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Facts and Figures on the True Dealer Cost

November 02, 2011

We assume that you already know what the true dealer cost is and why this is the single most important factor that you need to consider when buying a brand new car, truck or SUV. If you happen to be thinking about buying a new car in the very near future then you better familiarize yourself with the facts and figures that comprise the true dealer cost so you can save anywhere from a few hundreds to a couple of thousands on a new car without even trying.

That's right. You need not be an expert in automotive sales in order to truly understand the true dealer cost. Here are the words and terminologies that you will encounter when figuring out the TDC:

1. Dealer invoice - the dealer invoice is the amount that the dealer paid for the car. Do not be surprised if the dealer invoice is actually smaller or less than the stated MSRP--it is the wholesale price, after all. the first step in determining the dealer cost is by coming up with the dealer invoice price of the car that you wish to buy.

2. Destination charges - the destination charge has no mark-up and is actually the price that the dealer paid for transporting the car from the factory to the dealership (or to your doorstep.)

3. Vehicle options - want a sunroof to come with that spanking new compact car? How about the six-speaker audio system with a sub woofer? Vehicle options will add a lot to the base price of the car. Make sure that you only specify the types of options that you will really need. Otherwise, be prepared to pay a lot more for your brand new car.

4. Dealer holdback - the dealer holdback is around 2% to 3% of the MSRP and should be deducted from the dealer invoice. This is because the dealer will actually get the holdback from the manufacturer after the car has been successfully sold to the buyer. The presence of the holdback is somewhat a mystery but car dealers say that it is used for selling and advertising expenses.

Find the dealer invoice, vehicle options, destination charges and the dealer holdback on the car of your choice by simply requesting a free price quote. Remember that if you include all the above-mentioned factors in determining the true dealer cost then you are sure to find the best deals and the lowest prices in your area!

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