To get the lowest price possible on a new car you, should negotiate up from the true dealer cost. Request a FREE Car Quote to get the invoice price, and you will be able to calculate true the dealer costs of vehicles .
Don’t be lead astray by the dealer invoice price; this is not necessarily the price the dealer paid for the vehicle. Dealers get hidden incentives and holdbacks from the manufacturer, which increase their profit margin. These can add up to anywhere from hundreds to thousands of dollars. A dealer can choose whether or not to share these with the customer and this is how they can afford to sell at, or below the invoice price.
A FREE Car Quote is the only way to ensure you are getting a price quote taking into account the following: subtracting any available dealer incentives, rebates and holdbacks .
What is Dealer Invoice Price?
The dealer invoice price (or factory invoice) is the amount a car dealer pays the manufacturer to purchase a new vehicle. This price is standardized across the US for each specific car.
Car dealers borrow money, often from the car company, to help them finance new vehicles for their showrooms and car lots. There is interest on these loans called floorplans and the longer a car remains unsold on a lot, the greater the cost of the floorplan. To offset these costs car manufacturers offer car dealers “holdbacks”. This is usually 2%-3% of the MSRP but may vary depending on the car maker.
In theory, the factory invoice price is what the dealer paid to the manufacturer for a car; it is less than the MSRP. This is the manufacturer’s suggested retail price shown on the sticker and what the car maker feels the car should be sold for. However, almost every car is sold below this price and some are even sold below the factory invoice price.
A dealer can sell below the invoice price because this price does not mirror the true dealer cost. Dealers sometimes get holdbacks and incentives making the cost lower than what is shown on the factory invoice price. Even though the invoice price is not the actual dealer cost, it can still be used for reference because it is the same everywhere. Request a FREE car quote and use our extensive database to get access to the invoice price on any new car.
Factory Invoice vs. True Dealer Cost
The factory invoice includes the base model of the car as well as all optional packages such as trims. It also lists the destination charge from the factory to the dealership, the holdback and other forms of dealer assistance. However, the dealer doesn’t get the holdback until after the car is sold. Do not confuse the invoice with the MSRP listed on the sticker no matter what the salesman says.
The true dealer cost is much less then the invoice price. This is what the dealer actually paid for the car after taking into account the holdback and any hidden factory incentives that are built-in (which they are not required to show you). If they do show you the invoice price you know they are making money and will probably settle for less. To see real invoice prices and dealer costs for new cars Request a FREE, no-obligation car quote today!