How to Buy a New Car Below Invoice
By taking advantage of the tools available online, you can purchase a new car below invoice with little haggling necessary. Buying a car for below invoice is easier than you may think, as the combination of manufacturer-to-dealer incentives and the need for dealerships to meet sales goals can put you in a great position to negotiate. The first step to buying cars for cheap is to narrow down your selected vehicles by completing research online. As you begin to narrow down your choices, it is important to get price quotes so you may ensure that these vehicles fit within your budget. After you request your initial price quotes, you can make use of these tips to buy a car for cheap.
Know All about Dealer Invoice and Holdback
After requesting your initial price quotes, complete some research on the invoice price of each of your vehicles of interest. The invoice price is the bottom-line price that the dealer has paid the manufacturer for the vehicle or the net amount the dealership has financed through a floorplan lender to purchase the vehicle for inventory. It is important to understand that this invoice amount is the net cost of the vehicle before any additional deductions from the manufacturer. The dealership's true cost to own the vehicle may actually be lower by way of holdback that is paid from the manufacturer to the dealership to offset expenses related to salaries, facilities maintenance and the like. While the exact amount of holdback on each individual vehicle is difficult to calculate, you will find that the holdback is manufacturer dependent and that it normally varies from 3% to 5% of the invoice price of the vehicle. While it is often to difficult to get a dealership to negotiate into their holdback money, they will routinely do so if it helps close a sale.
Know the Right Time to Purchase a Vehicle
Buying cars for cheap is also easier if you contact a dealership near the end of the month. Let the dealership know that you are requesting multiple quotes for same vehicle, and that you are hoping to get your quote as far below invoice as possible. This will let the dealership know you have done your research, and it will also give them an expectation of what they must do to earn your business by the end of the month. As your price quotes begin to filter in, compare them. Make sure that the price quotes are for comparably equipped vehicles. Once you confirm that the price quotes are for similar vehicles, determine how far below invoice each of your quotes are. You may find that the range from high to low is significant. Remember that you do not need to select any of these quotes, so if your target price is not met, you can use quotes as a point from which to start negotiations, or you may simply choose to wait until market conditions and pricing are more in the buyer's favor. You can use these tips on a monthly basis until you find a quote that meets your needs. With the need for dealerships to sell large volumes of vehicles to earn bonuses, you will eventually find a dealership that will honor your offer.