Invoice pricing?

What is invoice pricing? In a sentence, invoice pricing is a posted amount that the dealership purchases the vehicle from the manufacturer for. As many of you may or may not know, the dealer does receive back incentives from the manufacturer, in the form of holdback. Now most dealers don't mention anything about holdback, and if you mention it to them they look at you with a starry eyed, deer in the headlights, face. In reality dealers will get back approximately 2% of MSRP. Do the math, 2% of $20,000(MSRP), is $400. So theoretically if that dealer sells the vehicle for the invoice price, they will make a $400 profit. Some manufacturers may give back approximately 4%. (Subaru).

The one issue with holdback is that dealers will not see this money for a time period after the sale of the vehicle. It depends on the manufacturer. In general I would say it may take up to 3 months to get this money back. So any money below invoice, won't be seen for as long as 3 months after the vehicle is sold.

In reality, Invoice for most FOREIGN car manufacturers, is approximately $1,000 less than MSRP. Edmunds.com is rather close when giving out the invoice pricing on vehicles. Although in the 4 years I have been working that people bring me Edmunds, there have always been some price discrepencies. Any deal at about invoice is an exceptional deal. Minus the available rebates of course. On some newer more exclusive vehicles, dealers may be more reluctant to discount off of MSRP. It's all a balance between suply and demand.

For any questions, feel free to post!