Learn Why The Price Invoice Shows Isn’t The Price To Pay For A New Car in Virginia

What so many new car buyers don’t know is that the dealer invoice price is a lot higher than the new car dealers actual cost of buying a new car. There are hidden ways that car dealers generate profits, creating a wide gap between the price invoice and the true dealer cost.

When you request a free, no obligation to buy new car price quote you will learn the true dealer cost – and that isn’t the price invoice the dealer paid.

Now, let’s take a look at the various terms you’ll hear when looking for a new car and what they mean to you.

How Dealer Holdbacks Affect A Car Dealer’s Cost For A New Car

Obviously, new car dealerships must have cars in stock for you and other new car buyers to choose from, in order to generate a sale. Automakers don’t just give those cars to the dealership; the new car dealer has to pay the manufacturer upfront for each new car on the showroom floor. The amount the dealership pays is the price invoice shown from the automaker to the dealership; the supposed invoice price.

But is everything really this clear-cut? Sadly no; most automakers inflate the price invoice shown by anywhere from two to three percent of the MSRP or factory invoice price. Then the kicker: Down the road, normally quarterly, the manufacturer returns that percentage to the dealership. It’s called a holdback because the automaker held it back only to release it after the car was invoiced.

So why would they go to all of this trouble over money that’s returned to the car dealership? Here’s why:

And that’s not all: They generate even more profit off of you when dealer cash is being offered by the automaker on the new car you’re buying. This is another reason why it’s important that you do your homework first by requesting your new car price quote: to gain access to the new car dealers true cost on the new cars you’re interested in evaluating.

The Difference Between A Good Price & A Great Price For A New Car

Generally speaking the market averages determine the differences between good car prices and exceptional ones. A certain percentage of sales transactions falling slightly above the market average would be considered a good price, with lower than market averages representing a great price for a new car.

A lot of factors weigh into a new car price being ‘great’ such as the supply and demand. The market average essentially represents the higher concentrations of sales prices.

What Is The Car Dealer “Four-Square” Game & How You Can Beat It

In your quest to become informed of the various aspects of buying a new car, along with the terminology used, there is one tactic you may not have run across yet: The Dealer Four Square.

What car salespeople do is take a sheet and literally mark out 4 squares, covering car payments to the value of a trade-in. This allows them to see the overall profit the car dealership will generate, as well as easily see every part of the transaction. Here is exactly what the four parts contain:

All of these sections are related to the other and because of that fact, any changes made to one ‘square’ can be adjusted for in another square. Let’s say for example you need for them to give you more of a trade in allowance – don’t fall over when the salesperson readily agrees; they’ll simply increase another square so they get what they want and you think you negotiated the deal of a lifetime.

So how can you beat them at their own game?

The best way is to not let them make your new car transaction so complicated. Why not sell your car on your own instead of using it as a trade in and/or talk to your bank about financing the new car through them? Both of these examples takes a big part of the Four Square game off the table and simplifies the process.

You’ll get a much better deal when you refuse to play their game and make them play yours.

Another way to beat them at their own game is to do exactly what you’re doing now; your homework. Reading this informative article is critical to becoming an informed buyer; request a free car price quote so you can use another dealerships offer to negotiate an even better deal for the car you want.

Leave the dealership holding nothing but a pair of twos, while you have a full house. Request your free new car price quote and let the games begin.

Request a free true dealer cost price quote today!

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