• Understanding Car Invoice Pricing & How to Buy

    Whilecar invoice pricing information can be difficult to get from a dealership, it is easy to find invoice pricing information for new vehicles. Though new car dealerships may briefly show you an invoice to confirm a price or explain “how little money” they are making, few buyers have an opportunity to examine an invoice to understand the information on it. Invoice pricing is applicable only to new car purchases. While an used car may have an invoice in the glove box or available for your review, invoices provide nothing more than original pricing information and option codes for used car buyers. At its simplest, a new car invoice itemizes the amount paid by a dealership for a new vehicle. The invoice will also include the suggested retail price so that a sales manager can make quick pricing decisions and see where they stand in negotiations relative to the retail and invoice prices.

    Holdback

    More prevalent are monies paid from the manufacturer to the dealership to lower dealer cost on each vehicle. Most manufacturers pay holdback to a dealership. This amount may or may not be listed on the new car invoice. Holdback is paid to a dealership to help offset normal costs of doing business, like salaries, facilities maintenance, and sales commissions. While most dealerships will not negotiate through their holdback money to make a sale, this money does allow the dealership to sell at invoice and remain profitable in the long term.

    If a model is in high supply and low demand, the manufacturer may also introduce a dealer cash benefit on the model. This amount is paid directly to the dealership when the vehicle is sold, and is another secret of invoice pricing. Dealer cash need not be passed on to the end customer unless it is needed to put a sale together. In fact, manufacturers recommend that dealerships keep as much dealer cash as possible, because dealer cash held by the dealership is easy profit. While dealer cash amounts are normally small, averaging $500 per vehicle on 2009 Pontiacs, manufacturers like Mercedes-Benz can introduce up to $30,000 of dealer cash when a model is discontinued or redesigned.>

    Holdback and dealer cash are the two biggest secrets behind auto invoice pricing, and knowing about them can help you negotiate a great deal that could even be below invoice.

    Finding car invoice prices and purchasing a car for the invoice price can be easy, as long as your are flexible on your preferred equipment and you complete some research before visiting the dealership. When you are shopping for auto invoices and looking to get the best deal possible, be sure to make use of a website like Autos.com. This website can put you in touch with local dealerships who offer quick price quotes and a low-hassle buying experience. This guide will help you in your search for invoice car buying.

    Learn the Invoice Price

    The first step is to use a website like Autos.com to research invoice pricing information. Invoice price is roughly equivalent to the dealership’s cost for a vehicle. However, thanks to amounts like holdback, intended to help a dealership pay for normal costs of doing business, a dealer can sell a vehicle for invoice and remain profitable on the sale. Keep this invoice pricing information on record so you may have it at hand when you start negotiating.

    Contact Dealerships

    Contact a dealership’s Internet department via a service like Autos.com. Be sure to let the dealership know you are ready to purchase a vehicle today for the right price. You may choose to let the dealership provide the first offer, or you may elect to make your offer of the invoice price in your first email contact. If you have difficulty contacting the Internet department, you may also contact the fleet manager. Either of these staff members are likely to sell vehicles for invoice.

    Compare Quotes to Invoice

    As quotes begin to arrive, compare the offers relative to the invoice pricing. If a dealership goes below invoice, it is probably an attractive offer to consider. Remember that these quotes do not include sales tax, so comparing the offered selling price with the invoice information available online allows a direct comparison.