The true invoice price is the actual price the dealer paid without any of the incentives the manufacturer has granted them to stimulate sales. Incentives are a bonus that allows the dealer to lower the prices even more so they sell more cars. Often, car dealers don’t lower their prices and those incentives end up as profit.
The holdback is an amount that should be deducted from the invoice price by the car dealer, which results in lowering the invoice cost. This amount is not shown on the factory invoice price. You should be aware that holdbacks exist when you negotiate your deal for your new car.
With incentives, holdbacks, etc, it’s possible that a 5% offer over dealer cost would provide the dealer a fair profit, while still remaining lower than the invoice price. Remember to do your homework before arriving to the dealership. You need to be well informed on exactly what is that you are willing to pay and the price you are aiming.
Certainly your life will be a lot easier if you request a totally free new car price quote today! Learn all you need to get a great deal on the new vehicle you want!