Looking to buy a new car or truck at the lowest possible price? Then you need to know the true dealer cost of the new vehicle you're looking to buy. True dealer cost is definitely not the sticker price, or even the factory invoice price. The true dealer cost is the real price, the actual price, the dealer paid for the new vehicle you want!
Let's start from the beginning - new car dealers most keep well-stocked showrooms and lots, to allow consumers to view and test drive new vehicles. The cost of this inventory is paid for by the dealership. To recuperate this cost, the dealer most sell the new vehicle. To assist dealerships, car manufactures provide what is called the dealer holdback.
The dealer holdback is a percentage of a new vehicle's value that is paid back to the dealer by the manufacturer. This amount is to help the dealership cover various sales expenses such as advertising, commissions, and stocking their show rooms. The longer a new car sits on the lot, the more it costs the dealer, cutting into holdback profits.
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