However, a little detective work and basic math enables you to put together a realistic offer which, while below the invoice price, may well be accepted by the dealership. Working out an Offer from the Dealer Invoice Priceįiguring out what to offer on a new car based on the dealer invoice price involves more guesswork than getting that information from a consumer report in the pre-Internet days.

This, in turn, means you may be able to negotiate a purchase price below the invoice price also, since the sum may still be enough to give the dealership a solid profit on the sale. Additionally, in many instances, this bounty increases in tiers as the dealership passes various thresholds for total monthly sales.ĭealer incentives and holdbacks combine to make the actual cost of a car to the dealership hundreds of dollars lower than the published invoice price. The car company pays the dealership a direct cash bounty for each car sold. The holdback is intended to discount the price to account for the overhead costs of shipping, storing, and advertising the vehicle.Ībove and beyond the holdback, dealerships also receive dealer incentives for making sales. The dealership may agree to pay this amount, but then receives an immediate discount called a “holdback,” which averages 3% of the invoice price (or, for some companies, the MSRP). Consumer reports offered paid access to new car dealer invoice prices, but no more than 1 in 10 buyers ever investigated this amount.įollowing the Internet’s appearance on the scene, the modern dealer invoice price is a nominal price only. It was an accurate picture of the price below which the dealership could not go without destroying itself by selling below cost and losing money on each transaction. Understanding Modern Dealer Invoice Priceīefore the Internet, dealer invoice price represented the actual cost the dealership incurred by acquiring a vehicle to sell. The coming of the Internet and its ability to provide instant information to practically anyone prompted dealerships and car companies to purposefully obscure the true wholesale cost of cars, in order to weaken the bargaining position of consumers like you. In fact, dealer invoice price no longer represents a fully accurate picture of the actual cost of a car to the dealership. This seems like a very slim margin taken at face value, it might discourage you from trying to bargain for serious savings, seeing how little space the dealer seemingly has for negotiation. It is, in effect, the wholesale price of the car, which the dealer then sells at retail price in order to make a profit.Įven brief online research will show you that dealer invoice price is frequently very close to the advertised purchase price of the vehicle – generally around 10%. Once used as the gold standard for savvy new car buyer price offers to dealerships, the dealer invoice price is the amount a dealership pays to the car manufacturer to buy one of their cars to sell in the showroom.

New car dealer invoice price