Do Not Over Pay

Written by: Jimmy Sesto

One of the first things I learned when I was 22 selling cars is if the company is making a little profit then sell the car because we can always get another one. First you should know invoice really is invoice on a car, that is what a dealer pays for that vehicle but here is what dealerships don't want you to know. First, every new car has something called holdback and every car has a different amount but usually on American made cars it is 2% of the sticker and less on Japanese cars. Hold back is designed to pay floorplan on that vehicle for 3 months. So if a dealer pays cash for his vehicles or sells them before 3 months then some to all of that holdback went to profit. However if the car is on the lot longer than 3 months the dealer starts loosing money. Next, most auto makers have different programs for dealers getting money back on selling a set number of cars. Don't think the bigger dealers hit their numbers easier because they are bigger, not true. The number assigned to each dealer is based on what a dealer of that size and in that area should sell. While in a dealership do not try to negotiate these numbers because dealers in most cases will not do it and some will deny they exsist. So how to avoid negotiating is by simply telling your salesperson that you would like to see the invoice on the car and then make an offer of $200.00 over invoice. Don't be silly and ask to see a lot of invoices, wait just after you decided on a vehicle then ask about that vehicle only. Most dealers will be willing to do so but some will not and if they don't go to the next dealer because they will. If you are looking at a really hot new car or a hard to get car then this procedure will not work, in fact you will be at the dealer's mercy because of the supply and demand of the vehicle. Anyway, good luck and if you have any questions please ask.