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Discover the Truth Behind the Myth: Paying Below the Invoice Price

September 16, 2011

Are you the type of car buyer who always sees dealer advertisements that state "Pay Below the Invoice Price?" Keep in mind that car dealers operate a business and would need to earn a profit in order to continue doing business. If car dealers tell you that you are guaranteed to only pay below the dealer invoice price then you should be more worried.

Why? Because this is just a marketing ploy designed to attract more buyers to the dealership. Here is what you need to know about the invoice price:

1. The dealer invoice price is only known by the car dealer and the manufacturer. What is being presented to you is not the actual dealer invoice price that indicates how much money was actually paid for a specific car. In other words, it is easy to just add a couple of thousand dollars into the dealer invoice price even before it is presented to the buying public.

2. The invoice price contains the dealer holdback. The holdback is about 2% to 3% of the sticker price and is used by the dealer to pay for advertising costs and other expenses at the dealership. This particular amount will be paid back to the dealer after the sale of the car.

More tips coming soon. In the meantime, check out the true dealer cost and dealer invoice on the type of car that you want to buy so you will know the true price.

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