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Negotiate A Great Deal On A New Car – Get The Straight Skinny On Cars Invoice Prices
It’s really no wonder why so many car buyers think they got a great deal when, in fact, they paid way too much. With all of the automotive mumbo-jumbo some salespeople throw around and conflicting information spewing from the internet, it’s hard to know what’s what. In this article we’re going to give you the straight skinny so when you drive home thinking you got a great deal, you know you will have.
Before you start following up with the competing new car dealers who sent you free price quotes on the vehicles you’re interested in, take a moment to read this article so you make an informed decision when you buy your new car.
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Here are the various prices that will be referred to, which can play a part in you receiving different price quotes for the exact same make/model of car:
- Manufacturer’s Suggested Retail Price (MSRP) is the easy price-point; it’s what the manufacturer suggests as the retail value on an automobile and the dealerships actually can charge whatever they want on a new car.
- The Dealer Invoice Price is the amount the manufacturer invoices a dealership for the cars they purchase; it includes factory installed options/packages. Technically a dealership can claim they paid this amount for the new car you want to purchase; however, the invoice price doesn’t factor in the various fees that will differ between dealerships.
- Now the Factory Invoice Price is supposed to be the entire cost of getting the new car from the factory to the dealership’s showroom floor; however, that’s not completely correct though it’s an important number for you to be aware of and use during negotiations. The factory invoice price includes 4 items:
- The base price of the automobile without options;
- The price of the automobile after the factory installed options are added;
- Transportation/destination charges that dealerships have to pay manufacturers to transport the vehicle to their lots, and;
- The manufacturer fees that include regional advertising, perhaps even specific marketing targeting potential buyers within the dealer’s territory. These types of fees will differ between the dealers and while they really should be considered their cost of doing business, sometimes they will attempt to pass those onto a new car buyer.
Items not reflected on the factory invoice are the factory-to-dealer incentives, bonuses, rebates, discounts, etc. that the manufacturers offer dealerships to generate more sales. When you take into account all of the incentives, as well as the dealer’s holdback, the new automobile you want to buy cost the dealership substantially less than they would care to admit.
Read These 7 Tips Before You Start Negotiating
After you’ve received your free new car price quotes and before you send an email, read the following 7 tips that will help you negotiate the best possible deal on your new automobile:
- When you contact dealerships, don’t mention the consumer incentive/rebate information you received with your price quotes; not until you’ve already negotiated the price. Same thing applies to a trade-in or financing.
- Keep the above in mind if you qualify for first-time buyer incentives, college student, military, credit union members or any other special discounting program offered by a manufacturer. These incentives have nothing to do with the dealership.
- Don’t pay any attention to the price on the window sticker; negotiating room starts at around the invoice price with the dealer holdback being subtracted and it’s much less than MSRP. You can pressure a dealership by making an offer around that price.
- Now that you’ve completed your research and have received your competing price quotes, start emailing the dealerships. Use the lowest price quote you received and let the other dealerships know that you’re ready to buy – if they’ll beat the lower price quote.
- If you really want to play hard ball you could come right out and tell the salesman that you know what they’re making on a sale. This will let them know you’re an informed new car buyer and they need to take you serious.
- When you’re prepared to turn a dealerships offer down, make one final offer;. Essentially letting them know it’s a take it or leave it situation. Tell them that if they find they can offer you a better deal to let you know.
- Once you have negotiated with the dealerships and have a great deal on the table the last thing will be executing the sales contract. The dealer will take the sale price you negotiated and add to it licensing fees, taxes, documentation fees, etc. and come up with the total price. Then your down payment (that will include any manufacturer rebates and/or the value for your trade-in) will be subtracted giving you the final purchase price.
Now that you know the straight skinny and have the information you need to use competing car prices to your advantage, the only thing left to do is request your free no obligation price quotes. Use your new-found knowledge to negotiate the best possible deal on the new car you want to buy.
Just like all of the information in this article was free, so are your price quotes from competing new car dealers, along with all of the available new car rebates and incentives being offered in your area.
It’s never been easier than now to get a great deal on a new car.
Negotiation