Buying a new car is both exciting and a little intimidating. How do you know if you are getting a fair shake from the best new car dealers? Here’s some info about invoice terminology that may help you decide:
- A dealer’s invoice is the amount the vehicle manufacturer bills the dealership for the autos they buy, in addition to any options. Some dealerships claim this is the actual amount they paid for the car. This price does not include fees that vary from dealer to dealer.
- The factory invoice is the total cost to the dealership that includes the base price, with options, manufacturer fees and destination charges. However, this price does not reflect the incentives offered to new car dealerships.
- The manufacturer’s suggested retail price or MSRP is self-explanatory but is only a recommendation. Dealers have a great deal of leeway in the amount they charge buyers.
The market generally determines the variances between a good car price and a great car price. Sales transactions that fall a little above market average are considered good prices, while lower than the average market is recognized as great prices. Supply and demand play a large part in the price for an auto.
One way to beat auto dealerships at their own game is to sell a potential trade-in yourself before car shopping. You will typically make more money this way. Doing your homework allows you to become an informed buyer and better able to secure not only an affordable price, but a really great one, as well.