Explaining "Dealer Invoice" pricing

The SVG Auto Group knows that buying a car (whether it’s new or used) can be intimidating. That’s why we’re dedicated to educating you on industry terms so you feel comfortable during the whole buying process. The term that we’ll explain today is “dealer invoice”.

Explaining “dealer invoice”

Most people assume that dealer invoice is the price a dealership pays for a car when they buy it from the manufacturer (Chrysler, GM, etc.) In actuality, this price isn’t exactly accurate. One thing to keep in mind is that the dealer invoice price is an entirely different number than the MSRP (Manufacturers Suggested Retail Price). The dealer invoice does not include any of the costs that the dealership incurs once the car is on their lot (such as mark-up, registration, tax, title, licensing, destination charge, detailing, and more).

What dealer invoice includes

Usually, the price of dealer invoice is different than what the dealership actually paid for the vehicle. Some times, the dealer invoice is higher than the actual cost the dealer paid – the manufacturers often offer manufacturer-to-dealer rebates (called hold-backs) that aren’t available to buyers. These dealer-only rebates incentivize the dealer to move inventory on certain vehicles that may not be moving as quickly as other makes and models. Keep in mind though that these hold-back incentives are usually paid to the dealer on a quarterly basis, so until they’re distributed, the dealer invoice price is fairly accurate. Also, like other goods and services that you pay for, prices fluctuate by supply and demand. If a dealer offers you “dealer invoice” pricing, it could truly mean the dealer is taking a loss on the vehicle (regardless of any hold-back incentives that may be coming) due to the other expenses the dealership has incurred to sell the vehicle (tax, registration, marketing, detailing, etc.)

Dealer Invoice pricing may not be your best deal

While it may seem that being able to buy a vehicle for the dealer invoice price would be a good deal for you, sometimes it’s in your best interest to explore all dealership and manufacturer rebates and incentives. Because we are dedicated to complete transparency, we advertise all of our current dealer incentives right on the main page of our website. Also, we have a page dedicated to showing allcurrent manufacturer rebates and incentives available. Keep in mind, you may not qualify for all of the rebates. However, by combining the dealer and manufacturer incentives you do qualify for, you may end up being able to purchase a vehicle for below the dealer invoice cost!


Things to keep in mind about dealer invoice

As mentioned earlier in this blog, the dealer invoice price is subject to many variables such as supply and demand. If a vehicle is in high demand, most dealers won’t part with it for anything near dealer invoice. On the other hand, if a vehicle hasn’t been selling well, you may be able to use the dealer invoice price as a good baseline for negotiating a deal. Regardless of what the dealer invoice is, the SVG Auto Group is dedicated to providing you with the best deal in a 50 mile radius, so stop in and let us help you find your nextride for a great price!

Categories: Finance