Finding true car pricing invoice can be quite a difficult task for new car buyers. We’re here to help you understand what goes into car pricing and also what additional fees you should avoid when buying your new car or truck.
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Car factory invoice is an intricate term that really refers to several different pricing aspects, all of which a dealership has to consider when purchasing their vehicles. Factory invoice pricing is made up of four components:
- Base Car Invoice: the bottom line price of the vehicle, fresh off the production line. This is the price that is applied to the car or truck when it’s in its base stages, before any extras or options are added.
- Options Car Invoice: once all the gadgets and extra options are added to the vehicle it become more valuable, and so its price tag goes up.
- Manufacturer Fees: these are added fees a dealership is responsible for paying to the manufacturer, often associated with advertising expenses.
- Destination Fees: these are the shipping and handling costs that the dealer has to pay to the manufacturer to get the cars onto their lots.
Dealerships have tricky ways of making a lot of the money they spend on a car back during the sale of the car. In other words, they try to stick you, the buyer, with their bill to the manufacturer. A free price quote will show you the true value of the car so you can avoid paying additional fees. Here are some common add-on fees that you might run into and how you should handle them.
Car Pricing Fees that You Are Responsible for Paying
- Destination fee (shipping and handling).
- Fuel charges (the car is sold to you with a full tank of gas so you are often expected to pay for that tank).
- Sales tax (cars, just like any other product, have sales tax applied to their purchase).
- Registration and title fees.
- Accessories and warranties (optional).
- Any additional dealer installed options or accessories that you agree upon during your negotiations with the salesman.
Car Pricing Fees that You Should Not Pay For
- Floor plan fees (the cost for a dealership to put the vehicle in their showroom).
- Vehicle preparation fees (things such as removing plastic from seats and washing or waxing the vehicle).
- Any type of fee that starts with an acronym. (If you come across this you need to have the dealership explain what the acronym stands for. This is a common tactic to put add-on charges into your bill of sale so beware of them.)
