Dealer Invoice Price

Car Invoice Price

When you begin to look for a new car and visit the dealership lots to browse you may not fully understand some of the “car business” terminology. All new cars have a car invoice price. This price reflects what the car manufacturer charges the dealership for the vehicle. Every new car has a car invoice price attached to the window which cannot be removed by anyone but the purchaser. This invoice also informs the buyer what features are on the vehicle, gas mileage, etc.

Understanding all of the terminology that you will hear when you are looking for a vehicle and eventually start the negotiating process is important. It is likely that most consumers just let words they don’t understand go in one ear and out the other. That is not a good idea. You may find yourself buying or agreeing to something you wouldn’t normally if you knew the exact definition of the term.

So let’s learn some of the terminology used in the car business. The term “base price” refers to the cost of the vehicle before any added options. “MSRP” (which stands for manufacturer’s suggested retail price) is the sticker that is listed on the invoice attached to the car’s window. The MSRP price can be negotiated with the dealership; it is not a set figure. A “dealers sticker price” is also on the vehicles window and displays the suggested retail price along with any dealer installed options, mark-ups, preparation costs, undercoating (if applicable) and any additional dealer profits.

One cost that is not up for any negotiating is the “dealer holdback payments”. This is defined as monetary credits to the vehicles purchase price. The credit is paid by the vehicle manufacturer to the dealership when a vehicle is sold. Dealerships “incentives” are offers that are made to buyers to give them a push to purchase. Dealers may offer zero percent auto loan car financing, longer loan terms, no down payment, or carry over allowances. Each purchaser should check into all of these incentives to find out which one will save them the most money. If a consumer is not set on buying a new car, a carry over should be considered. Dealerships offer a large discount on last year makes and models to move them off the lot. This is a great opportunity to save a large amount of money.

Each dealership encounter costs for maintaining, insuring, advertising and selling cars. The total of all these costs are added and divided into the total amount of cars sold the previous year. This lets a dealership know the overhead of each car. Extra charges are added to each cars price to cover these costs. There is no way to escape or negotiate these charges. Dealerships have to cover costs to remain in business.

The jargon that is used in the auto industry can be confusing. It is a rather simple language to learn and understand. By doing so, your eyes are wide open to any loop holes that may be thrown into a deal. Being an informed buyer is likely to save you extra money on your purchase. Ask a dealer questions using the auto jargon. This will definitely let the dealer know you’re a smart and informed shopper.