Buying a new car

When the salesperson tells you that they are actually below invoice…is this true or a sale gimmick?

Ask to see the invoice.


Agreed, ask to see the invoice. The salesman would have no reason to deny you.

It is possible that the dealership can actually sell below invoice and still make a profit. The manufacturer can deliver cars to the dealer with numerous discounts that don’t show up on the invoice.

It can be. There may be incentives to dealer only allowing them to sell the car at that price. Also note there is something called a holdback(2-4% of invoice I believe) that the manufacturer pays a dealer after a sale of vehicle.

The holdback is designed to keep transaction costs between the dealer and manufacturer down. The dealer buys the car for invoice less 4%. He pays interest on the balance. Let’s say it is 8% APR. That means that the dealer has 6 months until the holdback is gone. The dealer and manufacturer pay each other off periodically to keep the books up to date. It might be possible to get some of the holdback, but you should look at the build tag to see when it rolled off the assembly line. There are also other incentives that the manufacturer offers, like rebates to both the buyer and dealer. You did not say what the car is, so we can’t tell you what incentives there are. It is possible that if there were a $2000 rebate on the car and you got it for $500 under invoice, that the dealer would take $1500 extra away from the table. I don’t know if that is the deal here, but it is possible.

Those who show you the most figures are probably the most honest. It could go either way with honesty but it really doesn’t matter. If you are paying cash or check without financing, you can get good prices. Don’t let me stop you from using Consumer Reports. If you subscribe, they will sell you the information on invoice prices. It could save you enough to make it worth the money. Salesmen named Louis never lie to you.

It can be true or not. It makes no difference. You want the best deal you can get for you, that means you pay the least amount of money. What difference does an invoice mean? Even if it represented what the dealer paid for the car, what difference would it make?

In invoice is just one document relating to what the dealer’s real cost are. There are often rebates, sales incentives advertising charges etc. to add and subtract from that invoice amount.

Even if the invoice reflected the true cost to the dealer, why would you care? It does not mean you should pay X amount. You want to get the best deal and to do that it is best to bargain and use the same tricks the dealer is going to use. They are going to tell you that if you want that car you have to buy now. You tell them that if they want to sell a car to you they are going to have to make it worth it to you and do better than the dealer down the street or in the next town. Let them know they are competing for your business. After all you can go to another dealer, if you don’t buy from them, they can’t just find someone else to buy, they totally loose your sale.

Thanks for the advice and information! I have heard of these holdbacks before, but was not quite sure how that worked. There are no current incentives being offered for this vehicle, except the financing rates.

I will have to ask to see the invoice and ask about the discounts. Maybe that will help in getting the best deal I can. Thanks everyone!