Invoice price: What's it really worth?
It's easy to find out what the dealer paid for a car. But that might not be what the dealer paid.
July 22, 2004: 2:01 PM EDT
By Peter Valdes-Dapena, CNN/Money Staff Writer
NEW YORK (CNN/Money) - These days, buyers often go into car dealerships armed with what they think is valuable insider information: a car's "invoice price."
That's the price the manufacturer, supposedly, charged the dealer for the car. Buyers are often advised to use that number as a starting point for price negotiations.
Invoice prices are no big secret. They are available online from several auto-related Web sites. But the information is not as valuable as buyers might think.
In many cases the invoice price is far from the last word on how much a dealer paid for a given car. In fact, your knowledge of the invoice price could work against you.
Picture a dealer saying this to you: "You can see for yourself how close we are to invoice; we couldn't possibly do any better." You're more likely to believe it. After all, you did your own research.
Actually, you might do better. Often, a little better. Sometimes thousands of dollars better.
Invoice price a good deal?Some cars, especially popular models that are in tight supply, sell for close to the manufacturer's suggested retail price (MSRP) -- thousands of dollars above the invoice price -- and sometimes more than that. On one of those cars, any deal that approaches the invoice price would be a great deal.
On many vehicles, though, it is possible to negotiate a transaction price -- the price of the car without factoring in any money from consumer rebates -- that is lower than the invoice price, mainly because the dealership itself actually paid less than the invoice price.
There are different mechanisms through which dealers can end up paying less than the publically available invoice price.
Through something called a "holdback," dealers often get money back from the manufacturer once the car is sold. Holdbacks usually amount to a few percentage points of the invoice price, or a few hundred dollars.
Read the rest of the Article on CNN here:
http://money.cnn.com/2003/11/24/pf/autos/invoice_price/index.htm
It's easy to find out what the dealer paid for a car. But that might not be what the dealer paid.
July 22, 2004: 2:01 PM EDT
By Peter Valdes-Dapena, CNN/Money Staff Writer
NEW YORK (CNN/Money) - These days, buyers often go into car dealerships armed with what they think is valuable insider information: a car's "invoice price."
That's the price the manufacturer, supposedly, charged the dealer for the car. Buyers are often advised to use that number as a starting point for price negotiations.
Invoice prices are no big secret. They are available online from several auto-related Web sites. But the information is not as valuable as buyers might think.
In many cases the invoice price is far from the last word on how much a dealer paid for a given car. In fact, your knowledge of the invoice price could work against you.
Picture a dealer saying this to you: "You can see for yourself how close we are to invoice; we couldn't possibly do any better." You're more likely to believe it. After all, you did your own research.
Actually, you might do better. Often, a little better. Sometimes thousands of dollars better.
Invoice price a good deal?Some cars, especially popular models that are in tight supply, sell for close to the manufacturer's suggested retail price (MSRP) -- thousands of dollars above the invoice price -- and sometimes more than that. On one of those cars, any deal that approaches the invoice price would be a great deal.
On many vehicles, though, it is possible to negotiate a transaction price -- the price of the car without factoring in any money from consumer rebates -- that is lower than the invoice price, mainly because the dealership itself actually paid less than the invoice price.
There are different mechanisms through which dealers can end up paying less than the publically available invoice price.
Through something called a "holdback," dealers often get money back from the manufacturer once the car is sold. Holdbacks usually amount to a few percentage points of the invoice price, or a few hundred dollars.
Read the rest of the Article on CNN here:
http://money.cnn.com/2003/11/24/pf/autos/invoice_price/index.htm
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