Buying a new car is a big decision and as such it can also be a daunting one. It can oftentimes seem like you are getting bombarded with information without actually knowing what some of the terms related to cost and pricing actually mean, that’s where we come in.
The following will outline the differences between dealer and factory invoice, dealer cost and MSPR.
Dealer Invoice Cost, True Dealer Cost and MSRP- Know the Difference
Dealer Invoice: This is the amount that the manufacturer invoices the dealership for a vehicle. It is the same for a vehicle no matter what dealership it goes to.
Factory Invoice: This is the dealer invoice price, plus any destination or factory fees; therefore this may differ for the same model across different dealerships.
Dealer Cost: This represents the actual amount that the dealership pays for a vehicle, often confused with the invoice price. The difference is the ‘holdback’, which is worked into the invoice price, it is usually 2-3% of the invoice price or MSRP and is returned to the dealership at a predetermined date.
MSRP: Is the amount that the manufacturer recommends that a vehicle be sold for. The dealership is under no obligation to sell at this price, they can set the price to whatever they want.
Shop around so you can compare offers from multiple dealerships. The best way to do this is by requesting multiple free price quotes from dealerships in your zip code today! When you have offers from multiple dealerships you can leverage them against each other so you drive away with the best deal!