are the title states. what is an invoice price? its not msrp right?

 

Invoice price is what the dealer pays for the car MSRP is what the manufacturer says the car is worth

 

so invoice is less than msrp?

 

yes it is, invoice is like wholesale MSRP is retail

 

i understand - thanks for the replies

 

Anyone know what invoice is on the '05 ?

 

Hi,

You NEED to know the invoice price when negotiating the purchase of any new vehicle. You should know what is a good price before starting to make a "deal" with the salesman. People will say they got their car for 2000 less than sticker, when in reality, this may be 2000 over invoice (hypothetical).

Now, when the EVO was really new, people were paying markups over MSRP, so dealers were making a lot of profit. Now you can get an EVO for Invoice or even less.

Invoice isn't necessarily the "best" price. There can be factory incentives, rebates, or holdbacks that allow a dealer to make money even if they sell it below the "cost". The dealer gets the profit and the salesguy gets commission, but they also make money through financing if they handle it, and they're also counting on the huge markups they make for service and parts. This is why I do as much maintenance on my own, lol.

For example, I just bought a brand new 04 Honda CR-V EX manual for ~$500 below INVOICE. When I got my EVO in July of 2003, I paid 500 below MSRP, so a "good" price will depend on the particular car and the demand, but you still need to know the hard numbers. Also, don't think that the salesguy is being completely honest, you need to do your own due diligence. I "negotiatied" the selling price in about 5 minutes for our CR-V, there is really no need to go through lots of back and forth and having him "talk to his manager" and all that. If you have a fair price in mind, just lay it out and don't play all the games. Unless you can get below invoice, 1% over invoice or so may be a good goal, depending on the car and the market.

I don't know the 05 EVO invoice off hand, but Edmunds.com, NADA.com, and kbb (kelly blue book) have the information.

Take care,

FB

 

not really, they want yu to think that. HOLDBACK is what they actually pay, which is even lower than INVOICE

 

ty - this is what i found on that


Original Link: http://www.edmunds.com/advice/incentives/holdback/index.html?id=lin0517


Dealer Holdback

There's plenty of talk these days about dealer holdback, and we suppose we're to blame for some of the hype over this manufacturer kickback to dealers. We've been reporting holdback data for years. But many consumers don't understand what the dealer holdback is, what it is used for, and what the holdback's role is in the deal-making process. Let's try to clear up some of the confusion.

What is Dealer Holdback?

Dealer holdback is a percentage of the MSRP or invoice of a new vehicle that is paid to the dealer by the manufacturer to assist with the dealership's financing of the vehicle. It is almost always non-negotiable, because it is designed to help the dealer cover some of the extraordinary costs of doing business. Think of it as a forced-savings plan for the dealer. However, by knowing about the holdback, you can use it as a negotiating tool in some cases. First, a little more background.

The total invoice cost of the car is due to the manufacturer, payable by the dealership, when the vehicle is ordered, not when it is sold. Since car dealerships (or any retail operation, for that matter) must have an inventory on hand through which the consumer can browse and ultimately select a vehicle, they must borrow money from the bank to pay for that inventory. The manufacturer pays for financing and maintenance for the first 90 days the vehicle is on the lot, in the form of a quarterly check called a holdback. After the first 90 days, the dealership dips into its own pocket, and into its own profit, to finance the car. Fortunately, most cars don't stay on the lot for three full months.

This amount is "invisible" to the consumer because, unlike the destination charge, it does not appear as an itemized fee on the window sticker and is included in the invoice cost of the car. If the car sells within 90 days of arrival on the dealer's lot, he is guaranteed a profit even if the vehicle is sold to you at cost. Because of the holdback, the dealer can advertise a car at $1 over invoice and still make hundreds of dollars on the sale.

For example, let's say you're interested in a vehicle with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and destination charge. Dealer invoice on this vehicle is $18,000, including optional equipment. The invoice includes a dealer holdback that, in the case of this manufacture's vehicles, amounts to 3 percent of the total MSRP. (The $500 destination charge should not be included when figuring the holdback.) So, on this vehicle, the true dealer cost is actually $17,400, plus destination charges. Even if the dealer sells you the car for invoice, which is unlikely, he would still be making as much as $600 on the deal when his quarterly check arrived. That is profit to the dealer only; the sales staff doesn't see any of it.

So, if you follow Edmunds' advice and offer the dealership a nominal profit (3 percent over invoice in this example) for this vehicle, or $18,540 plus the destination charge, the dealer and the sales staff are making as much as $1,140 and you're still getting a good deal by paying $1,460 less than the MSRP. (Remember that this price doesn't include destination or advertising charges, additional fees, tax, or license plates.)

However, the true "profit" of holdback money depends on how long the car has been on the lot. If our vehicle had been sitting there for 45 days before you bought it, the dealer's holdback profit is only half of what it could have been, or only $300, cutting total profit on the deal to $840. At the 90-day mark, holdback profit has disappeared.

