How much over dealer invoice do dealers usually sell new cars?

Question

My husband is being offered 2-3% over dealer invoice through his job. Is that a good deal?

Answer 1

Dealer Invoice is the sticker price the factory makes the dealer pay up front for their car. Most domestic manufactureres and some foreign have what is called 'holdback'. This is usually 3-4% of the invoice. Then the dealer sells the car, the factory cuts them a check for that amount. Then there are rebates and factory incentives that may make this less than an attractive deal for your husband.

Example: a new car has a dealer invoice of $20,000
3% over invoice would be $20, 600. sounds fair and reasonable. BUT 4% holdback is $800 (more profit for dealer) and lets say the vehicle had $1000 in factory incentives - all of a sudden the dealer has made $2400 profit on the deal. (Which, btw, is a 12% profit margin - if a grocery store had the same margin of profit we would get bananas for 12 cents a pound and milk would be about $1 a gallon).

A better way to negotiate would be to uncover what the dealer's actual vehicle cost would be, and offer 5% over that. In that case in my example the vehicle could be purchased for $19,110, and the dealer would still make $910.

There are sites that keep very current on what dealers are paying for new cars these days. Do your research, and you will get the best deal.

good luck

Answer 2

The answer to your question is "It Depends!"
If you are buying a widely available car, that any dealer has plenty on the lot, you may try to get it at the invoice before any rebates or incentives. So, for example you want to buy a car that has a dealer invoice of $19,400 and there is also a $500 rebate from manufacturer. You should try to get it for 19,400 and then also have them apply the rebate to that, making your price 18,900.
The only way to find out is first of all find the car you like, tet drive it and then walk away regardless of what the salesperson says. You go home and log onto www.kbb.com and "build" the exact car you drove, so the Sticker Price you saw on the car matches MSRP. Look at the dealer's invoice and note that number. After that go back and make an offer. See what they say. The salesman will probably say it's impossible and will make a counter offer. Walk away, and see if they are stopping you. As long as they are willing to stop you, you have the room for negotiation. Whatever offer you have from them, you can use as leverage and try to have another dealer to beat it. If you see that no one is willing to give you the price that your husband's employer is offering, then use that employer's deal if you can beat it elsewhere, take the best one.

Good luck.

Answer 3

This is a good question. The thing to find out is what was the actual dealer cost, rather than the invoice price. Dealers imply that what the invoice says is what they paid which isn't always the case.

Answer 4

The best way to go about would be get the Kelly's Blue Book and check on the vehicle with all the add on's see what the cost comes upto.
The dealer don't always pay the sticker price, they get them in bulk so they pay the whole sale price...
I would do as much research as possible about the vehicle & pricing with other area dealer and online before buying it

Answer 5

IT IS TRUE THAT THE INVOICE PRICE IS NOT WHAT THE DEALER PAYS FOR A VEHICLE, BUT YOU ARE GETTING 2 OR 3% AND THAT IS NOT BAD.

CHECK TO SEE IF THE VEHICLE COMES WITH ANY REBATES AND IF SO ASK FOR THEM AS WELL.

ALSO LOOK REAL CLOSE AT THE INTEREST RATE THAT THEY WILL BE CHARGING YOU.

Answer 6

The "bill fee" is a classic negotiating gadget in the vehicle employer. in reality the bill fee is the "official" fee that the production facility costs the broking for a definite vehicle. although, there are additionally multiple incentives that the production facility supplies you to the broking which could make the easily fee the broking finally pays plenty much less. this is to no longer say that the bill fee isn't a stable deal, purely that the bill fee isn't comparable to easily broking value.