New Car Rebates and Incentives
Filed under Rebates & Incentives
Let’s take a look at the new car rebate and incentive.
The dealer cost or the dealer invoice is usually fairly close to what the dealer actually paid for the cars on their lot.
However, these invoices don’t always tell the whole story about what the car ultimately cost the dealer.
This is because the auto makers very often offer dealer incentives or discounts to the dealer for purchasing the auto maker’s cars. This is how dealers can sometimes advertise and sell their cars at what they tout as “at or below factory invoice prices”!
This really should fly in the face of your intelligence.
Think about it.
What business in the world could last selling their product at the price that they bought it for! C’mon do some hypothetical math. How long could a grocery store pay the rent on their building, pay their employees a wage, their taxes, the utility bills, and on and on if they pay their supplier $5 for a case of beans and sell that same case of beans for $5????
They CAN’T.
Wait, let me restate that. They CAN’T and they WON’T!
And by the way, neither would you. So, this marketing crap, at or below invoice, or just $50 over factory invoice just shouldn’t fly in your mind.
Yeah, how many cars at just $50 over what you paid for them would have to sell just to pay the monthly payment on your multi-million dollar building that you sell these cars from?
Sure the invoice that the dealer shows you (if you can get them to do so) may be on paper what the dealer paid for the car, but it is probably far from what the car’s net cost to the dealer will actually be.
This should tell you that the money coming to the dealer in the form of factory to dealer rebates and incentives can be quite extensive. This is why the MSRP sticker on the window of the car is just an asking price subject to you rolling up your sleeves and negotiating it.
Just about every car comes to the dealer with some type of dealer incentive on it. And every car comes to the dealer with what automakers refer to as ‘holdback’. Holdback is essentially a refund to the dealer from the manufacturer after the dealer sells the car. Usually around 1 to 3 percent.
Unlike the rebates and incentives that dealer receive from the auto maker that may be passed along to the buyer to entice them to buy, you’ll not see holdback ever offered up as a bargaining chip.
Holdback is indeed an interesting animal here is more on dealer holdback.
By now it should be perfectly clear to you as to the importance of doing some research and getting a pretty good idea of money figures involved in dealer invoice, new car incentives and rebates, factory to dealer rebates, and at least be aware of holdback, before you go out and play the negotiating my dollars shell game.
And with today’s internet and websites available to you, there really is no excuse for you not getting this information under your belt before you head out. And just because you may have this information, it doesn’t mean you’ll be able to get the car deal of the century.
But, without it, I would almost guarantee you’ll pay more than you had to.