Dealer holdback allows dealers to advertise big sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!" Additionally, the dealer stands to reap further benefits if there is some sort of dealer incentive or customer rebate on the car. Generally, sale prices stipulate that all rebates and incentives go to the dealer. Using the example above, let's see what happens when there is a rebate.

Suppose the car described above has a $1,000 rebate in effect. You need to subtract that $1,000 rebate (remember, the dealer is keeping the rebate) from the dealer invoice of $18,000, which results in a new dealer invoice of just $17,000. Now, you must calculate a fair price, which can be found on our website at http://www.edmunds.com in the form of the True Market Value (TMV). In this example, TMV measures 3 percent of dealer invoice at $17,510, which means that the price you should try to buy the car for is $510 over invoice, plus destination, advertising, taxes*, and fees. The dealer is still making as much as $1,110 and you're paying $2,490 less than the MSRP. Remember, the longer the car has been in the dealer's inventory, the less money the dealer is making.

Almost all dealerships consider holdback money sacred, and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning that you know the holdback amount and what it is during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money when you know that isn't true.

So how can you truly benefit from holdback information? Well, if the dealership doesn't have that pretty green color you're interested in, and they can't find it at another dealership in the area, they have to order it directly from the manufacturer. If that's the case, make sure that they know that you know about the holdback. If a vehicle is special-ordered, holdback money is pure profit, and you will need to factor this into price negotiations.

Domestic manufacturers (Ford and GM) and the Chrysler half of DaimlerChrysler generally offer dealers a holdback equaling 3 percent of the total sticker price, or MSRP, of the car. Import manufacturers (Honda, Nissan, Toyota, etc.) provide varying holdback amounts that are equal to a percentage of total MSRP, base MSRP, total invoice or base invoice.

When calculating a holdback, use the following guidelines.
If a holdback is off the:

Total MSRP, consumers must include the MSRP price of all options before figuring the holdback.
Base MSRP, consumers must figure the holdback before adding desired options.
Total Invoice, consumer must include the invoice price of all options before figuring the holdback.
Base Invoice, consumers must figure the holdback before adding desired options.
Following is a current list of makes and the amount of the 2001 dealer holdback.

Make Holdback
Acura 3% of the Base MSRP
Audi No Holdback
BMW No Holdback
Buick 3% of the Total MSRP
Cadillac 3% of the Total MSRP
Chevrolet 3% of the Total MSRP
Chrysler 3% of the Total MSRP
Daewoo One-price sales. Customer pays MSRP.
Dodge 3% of the Total MSRP
Ford 3% of the Total MSRP
GMC 3% of the Total MSRP
Honda 3% of the Base MSRP (except Prelude, which has a flat-rate holdback)
Hyundai 2% of the Total Invoice
Infiniti 1% of the Base MSRP (holdback) + 2% of the Base Invoice (floorplanning allowance)
Isuzu 3% of the Total MSRP
Jaguar No Holdback
Jeep 3% of the Total MSRP
Kia 3% of the Base Invoice
Land Rover No Holdback
Lexus 2% of the Base MSRP
Lincoln 2% of the Total MSRP + additional 2.5% rebate of Total Invoice to Certified Dealers for 2001 models
Mazda 2% of the Base MSRP
Mercedes-Benz 3% of the Total MSRP
Mercury 3% of the Total MSRP
Mitsubishi 2% of the Base MSRP
Nissan 2% + 1% of the Total Invoice (holdback + floorplanning allowance)
Oldsmobile 3% of the Total MSRP
Plymouth 3% of the Total MSRP
Pontiac 3% of the Total MSRP
Porsche No Holdback
Saab 2.2% of the Base MSRP
Saturn 3% of the Total MSRP. But with one-price sales, this is a moot point. The customer pays MSRP.
Subaru 3% of the Total MSRP (Amount may differ in Northeastern U.S.)
Suzuki 3% of the Base MSRP (holdback) + an additional 1% (floorplanning allowance)
Toyota 2% of the Base MSRP (Amount may differ in Southern U.S.)
Volkswagen 2% of the Base MSRP
Volvo 1% of the Base MSRP

* Incentives and rebates are actually deducted from the transaction price after Uncle Sam has collected taxes. We have taken editorial license with the process in this example for the sake of keeping it simple.

**********************************

I would also like to add in that many dealers use this money to cover other expenses at their dealership so that even if the car is sold the day it comes off the truck they still have plans for this money elsewhere. I really feel that if you are getting a price anwhere below $500 over invoice, you should not expect to get this money too.

 

This is very true. A "holdback" is about 2-3% of the ivoice price that the dealer gets back from the manufacturer. Some models that sell slow (probably not the Evo) the dealer may even get a "dealer rebate" (not the same as what the consumer gets) so they could end up payng much less than invoice from the manufacturer. Thats how the Chevy dealers are able to dicount Tahoes $6000 -$ 8000 MSRP in those adds in the Sunday paper.

 

True, they also have in fine print on the bottom:

"these reabtes include owner loyalty and college grad"

which many people do not qualify, just a scam to get people in b/c everyone else does it.