| When you go into a car dealership, you want to know | | | | telling you "I'm losing my shirt off of this deal." In truth, |
| all of the pricing and costs of the car that you are | | | | you are the one that is losing your shirt off of the deal, |
| looking into buying, as mentioned earlier. Being prepared | | | | so don't buy into it. To help you calculate what your |
| will save you tons...period. You should know the | | | | offer should be to the dealership, you should get the |
| manufacturer's cost and the dealer's cost. You need | | | | factory invoice price (don't forget to include the options |
| to calculate the cost that the dealer paid for the car | | | | in this price), and add 5% to that amount. That will give |
| and then make a reasonable offer. The idea is to get | | | | you a good starting point for your offer the dealership. |
| a good deal rather than getting taken to the cleaners. | | | | When I mention the options, I mean the ones that you |
| The only way to do it is preparation and being realistic. | | | | can't avoid. Some cars come equipped with a CD, sun |
| You should also know that the dealer's price is not the | | | | roof etc. and these are fees that you can't avoid |
| invoice price from the factory. You should know that | | | | paying so be sure to account for these when setting |
| the dealer's cost is much lower than the factory's cost. | | | | your total factory invoice price. You should also be |
| Having said that, keep in mind that the dealer is not | | | | sure to account for any buyer rebates as well when |
| going to give away anything, but they might listen to | | | | calculating your dealership offer. So in the end your |
| something that gets them some cash. But always | | | | offer should be calculated like this: DEALER'S COST + |
| work from the dealers cost. In order to make a fair | | | | 5% - ANY BUYER REBATES = YOUR OFFER |
| offer to a dealership, you need to learn to read a | | | | Calculating your offer to a dealership is as simple as |
| factory's invoice. Here is what you can expect to find | | | | that. Don't complicate it anymore and don't let the |
| on the factory invoice. - Base model of the car on it - | | | | dealer complicate it either. When you are considering |
| All of the options packages - Destination charge - | | | | how much you can afford for a car, be sure that you |
| Holdback and dealer flooring help Quick Tip: DO NOT | | | | don't get sucked into paying more than that. If you are |
| confuse the invoice with the MRSP window sticker | | | | unwilling to pay more than your opening offer, let the |
| because they are not the same. Contrary to popular | | | | salesman know that your offer stands firm and how |
| belief, dealers don't have to tell you the invoice on any | | | | they will profit from the offer. In the end you will get |
| car. This often gives the dealer leverage over you. | | | | what you want on your own terms. Below is a good |
| They can offer you one dollar over the invoice. You | | | | example for you to follow, feel free to print this or |
| should know that there are hidden factory incentives in | | | | write down the example and put it in your car buying |
| the invoice price that lowers the cost of the car for | | | | folder. You are hoping to buy a Toyota Camry. You |
| the dealership. You're not getting any deal here. If a | | | | do your research at DealersInvoice.com, and find that |
| dealership is very quick to show you the invoice, you | | | | the invoice price is $19,922; MSRP is $22,385. The |
| should note that they are fully aware that they will be | | | | dealer may offer you the car for $22,000, and shows |
| making good money on that car from you and they | | | | you the invoice. You learned by researching that there |
| can settle at a lower price for the car. Having this | | | | is a $500 factory to dealer incentive; and a $447 |
| knowledge before you walk into a dealership can be | | | | holdback on the MSRP (2%). Based on the above |
| your best negotiating strategy. See, they will tell you | | | | calculations, the dealer's real cost is $19,922 (invoice) - |
| that you can afford to buy the car at MSRP hoping | | | | $500 (incentive) - $447 (holdback) = $18,957. You can |
| that you will not then wonder what the actual worth of | | | | see that this is lower than the factory invoice number. |
| that car is. Knowing this information can let you make | | | | Now, if you add the 5% for your offer to that price, |
| them the same offer and put you in the driver's seat. | | | | the car price will be up to $20,379 due to the addition |
| (OK, brutal pun) If you offer a few dollars over the | | | | of $455 for the destination charge that is always |
| factory invoice (which is the actual worth of the car) | | | | present. Now if you compare the MSRP offer that the |
| then you can open your bid and let them know how | | | | dealership had listed, you will see that based on the |
| much profit they can make off of your offer. Take | | | | example above you just saved yourself $3428. This |
| some time and look through these cars buying web | | | | may seem a little complicated but if your use a |
| sites to get the entire factory invoice pricing of a car. | | | | pre-designed spreadsheet from or AutoUSA.com, the |
| Dealers are always going to try and tell you that they | | | | program does all the calculation for you. A little |
| paid more for the cars than they actually did so that | | | | preparation and a reasonable offer will go a long way |
| they can make a higher profit off of the sale. | | | | to getting the car you want at a great price. |
| Salesmen will often try and make you feel guilty by | | | | |