What is a "dealer invoice price"?
A dealer invoice price is something which is very available on the internet now. It's very easy to access that information for any vehicle. What the dealer invoice price refers to is the transaction price the dealer has paid for that vehicle to have it at his showroom. The dealer invoice price is usually considered to be a great place to aim when you're doing your negotiations on the car. However, if you pay invoice, or $500 off invoice, which is a very common way of cutting a deal, be aware that there are additional holdback fees where the dealer is still going to make his money. To be fair, a dealer does not make a lot of money on the actual sale of the vehicle. Much more of his profit comes from service and after-sales. When you get down to dealer invoice price, it's an excellent price for the vehicle, but be aware that there's still money after that which the dealer may or may not want to part with. As an example, let's say the dealer has a vehicle on the showroom floor for $15,000. The dealer invoice price might be $10,000. That's your gap. He's going to try to keep you up as close to fifteen as possible, and you're going to try to get down as close to ten as possible. Once that vehicle is sold, then the hold back fees, or the incentive money from the manufacturer, come into play. The car dealer always knows that he can get as close down to that $10,000 dealer invoice price, knowing that once it's sold, he'll get additional funding from the manufacturer for selling that vehicle.
