• New Car Dealer Costs: Which Dealers Offer Lower Prices?

    One of the most frustrating aspects of shopping for a vehicle is the search for a new car dealer cost offering the lowest price on a particular model. Now that it is possible to determine the dealer invoice cost, (visit www.kbb.com or www.edmunds.com), negotiating the lowest possible transaction price may take less time, but these discussions can still be just as confusing as ever. The following points may help to reduce this:

    • Although the dealer invoice cost is the same at each dealer, this does not necessarily represent the actual vehicle cost to the dealer. Each month, many manufacturers create dealer incentive programs, providing rebates only to the dealer on certain models to help clear inventory. And because the programs can change on a monthly basis, a particular dealer may be able to sell below invoice cost in February, but not in March. 
    • A dealer can usually offset a lower new-car price quote by reducing the amount that they offer on the trade-in vehicle – thus, a lower trade-in value increases the overall transaction price. Although the estimated trade-in value can be easily obtained by visiting the websites listed above, the actual trade-in value is usually determined subjectively.  

    In theory, each dealer has the ability to offer or match the lowest price on a car in a given market. However, the inventory level and the overall profitability will vary at each dealer, and these factors will greatly affect their lowest price quote. Unfortunately, such information isn’t readily available to the shopper; nor are dealer incentive programs usually advertised.  However, the assertiveness of the shopper can also greatly affect the final transaction price, so it is best to research the market, and set your target transaction price prior to beginning any negotiations with the dealer.