, make, year and mileage. The pocket-sized “Blue Book” is actually orange.

Buyer’s Guide: A double–sided form that the dealer fills out to tell you whether or not the vehicle comes with a warranty, and, if so, what the warranty includes. The Federal Trade Commission requires all dealerships to display the Buyer’s Guide in the vehicle’s window. Credit life insurance: Your finance company may require this. It ensures that the finance company loaning you money to buy your car will be among the first creditors paid if you should die before you pay off your car loan.

Credit disability insurance: Your finance company may require this along with credit life insurance. It ensures the finance company loaning you money to buy your car will be among the first creditors paid if you become disabled and unable to work to pay off your car loan.

Dealer: A car dealer is anyone who sells more than three cars in a 12–month period. A dealer must be licensed and abide by all laws that apply to dealers, including the state’s Used Car Warranty Law.

Dealer invoice: This is often represented as the price the dealer pays the manufacturer for the car. However, holdbacks and other incentives almost always reduce the dealer’s cost.

Deductible: A car warranty usually specifies a “deductible” amount, an amount you must pay whenever you have a warrantied part on your car repaired.

Depreciation: The reduced value of a car after you buy it. A brand new car can lose or “depreciate” between several hundred and several thousand dollars in value the minute you drive off the dealer’s lot.

Extended warranty: This is also referred to as a service contract. It is an option you may purchase on a new car and some used cars. The extended warranty should cover car repairs over a longer period than the manufacturer’s warranty, which comes with the car. Beware that it is a highprofit item for a dealer. Check to see exactly what it includes, and remember that you can negotiate the price.

Holdback: An amount the manufacturer pays the dealer each time the dealer sells its make. Also referred to as a “kickback.”

Lemon Law: Massachusetts Lemon Laws requires that a car seller repair or replace a motor vehicle with defects or problems covered under the warranty, which the vehicle owner reports within the warranty period. Read about the laws in Chapter 5 to see if they apply to your car. Leasing: This is like long-term car rental. You make monthly payments for the opportunity to drive a car, but the leasing company owns it.

Options: These are extras you can have added to a standard vehicle, and usually come in packages. They often include air bags, anti-lock brakes, power locks and windows, rear wiper, rear defroster, and such comfort items as velour or leather seat coverings.

Prior salvage: If a car was totaled and then rebuilt, the car’s title must be marked “salvage.” After being rebuilt it may not be as structurally sound as another car.

Recall: If a car model has a defect, a manufacturer may issue a “recall” notice, meaning that the defect will be fixed at the manufacturer’s expense.

Repossession: If you do not make your car loan payments, you risk having your car “repossessed” or taken back by the lender that gave you the loan. Always contact the lender immediately if you are not going to make a monthly payment. The lender may be willing to work with you to set up a payment plan.

Service contract: Also called an “extended warranty,” it supplements the manufacturer’s warranty which comes with a vehicle you purchase. A service contract is a high-profit item for the dealer. Make sure it offers substantially more coverage than the standard warranty.

Title: The title shows a vehicle’s ownership history. It is important to check the title of a used car and to contact past owners listed to verify the mileage and inquire about the car’s maintenance.

Used Car Warranty Law: A state law that protects used car buyers. It says that used car dealers must provide basic warranty coverage for most used cars and small trucks sold to Massachusetts buyers. Read more about the law in Chapter 5.

Warranty: All new and many used cars come with warranties. A warranty offers a guarantee that certain mechanical and body parts will be repaired if they are not in proper working condition. The warranty is typically limited, so find out what the limitations are.