It can be quite exciting and a bit intimidating to buy a new vehicle. How can you know if you are paying a fair price for a vehicle at the best new car dealers? Here’s some helpful information about invoice jargon that can assist with your decision:
- The dealer’s invoice is the amount billed to the dealership by the vehicle manufacturer for the cars they buy, in addition to added options. Some dealers maintain that this is the authentic amount they paid for the vehicle. This price does not cover charges that differ from dealer to dealer.
- The factory invoiceis the cost to the dealership that includes the original price, with options, destination charges, and manufacturer fees. However, this amount does not indicate any incentives offered to new auto dealers.
- The manufacturer’s suggested retail price or MSRP is easy to understand but is just a recommendation. Dealers have a lot of flexibility in the amount they charge to buyers.
The difference between a fair auto price and a spectacular price is determined by the market. Business deals that fall a bit above market average are thought of as reasonable prices, while less than the average market is seen as a great price. Supply and demand play a large part in auto prices.
One way to challenge auto dealers at their own game is to sell your potential trade-in before shopping for a car. You usually will make more money by doing this yourself. Doing your homework creates an informed buyer, and you will be better able to secure an affordable price.