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'Car audio' is a general term describing the sound system fitted inside an automobile. Similarly, the term 'stock car audio system' refers to the sound system specified by the manufacturer when the car was built. A custom car audio installation, on the other hand, can involve anything from upgrading of the radio head-unit to a full-scale modification of the car based around its audio equipment - such as subwoofers, stereo CD changers, etc..

Most commonly used audio equipment is the radio/tape player/CD player/DVD Player which is generically described as a Head unit. Recent developments in head unit technology have been the addition of CD players with MP3, WMA, AAC, and USB, Bluetooth and Wi-Fi support.

CD players/ CD recorders have become standard inclusions in most modern vehicles, with the option to add a CD changer, which holds multiple CDs either in the main unit or in the trunk or console. The most common types of CD changers are External Cartridge, Internal Cartridge and Carousel CD changers.

Stereophonic sound, commonly called stereo, is the reproduction of sound using two or more independent audio channels in way to create a natural impression of sound heard from various directions, similar to that in natural hearing. In popular usage, car audio stereos usually mean 2-channel sound recording and sound reproduction using data for more than one speaker simultaneously.

Before stereo radio, speakers were often located in the middle of the dashboard through perforations pointed at the front windshield. When stereo systems became available, car audio speakers came to be located in doors and in the rear of the vehicle in parcel shelves. In modern cars, kick panel enclosures are used for high-end and competition stereo systems and allow for larger drivers and better driver placement.

The amplifiers are used to drive the speakers. These provide the necessary music power, which is measured in watts. An amplifier is a very important component of good car audio speakers system. One should always ensure that the total power handling capacity of the speakers connected to the amplifier or head unit is greater than the power of the amplifier or head unit.