wp_set_post_terms, example needed

here is the thing, i think i do not understand the function correctly wp_set_post_terms() so i need a helping hand here.

i have a custom post type “products”, with custom taxonomy “product-category”.

i have te following:

add_post_meta($post_id, 'product_color', 'red', 1);

$terms = array( 'cars', 'boats', 'bicycle' );

wp_set_post_terms( $post_id, $terms, 'product-category');

the post meta is correctly added, so what am i doing wrong with the wp_set_post_terms function?