what does dealer price mean?

Asked by Apr 14, 2014 at 08:27 PM

Question type: Shopping & Pricing

2 Answers

545

if you mean the invoice dealer price is the price that the manufactorer charges the dealer for a vehicle.in other words how much the dealer paid for the car.that before msrp that this the suggested retail price which is more.thats how they make profit

795

Be careful... there are several answers to this... but in referece to the dealer invioce as mentioned above, you will see several of them tell you that they will sell for $1 over cost and show you their invoice... and while it is a real invoice, there are items built into those invoices that you don't see... depending on the manufacturer, there will be hold back, finance allowance and in some cases a marketing number as well... these are designed so that they can sell you the vehicle at their 'cost' but then when the vehicle is reported as sold, they get all of those $$ back... so say you saw an invoice on a CTS Coupe for 52k and they sold you the car for 52k - it appears that they just sold a car where they made no money - and they will be quick to point that out to you because 'they want your business' and hoping you'll service your car with them, but the reality is that they made over 3k profit on you because once they report that car as sold, they will get the hold back (which is about 6% on that car) and then finance allowances, etc... So, a bit of a run on answer, but what I'm getting at is they can actually sell you a car under their invoice and still make money... mention hold back to the sales guy and he'll probably look like a deer in the headlights! So if they really want your business, you can buy below invoice... but it also does depend on the car because 6% on a 50k car is 3k so with the other items, they can negotiate... if you're looking at a 20k car, you're only talking 1200 and they will be less likely to go into the hold back... Good luck!

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