The ABC’s of Successful Vehicle Purchasing

MSRP, APR, GAP? Credit union customers should be familiar with key terms regarding their next car purchase.


By Enterprise Car Sales


You shouldn’t have to be an acronym expert to purchase a new or used vehicle. But the alphabet soup that comes with buying an automobile today – MSRP, APR, GAP, NADA, ASE – can leave some people sending out an SOS.

When Shopping:

  • Certified Used Vehicle: Many manufacturers and dealers evaluate the condition of a used vehicle – and “certify” it – via an inspection. Most of the inspections performed by manufacturers, dealers, and other car sellers are rigorous and comprehensive – 100 points or more, including all major systems and components such as brakes, steering, suspension, transmission, electrical, air conditioning, and heating. Certified used vehicles also often come with extended warranties and special financing, among other perks.
  • Manufacturer’s Suggested Retail Price (MSRP).
  • Vehicle Identification Number (VIN):A ll cars and light trucks built since 1982 have a unique 17-character VIN that provides access to valuable information about that vehicle's history. The VIN is found on dashboards, driver's side door jamb stickers, and title documents
  • Limited Power Train Warranty: This generally covers engine, transmission, transaxle, and drive system – parts related to getting power from the engine to the drive wheels for a time specified in miles/months.
  • CARFAX: This company provides complete vehicle history reports that can uncover costly hidden damages, such as flood damage, odometer fraud, even a vehicle that has been totaled or rebuilt. Used-car shoppers can get reassurance that they’re not buying a damaged vehicle or lemon in seconds by simply entering the vehicle’s VIN at

When Purchasing:

  • Zero Percent Financing: These three simple words have complicated the lives of many credit union executives the past couple of years when it comes to securing automobile loans. To combat this incentive in an effort to secure members’ automobile loans, many credit unions are partnering with car sellers.
  • APR (Annual Percentage Rate): This is the yearly rate charged to a consumer to borrow the finance company’s money. This is usually a percentage. Credit unions are among the most competitive vehicle lenders, often offering the best rates and superior service. They focus on member service, not the bottom line
  • Equity (vehicle): The value of the vehicle, minus the outstanding loan amount or payoff.
  • Gap Waiver/Insurance: Waiver/Insurance that covers the "gap" between the actual value of an automobile at the time of a total loss, and the amount a person still owes the finance company. Due to depreciation of new cars and deals like “zero percent financing” and “no payments until next year,” vehicle owners can be left with thousands of dollars to pay from their own pocket if they do not have gap waiver/insurance on their loan.
  • Term: The amount of time an individual has to pay back the money that was borrowed. This is generally 12 to 72 months.

When Maintaining:

  • ASE-Certified Master Technician: People should strongly consider having an ASE‑certified mechanic handle the maintenance on their vehicle. The National Institute for Automotive Service Excellence’s main function is to test and certify technicians. It’s a process that includes a series of tests written to measure a technician’s knowledge of diagnostic and repair skills necessary for competent job performance. Based on the tests taken and passed, levels of certification are given. By passing difficult, national tests, these mechanics prove they are the best. Certification tests need to be retaken every five years, so car owners can rest assured ASE-certified mechanics are up-to-speed on all the latest in the automotive industry.
  • Break-in Period: Close attention needs to be paid during the first 600 miles of driving a new car. Avoid quick acceleration and hard breaking during this time.
  • Recall: When a vehicle experiences a safety-related defect or does not comply with federal motor vehicle safety standards, a manufacturer must notify the National Highway Traffic Safety Administration (NHTSA), dealers, distributors, and vehicle owners. The manufacturer must remedy the problem at no charge to the vehicle owner. Members should not ignore letters from the manufacturer!
  • UTQG: The Uniform Tire Quality Grading is the standard set to measure treadwear, traction, and temperature of tires. These grades are good for comparing one tire to another on a basic level, keeping in mind that most high-performance tires will exceed any government minimum standard. Members can compare their vehicle’s needs with the tire grading to determine the best tire for their vehicle.
  • Service Records: Maintaining receipts and records of an automobile’s service history can benefit both buyers and sellers. Service records provide proof that an automobile has been properly maintained, from regular oil changes to tune-ups and beyond. If you’re buying, ask for the service record; if you’re selling, don’t wait for the prospective buyer to ask for it.

Enterprise Rent-A-Car founder Jack Taylor helped pioneer the idea of no-haggle pricing in 1962. At Enterprise Car Sales, all of its more than 120 makes and models of high-quality, late-model used vehicles are priced below Kelley Blue Book and NADA Official Used Gar Guide quotes.

Enterprise guarantees that when a credit union sends members to their company for a used vehicle purchase, the credit union receives 100 percent of the loans, 100 percent of the time.

For more information on auto-buying and credit union partnering, please visit or contact Brooke Gilchrist at


This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

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Dec. 5, 2005


  • It is very helpful.