Everything You Need To Know About The Dealer Price For Cars

It’s happened to the best of us: We’re floating on air because we thought we got a smokin’ deal on something, only to run into a friend or coworker and find out they bought the same thing for a lot less cash. It’s one thing if it’s a set of china or some new clubs, but overpaying on a new car can amount to thousands of dollars.

When you receive your free, no obligation to buy new car price quotes from multiple competing dealerships and are ready to start negotiating, you can be sure it’s for a real deal

Factors That Contribute To The True Dealer Cost

A dealership’s invoice is what a manufacturer would theoretically charge a dealer for a new car or truck; however, what isn’t shown are the many rebates, incentives, discounts or the dealer’s holdback. A dealer’s true cost takes into account all of the factors so you have a much closer estimate of what a dealer paid for the car or truck you want to buy.

Below, we’ll break it down to help you establish the most reasonable figure to start negotiations. With your free new car price quotes you will receive the car or truck’s MSRP, but it’s really only a point of reference to compare to the dealer invoice price you’ll also receive. Calculating a ballpark number for the true dealer’s cost starts with the dealer’s invoice.

  1. The dealer’s invoice price is the amount a manufacturer technically invoices a dealer for a new car or truck. After receiving your price quotes along with the dealer’s invoice price, one of the first things you want to request from the dealerships is a copy of their invoice; reason being you’ll be able to tell how long they’ve had it in stock. The longer it’s been taking up space, the more they’ll want to get it sold.
  1. The big factors that determine the differences between the dealer invoice price and the dealer’s true cost for a vehicle are all of the incentives we mentioned, which the dealer receives from the manufacturer. These include regional incentives that are offered to get regional dealers to compete for sales, cash incentives to quickly sell slower moving models, monthly sales quotas/bonuses, end of month and year cash incentives.
  1. The dealership also has to pay to have a new car or trucked transported from the factory to their lot and every dealer has to pay this fee.
  1. There’s also a fee that many business have to pay and that’s regional marketing; in this case, the manufacturer charges a fee for advertising in the dealer’s region, even for specific marketing that target’s a dealer’s local market. While most businesses just write these fees off, many dealers will try to pass it on to buyers.
  1. The dealer holdback is a specific percentage (usually 2 or 3 percent) of the invoice price or MSRP. The manufacturer inflates the invoice by that percentage and then after a buyer takes delivery kicks it back to the dealer; further increasing profits off the sale.
  1. When you’re looking over the dealer invoice price use the above to give you a good place to start negotiations, i.e., dealer invoice price then subtract the holdback. Then you could even bump it up say $400 during negotiations to make the salespeople think they’re making progress. If you do this with every new car dealership that submits free price quotes, you’ll be in an excellent position to have at least one who’s willing to accept a smaller piece of the pie to close the deal.

Which Dealer Fees Are Negotiable & Which Are Not

Here are a few fees that you most likely encounter during the new car process:

Fees that will not be negotiable:

Fees that are negotiable:

Now that you’re armed with all of the information you need to negotiate for a real smokin’ deal on a new car, all you need to do is request your free, no obligation to buy new car price quot.

A great deal is only a mouse click away!

Request a free true dealer cost price quote today!


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