Stupid question about pricing new vehicles

[DonM]

I never really understood this.

Ive been pricing a few new vehicles on various websites, edmunds, MSauto, ect...

What is the difference between invoice cost and MSRP? MSRP tends to be the higher price. So which is the one you end up paying.

I priced a few cars with options and get two prices, invoice and MSRP. I know what MSRP stands for but im somewhat confused.

Btw, Im looking to get the best deal for which ever car I decide to purchase. Does anyone know of a good site that has good tips on saving money when buying a new car? I dont went to get bent over.

Thanks

 

[Alec]

Invoice is supposedly the wholesale that the dealer buys it for, but they usually get it for much cheaper from the manufacturer.

Pretty much $500 below invoice is a great price for you to pay.

 

[Mike 92 XLT]

Yup, invoice is what the dealer supposedly pays, while MSRP is the price that they would like to sell it to you for. Somewhere in between is (usually) the compromise. Keep in mind though, that the invoice price is a lot of times not what the dealer actually pays for the car. That's because there is a "holdback," or manufacturer's incentive for the dealer. The holdback usually runs around 3%-5%, if I remember right. Some cars, usually American, you can get easily for invoice. Some, like the Mini Cooper or the new GTO, you can't even get for MSRP. It's the old law of supply and demand. Anyway, take a look at this site: www.carbuyingtips.com There's a ton of information there on buying new and used cars.


Mike

 

[dogfriend]

There is a lot of info on edmunds.com. Check out these links:

10 steps for buying a new car

Invoice scams

Confessions of a car salesman

The last article is pretty long, but after reading it you won't have much sympathy for the salesman that wants to separate you from your money.

 

[DonM]

Thanks guys I found alot of good info.

So $500 below invoice is a general range in which the average car buyer pays?

I just hate haggling with the sales person.

Thanks again guys.

 

[Stephen]

It depends on a lot of things, supply, demand, options, colors, holdback, legnth of time on the lot, etc. Saying $500 under invoice is misleading because thats just not true across the board. Its very case specific.

Also untrue is the premise that the dealer has paid a set amount for the car. The dealer doesn't buy the car from the manufacturer, they literally rent it. They pay a monthly fee and insurance to keep the car on the lot. When the car sells the manufacturer takes the "invoice" price less the dealer holdback (to help recoup the cost of holding the car in inventory) and the rest is profit for the dealership. The salesman makes a (small) comission off of only this profit.

Bear in mind that car salesmem are people too. Car sales is a very hard and unpredictable career. If you walk in looking to meet the salesman halfway and find a deal you can both be happy with you'll be much more successful than hammering for every dollar. $500 under invoice may buy you a Taurus, but something foreign or harder to get and you're looking much closer to MSRP.

If you're informed, and you know what the car is worth on the market then haggling should be easy.

 

[X~FACTOR]

When I bought my wife's Rav4 I asked the salesperson for the invoice price of a particular truck that I wanted and offered him $400 on top of it. He hesitated at first (they always do) but later gave in when I wouldn't budge from my offer.

Depending on what car it is you are looking for, you could pay over or under the invoice price. If its a Viper you might have to pay the MSRP.

 

[Alec]

Originally posted by DonM
So $500 below invoice is a general range in which the average car buyer pays?

I'd say the average buyer probably pays something midway between invoice and MSRP.

And again, this discussion doesn't really apply to niche or low production vehicles.

I paid about $500 below invoice for my GTI. In discussions on VWVortex, it seems like I got at least very close to the best deal on that board.