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Shopping for a new car can be a stressful experience; we aim to make it a little easier. When you request your free new car price quote you will get the best competing car price quotes from dealerships in your area, sent straight to your email. Sit back and let dealerships compete for your business so you drive away a winner.
Car Dealer Cost vs. Dealer Invoice Price
When you are shopping for a new car it is important that you know the meaning of a couple of key terms. Two of these terms are the dealer cost and dealer invoice price, both of these help explain the actual new car cost to the dealership, and give you an idea of what you should aim to pay.
The dealer invoice price is the amount that the factory charges the dealership for the vehicle. The dealer invoice price can also be described as the wholesale price.
The dealer cost is what the vehicle actually costs the dealership once you take into account the dealer holdback and any existing factory to dealer incentives. The dealer holdback is 2-3% of the invoice price or the Manufacturer’s Suggested Retail Price, it is returned to the dealer once the vehicle is sold and serves to help with the costs associated with keeping the vehicle on the lot or showroom floor. Because of the existence of the factory to dealer incentives as well as the dealer holdback, the actual cost of the vehicle can be much lower than the invoice price; this is described as the dealer cost.
How to Find the Price You Should Pay For a New Car
When you know how much the new car cost of a vehicle actually hits the dealer’s wallet then you will be in a much better position to negotiate a great deal on a new car, one that is as close to the dealer cost as possible. You should always negotiate up from the dealer cost, instead of down from the MSRP.
The New Car Dealer Cost = The Dealer Invoice Price + Any Factory Installed Options + Destination Charges – The Holdback and Any Factory to Dealer Rebates/Incentives
When you use the above formula to calculate the dealer cost, you will know the price you should aim to pay during your negotiations. Knowing the dealer cost will also let the dealership know that you mean business and they will be more inclined to negotiate.
Why A Car Dealer Would Sell A Vehicle Below The Invoice Price?
As you have seen in the paragraphs above, it is very possible for a car dealer to still make a profit when selling the car at or below to the new car invoice price. This is because the factory to dealer incentives and the holdback reduce the invoice price, giving the dealer some wiggle room when it comes to setting prices which can still cover their dealer costs.
There are some times during the year where you will have a better chance of getting a deal at or close to the new car dealer price, namely when the new models hit the lot. During this time the dealership will be eager to get rid of the previous model years so that they can make room for the new ones. You also stand to get a good deal during the end of the year when car dealers are in a rush to sell models and meet their yearly quotes; this is also the case during the end of week and end of month, although the end of the year is best.
You also have a better chance of getting a deal close to the new car cost when you set your eye on unpopular models, or vehicles in particularly unpopular colors as the dealership will be eager to get rid of them.
Request your free new car quote today and find the available cars you want in your zip code. Use your competing car quotes to make dealerships compete to give you the best deal on a new car in . It’s fast, it’s easy and best of all it’s 100% free!
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