<title> What do dealers pay for new automobiles?</title>

What do dealers pay for new automobiles?

If you like to negotiate the price for you new car you need to know what dealers pay for new automobiles.

In case you like to negotiate you need to know that MSRP or Manufacturer’s Suggested Retail Price means nothing. MRSP is a price on the sticker and usually is formed so the prices can not wary so much in the different dealerships across the country. It is just a price which is determined by the manufacturer as the “fair” price for the new car. But what is fair from their point of view is not the same of what is fair from your point of view. So forget this MRSP deal and go for the real issue.

It is very hard to make the auto dealer to show you the real factory invoice. But during the negotiation, depends of your negotiation tactics you can ask him or he can offer you to show this closely guarded document. The invoice is a copy of the actual document with the automaker logo on the top of the document and the dealer’s address for delivery. Don’t confuse the invoice with MSRP or other blank printed documents which can be produced on the any office printer.

The factory invoice can show information for the car (base model), additional equipment (or the optional package), floor mats, body trims, transport costs, holdback, and dealer flooring assistance and so on…

What do dealers pay for new automobiles

What do dealers pay for new automobiles

What do dealers pay for new automobiles


For you the most important info is the holdback sum and dealer flooring assistance sum. All other fees are nonnegotiable and we pay them to the dealer and dealer pays them to the factory. The holdback and dealer flooring assistance will be paid to the dealer by the factory after he sold the car, because the automaker or the factory is calculating this sum so the dealers can make some net profit and pay for their expenses like rent, salary, utilities bills and etc… Dealers just love to double their earnings and charge you twice. They earn from the holdback and dealer flooring assistance and they also earn from the MRSP or any sum which will place above the actual factory invoice. Everything above the actual factory invoice is a profit.

What do dealers pay for new automobiles

Very often when the new cars are not leaving the dealership fast enough the dealers will show you the “factory invoice” and offer $1 over the price in the document. If you believe that this is the real factory invoice than you need to know that in this document there are hidden factory incentives which are going directly to the dealer. If they do that, then they will make the money on the deal and if you are hard negotiator you can go well below their offer.

So before you go to buy your next new car, try to understand how the new car business works. How much you know will determine the price of your new car.

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