'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..

A head unit usually consists of a combination of a radio, tape player, or CD/DVD player. Newer head units are now emphasizing on digital music support (MP3, WMA, and AAC formats) and USB, Bluetooth, and Wi-Fi connectivity.

Today most of the cars come with at least a CD player / CD recorder, and some come with option for a car stereo CD changers able to hold multiple disks in the head unit itself or in a separate unit located in a trunk or console. Today main type of CD changers can be categorised into External Cartridge, Internal Cartridge and Carousel CD changers.

Stereo (short for stereophonic sound) uses two or more audio channels to reproduce sounds to create natural impressions. The idea is that, as with natural hearing, sound appears to come from various directions. Car audio stereos typically use two channels, each providing data for several speakers at the same time.

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.