Dealer cost is also known as invoice price. It appears on the invoice that the manufacturer sends to the dealer when he gets the car from the factory. This price is higher than what the dealer gives to the manufacturer. There are many types of discounts that are not mentioned on the invoice. These include dealers Holdback, cash incentives, and other discounts may be due to dealer sales for a month.
Sometimes, the invoice may include the destination charge. It is difficult to find the net cost of the dealer, even for those within the automotive companies. True market value determines what the consumers are paying for a vehicle. It calculates the extra charges by the manufacturer and the hidden subsidies of the dealer.
The price on the invoice is the same as that listed in the booklet that is prepared by the vehicle manufacturer and is given to dealers, which is called the dealer order guide. An individual dealer may add additional fees like advertising fees.
When you compare the invoice price, make sure that the vehicle style is the same; for example, the Ford Fusion Sport FWD’s price is different from that of the Ford Fusion Sport AWD.
When you are finding a low price for a new car, the dealer invoice price is an enticing agent. In theory, the invoice price is the wholesale cost of the car. Dealers sell cars below the wholesale price almost daily, no one pays the invoice price.
New cars are in great demand but as the number of buyers starts to fall, the dealers and automakers start offering discounts to keep selling the cars against the new competition that is arriving. This is when the price falls below the invoice price.
In well-equipped cars, the differences can be added up to a few thousand dollars between MSRP and dealer invoice price. The big question is that if buyers are paying less than the invoice, how can the dealers afford to sell the cars?
The dealer will not sell the car if he or she is not making a profit, it does not matter if the price mentioned is below the invoice. It does not matter what a dealer is offering you in the form of discounts, accessories, services, etc., check with different dealers and see which one is trying to sell you a car for less than others.
Once you have found a dealer, then you know that the price you will get will be below the invoice price:
- Dealer price is filled with many hidden profits that are not passed on to the customer
- Do not buy at invoice price as it has 2 to 3 percent holdback, which is meant for fleet customers
- The difference between the invoice price and dealer cost comes up to almost $3000
- Use the car pricing services to pocket the advantage of the price difference