HomeBlogArticlesDirectoryTerms of UseContact Us

Determine Dealer Cost to Get a Real Deal on a New Car in #location_state_full#

March 24, 2012

Many new car buyers think buying a car at the dealer’s invoice price is a great deal. Sometimes the salesperson says they are even taking a ‘loss’ to sell the car below the invoice price. A new car dealership willing to lose money just to sell you a car? Sound too good to be true? Let’s dispel the myth right now.

Request a free, no-obligation to buy new car price quote and determine the fair price to pay for a new car. Time is money and when it comes to shopping for a new car, why waste your time going from one dealership to the next when you can have the information you need sent right to your computer?

  • A hassle-free, haggle-free new car buying experience
  • Find available zero money down offers
  • Available low monthly payments
  • Incredibly low available APR rates
  • Secret & hidden new car specials/limited time offers
  • Totally free, no-obligation price quotes

Understanding the Dealer Invoice Price

The dealer invoice price is the amount claimed to have been paid by the dealership to the manufacturer for a new car. From a bookkeeping standpoint, this is correct, however, the true dealer cost is actually hundreds if not thousands of dollars below what is shown on the dealer invoice.

This is because the manufacturer adds money (called a 'holdback') to the invoice price, which is then returned to the dealer after the car is sold. Those funds are used by the dealer to assist with overhead costs to maintain their inventory. Dealers are also offered various incentives and regional bonuses to sell certain models and to reach sales goals.

There are also volume bonuses, ratings bonuses for high customer satisfaction survey (CSI scores), bonuses for moving last year’s models to make room for the next years car models, and so on. Are you getting the picture now?

Being knowledgeable about these incentives and bonuses will help you negotiate a great deal. When you request a free, no-obligation-to-buy car price quote you’ll discover the true dealer cost and see how many hidden profits are factored into each new car on their lot.

Just know, finding the true dealer cost is not the only way to get the lowest possible price on a new car – making car dealerships compete is the key to leveraging a great price. That’s why it’s important to get multiple quotes from dealerships. You will be able to stay in your comfort zone and conduct initial negotiations over the telephone or via email to leverage price quotes from various dealerships to get the best deal possible.

Understand The Dealer Holdback to Gain Advantage

Knowing about the new car dealer holdback will give you an edge when negotiating for a new car. Let’s take a look at how they work.

  • The dealer holdback is a percentage (usually 2-3%) of either the MSRP or dealer invoice price and is returned to the dealership after the sale – in other words, after you buy that new car, the dealership puts that percentage back into their pocket.

  • This allows them to offer these 'great deals' of selling you a car at, or just below, invoice price – while still making big profits.

So when the salesperson says you’re getting a great deal because they are willing to sell you a new car at a loss, just mention two things: Holdback and X dollars. This will immediately show them you are an educated and informed buyer and demanding a 'real' deal.

While they are under no obligation to share this profit with you, they also know their competitors may very well be willing to share theirs. By knowing the competition, you will increase your chances of negotiating a fantastic deal on a new car.

Don’t Pay for Unnecessary Dealer Fees & Aftermarket Accessories You Don't Want/Need

It would be nice if buying a new car meant you only pay the sales price, along with applicable taxes and fees for titling/licensing/registration. Unfortunately, it is not this simple and there are often extra add-ons and options dealerships will try to sell you after you have selected your car.

Before you sign, you should go over every detail of your sales contract because there are many ways car dealerships try to add extra and unnecessary costs to generate even higher profits.

Here are a few examples of what you could possibly see added to the sales contract by a car dealership:

  • Advertising fees that are the dealer’s cost (and deduction) of doing business
  • Administrative fees that are again part of the price of conducting business (and a deduction)
  • Handling fees
  • Fabric treatments that you could do yourself and for a lot less money
  • Inexpensive dealer options you didn’t request, don’t want, and then are overcharged for them

There is also what's called “Aftermarket Car Products” and they represent a substantial means of generating enormous profits. These aftermarket products include things like: service contracts, extended warranties, credit life & disability insurance and security systems. Dealerships may say “for only X more dollars a month you can take advantage of these additional protections.”

The best thing you can do is pass on those ‘great offers’; drive your new car home and take your time to shop around to see what the cost would be from other venders. You can always change your mind and buy the aftermarket products from the dealership down the line.

There’s nothing wrong with earning a living and just like you, car salespeople need to earn a buck too. However, you certainly shouldn’t be tricked or made to feel guilty just because you don't want to pay for something you didn't want/need.

Now that you’re aware of what to watch out for, take a minute to request a free, no-obligation-to-buy new car price quote. Have the ability to find the true dealer cost for the new car of your dreams.

Evaluate pricing and available rebates, internet incentives from multiple new car dealerships to get the ‘real great deal’ on your new car.

Copyright@2021 TrueDealerCost.com. All Rights reserved.