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Understand Dealer Prices to Uncover Real Deals on a New Car

Getting a great deal on a new car is easy if you understand all the different dealer prices. Terminology in the auto industry is similar, in some ways, to the legal profession – so many different phrases designed to confuse and make people dependent upon the ‘professionals’.

The information below will help demystify dealer prices so you can be an informed buyer. Request a free, no-obligation to buy new car price quote and you will receive the latest prices along with available internet incentives, cash rebates and APR financing specials Virginia new car dealerships are offering.

  • Hassle-free, haggle-free new car buying experience
  • Find available $0 down new car offers
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  • Free, no-obligation new car price quotes

When you drive by new car lots you will notice the cars have a white sticker in the window. This sticker displays the Manufacturer’s Suggested Retail Price (MSRP), which is simply the car manufacturers ‘suggestion’ of a retail price. Car dealerships are just like any other retail operation and the maker of their ‘product’ provides them with an estimate of the highest value of the particular item.

If you are an educated and informed new car buyer, you will be more likely to negotiate a better price than the MSRP price. Salespeople ‘play the numbers’ – they know at some point a buyer will show up who doesn’t understand how retail businesses operate. The result generally leaves the buyer overpaying and the salesperson gets more money in their pocket by way of higher commissions.

Learn the Difference Between Dealer Cost, Dealer Invoice Price & Factory Invoice Price to Get a Great Deal on a New Car

In order to know you’re paying a fair price for a new car and getting a deal, you need to be able to navigate through the dealership and salesmen tactics. The information below will help take the mystery out of this for you:

  • The dealer invoice price is the amount billed to the dealership from the automaker and includes any installed options. It’s essentially the dealer’s cost and they won’t normally share this bit of information with you. All new car dealers pay the same customary price for a car and the dealer invoice doesn’t include various fees differing per individual dealership.

  • The factory invoice price is the dealer’s entire cost for a new car. This amount is the cost for a base model, along with optional packages (trims, mats, etc.), manufacturer fees and destination charges. However, you need to know this amount doesn’t factor in sales incentives and bonuses the automaker offers as encouragement to sell more cars.

  • Ultimately, to determine the true dealer cost on the new car you want to buy, you need to know: The factory invoice price also includes what’s referred to in the industry as the “holdback”. The holdback, typically 2%-3% of either the factory invoice price or the MSRP, is returned to the dealership once they sell the car.

  • While the destination charges are a true expense the dealer has to pay, the inflated sales price leaves negotiating room on what you will ultimately pay – they’re just hoping you don’t know about it!

Why Are Prices Different for the Same Car?

Let’s use a Chevy Camaro for illustration purposes. You requested price quotes from 4 different Chevrolet dealers in Virginia and they’re all different. The reason: all new car prices are negotiable. While the dealership would be happier if you believed the sticker price (MSRP) was the actual price, you have now learned it is far from the actual cost of the car.

Dealerships offer ‘deals’ when all they are really doing is playing with the MSRP. In addition to what you learned about the dealer holdback, here are some other tips for getting a ‘genuine’ deal on a new car:

  • Pay attention to when dealerships are slashing prices and advertising sales. This usually means they have inventory to sell and need to make room for next year’s models. Also be aware when they are trying to get bonus money. You’ll see prices lowered, cash back rebates, military discounts and even discounts to recent college graduates.

  • Another key time to save big on a new car is during the month of December and around the first of the year. Dealerships and salespeople are working for even more bonuses and cars on the lot absolutely have to go to accommodate new models. While everyone else is at the mall doing their Christmas shopping, make this the time to go to the dealership. They will be eager to work with you and sell you a car at the price YOU want.

Now that you know everything the car dealerships hoped you wouldn’t learn, get started by requesting a free, no-obligation new car price quotes. Start compiling price quotes, along with available internet incentives, cash back offers and low or zero APR offers from Virginia new car dealerships.

You will have the new car prices and you know the best times to get a great deal – all that’s left is driving your dream car home!


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Car buyers equipped with pre-approved price quotes, dealer rebates and incentives are guaranteed to pay less. Know actual dealer cost, factory invoice price, and MSRP. Pay less than sticker price, deduct bonus cash rebates, secret dealer incentives, and special internet discounts. Informed new car buyers never need to haggle. Request free competing new car price quotes and uncover the savings today!