War, as Napoleon said, is 90 percent information - and that's no less true in the battle of negotiation! If you're gearing up to buy a new car, you want to get the best possible deal. Rather than feeling around in the dark and (as most people do) trying to knock a little off the MSRP, find the invoice price and use this knowledge to your full advantage.
What's Included in the Dealer Invoice Price?
Are you excited to get the best possible deal on your new car? Nearly everyone knows that the manufacturer's suggested retail price - the sticker price your dealership would love to get for a vehicle - is more of a guideline than a hard price. You can always negotiate down from there.
However, to start your negotiating process from a place of power, you'll want to find out what the dealer invoice price is. Also known as the dealer cost, the dealer invoice price is the base rate your dealership pays for the car you hope to buy.
Set by manufacturers, the dealer invoice price includes the costs involved in manufacturing the vehicle, freight charges incurred to transport it to the dealership, and even advertising costs that manufacturers pass on to dealers.
Seems simple enough, right? Like every other business, car dealerships pay wholesale prices and sell at retail prices. The story doesn't end there, though. Because of the way the automotive industry is structured, dealers often actually pay rates far below invoice pricing when it's all said and done.
Common manufacturer incentives that can take a sizable chunk out of the invoice price include:
- Dealer holdback. The dealer holdback is a set percentage of the car's MSRP (sticker price) returned to the dealer after a sale to help them cover their operating costs. It's usually two to three percent of the manufacturer's suggested retail price, at which the manufacturer advises the dealer to sell their vehicle.
- Dealer incentives. Factory-to-dealer incentives, discounts or rebates to nudge dealerships to sell particular models at higher volumes, can further reduce the dealer's cost.
- Manufacturer incentives and rebates. Car manufacturers offer low-interest financing, cash rebates, and special leases stimulate sales. They reduce the net price of a vehicle and give dealers more leeway when negotiating with buyers.
When you take all these incentives into account, it becomes clear that even the dealer's invoice price (already significantly lower than a car's sticker price) doesn't represent the amount dealers end up paying for a vehicle.
Understanding how the automotive field is structured sets you up to create a win-win situation during negotiations. Your dealership can walk away with a profit while you save handsomely - and finding a car's invoice price makes it all possible.
Can You Buy a Vehicle Below the Invoice Price?
It's a question worth asking, especially if you're a deal chaser. Once you know that dealer incentives and other discounts can bring the dealer invoice price down by an average of two to three percent, and sometimes even more, you're probably keen on getting a slice of that pie.
The bottom line? It's sometimes possible for dealers to sell a vehicle below invoice price and still make a profit, but don't bet on that happening. Buying a vehicle below the invoice price is possible in exceptional situations, where the model isn't selling well, or your dealership is trying to make space for new models.
If you manage to get a great deal like this, it's usually because the car has an odd color, has had a barrage of poor reviews, or has features modern buyers don't particularly tend to go for. Popular vehicles almost always sell for more than the invoice price, but you can still negotiate yourself a deal that's far below the MSRP.
Easily Find the Dealer Invoice Price
Dealer invoice prices aren't publicly advertised, so getting your hands on this magic number can be a challenge. You can make inroads by researching online with sites like Consumer Reports. This, however, can be incredibly time-consuming.
There's an easier way. Invoice Pricing takes the hassle out of your car-buying experience. We offer an invaluable set of tools and resources to help you get a great deal on your new car. Armed with the invoice price of the car you're hoping to drive away in, you can negotiate your way up from there for a fantastic deal.
Here's how.
First, use our Monthly Auto Loan Payment Calculator to start exploring which vehicles best fit your price range. Just enter the loan amount, interest rate, and the desired length of your loan term. You'll get a better picture of your monthly payments in no time.
Once you narrow your choices down to a few models, your next step is to fill out our invoice pricing application. Select the make, model, and trim of your desired vehicle and enter your ZIP code. Give us a way to contact you, apply, and we'll get back to you with the invoice price for your dream car.
Finding the invoice price is easier than ever before - you won't have to do any research, and you won't have to make do with imprecise estimates. Best of all, our invoice pricing service is 100 percent free.
Contact Us Today
Armed with the invoice price - that one all-important number your dealership would prefer you not to know - your negotiating process becomes a pleasure. Getting the best deal on a new car has never been easier! Invoice Pricing has your back. Knowledge is power, and your mission to get a wonderful deal starts here. Contact us today to apply for invoice pricing, and enjoy your new ride knowing that you didn't pay a dollar more than you had to!
