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Uncover the Invoice Price of New Cars and What You Need to Know Before You Step Into the Dealership!

February 19, 2014

Shopping for a new car can be a daunting task, but almost every American will have to do it at some point in their life, usually more than once. Lucky for you the landscape has changed drastically for consumers, the internet offers a wealth of information on the new car buying process, so you can be sure that you have all the information before you step into the dealership.

You are also at an advantage when you request free online price quotes and compare them against each other so you can be sure that you're getting the best deal possible.

Dealer Invoice and Dealer Cost- What's The Difference?

Some car shoppers make the mistake of thinking that the dealer invoice price of new cars is the same as the dealer cost of new cars, but they are two very different animals.

The invoice price of new cars refers to what the car dealership technically paid to the manufacturer for the car. We use the word ‘technically' because this price does not reflect the true cost to the dealer. This is because the invoice price has been inflated around 2-3% to provide the dealer with a buffer which they can use to pay for the costs associated with keeping the car on the lot. This inflation is often referred to as the dealer holdback, this is because the money is held back by the manufacturer and returned to the dealer once the car is sold.

This brings us to the dealer cost, which is the actual price a dealer is ‘out of pocket' for a new car. The dealer cost takes into account any holdbacks and incentives the dealership may be receiving from the manufacturer, subtracting these from the invoice price will give you a good estimation of the actual dealer cost.

Before You Step Into The Dealership...

Follow this easy checklist and you'll be on your way to getting the best deal on the new car, truck or SUV that you want.

  1. Know the invoice price of the car(s) you are interested in. This will give you a good starting point for your negotiations.
  2. Research any available consumer rebates and incentives on the models you are interested in.
  3. Look into the dealers. Do a quick online search and glance through the consumer reviews, this will give you a good idea of which dealers treat their consumers the best.
  4. Check your credit history; if it has issues you should work on getting them resolved before you start shopping for your new vehicle.
  5. Secure your own financing; you will generally get better rates from your bank or credit union than you would from the dealership.
  6. Try and time your purchase during the end of the month, year or during the holidays, these are the classic times that dealerships are offering the best deals.
  7. Don't buy on your first visit; you want to avoid the ever dreaded impulse buy.
  8. Make an appointment with the sales manager. This will let them know that you mean business and are not just another flighty consumer.
  9. Request multiple online price quotes and compare them to get the best deal. You can also use the quotes to get dealerships to compete with each other, giving your business to whoever makes you the best offer.

Buying a new car can be a stressful experience, but if you follow the 9 steps above, and understand the dealer invoice price and dealer cost, then you are in a better position to get a great price on a new car. Be prepared before you step into the dealership, request a free no obligation price quote today, it's quick, it's easy and best of all it's completely free and you can get as many quotes as you want. Get started today!

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