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