The idea behind checking the new car invoice price is fairly straightforward – every consumer wants to buy for a price that is as close to the dealership’s cost as possible. It seems simple in theory, but the invoice price for cars is just a number that has no real reflection on the price that you are likely to end up paying.
What makes the relationship between invoice price and end buyer price such a complex situation? These 5 surprising facts can help answer that question…
1. The Invoice Price Doesn’t Include Holdbacks
Some manufacturers charge dealerships an extra chunk of money on top of each car purchase – this figure is called the “holdback” and is an added fee that equates to a percentage of the suggested retail price. After the dealership sells the car, the manufacturer will return the holdback. These holdback values can inflate the invoice price by thousands of dollars.
2. Almost Any New Car Invoice Price can be Found Online
If you don’t want to ask for the invoice and risk getting into the haggling war on the wrong foot, you could go ahead and find the new car invoice price online. Edmunds is just one service that lists national invoice prices and other common fees publically.
3. A Near-Invoice Price May be Distracting You from a Rip-Off
Don’t let one of those “$1 off invoice” deals catch you off guard. Although it is preferable to seek out deals near the new car invoice price, the dealership may be using this gimmick to distract you from high fees or a bad trade-in policy.
4. You Can Buy a Vehicle for LESS than the New Car Invoice Price
Dealerships sometimes receive volume discounts and holdback bonuses from the manufacturer, meaning that they’re actually buying for far below the invoice. In certain cases, a dealer may find it more profitable to sell to you at below invoice because they’ll make up the difference in incentives.
5. Real Market Value is a Better Benchmark than the Invoice
Kelly Blue Book and Edmunds both figure car values based on more than just the invoice and MSRP. These and other reputable price comparing websites will tell you the prices that other consumers are snagging, as well as certain incentives and discounts that manufacturers are currently offering to dealers.
Consumers who haggle without knowing these surprising facts about invoices usually pay for their oversights. In the end, knowing the right numbers can help you come out on top even when the new car invoice value isn’t a true representation of the dealer’s lower limit on negotiation.
