Cyber Fort

New car dealers buy their vehicles from the manufacturers, paying the new car invoice price, which is essentially the wholesale price on a new car. The dealers then sell their vehicles to the public at higher retail prices, usually close to the sticker price. So car buyers who want a great deal must first learn the new car invoice prices before they start negotiating. It is safe to say that most people will attest to the fact that this number is quite secretive. Only a select few know what the real dealer’s cost is on a new vehicle. We all know that most dealerships quote different prices for the same vehicle but most of us do not know why. The wholesale cost the dealer pays to the manufacturer is the same across the board, meaning that Dealer A pays the same price as Dealer B for the same vehicle. However, there are further costs added to the new car invoice price that the dealer must pay, such as the transportation and delivery fee. No matter where the dealership is located with regards to distance from the manufacturer, each one pays the same amount for delivery. These fees are simply added on at the retail level. An interesting fact is that most dealers will order vehicles from the manufacturer with borrowed funds whereby they are responsible to pay interest on those loans.
Floorplan is the term used in the industry to describe such financing to dealers. If a vehicle sells quickly, there will be less interest to pay, thereby reducing expenses so the dealer makes a bigger profit. What is commonly referred to as holdback is where the dealer gets a rebate from the manufacturer after the vehicle sells. Advertising on a regional or individual basis could also be a factor in increasing the wholesale cost which will affect the consumer at the point of purchase. That being said, it is time to do some calculations and discover one or more ways to end up with a new car but at a discounted price below wholesale. One way to do that is through taking advantage of slow car sales where there is a buildup of inventory on a lot. It certainly is not the ideal situation, for both the dealers and the automobile manufacturing company. If there is an abundance of inventory on a lot, the dealer simply won’t order more vehicles. When this situation occurs, the automakers will offer incentives. Look out for these sales that offer zero percent financing or large rebates. Before making a move, do the calculations to figure out exactly how much you will be saving. It is important to explain that consumers must be reasonable when expecting to purchase below the invoice price. If there is no help coming from the manufacturer, it just isn’t possible because this really is a combined effort. Consumers who miss out on a temporary incentive should know that these programs are often followed by new programs that might be even better.