What Is The Dealer Invoice On The Car I Want?

Dealer Invoice

Photo Credit: wavebreakmedia/Shutterstock
For some reason, I have a lot of people recently asking where they can get the dealer invoice price on a particular vehicle. This is a tough question, Iíve not found any online source that I would trust to be accurate. Moreover, what a business pays for the product they sell is nobodyís business.

Considering my radio show, website, Facebook page etc., I may easily talk to more potential auto buyers than anyone in the country.

For those who do not know, before the Car Pro Radio Show was created in 2001, I was in the retail automobile business for over 3 decades. I have to admit, when I get the question about what dealerships pay for cars, it irritates me a little.

I consider myself a consumer advocate in every way. I do my best to help people make good car buying decisions. When it comes to dealer cost on a car, as I mentioned earlier, I frankly donít think that is anybodyís business. Would you ask a clerk at Walmart what they paid for that 60Ē HD TV you want to purchase? Would you ask a homebuilder how much it cost to build that dream home you want to buy? I donít think so.

The bottom line is that as a consumer, you should be more interested in the best price you can get, without regard to what a dealer paid for a car. Profit is not a dirty word and car dealers have a huge investment in their business, and like everyone else, they deserve a return on that investment.

The next problem for ďdealer-cost chasersĒ is getting accurate information. Iíve seen some big name websites with the wrong numbers, wrong cost of transportation, and wrong incentive information. This is frustrating for the consumer and the dealership both. Dealers donít open every day to NOT sell cars, but when you are armed with bad info, you leave a dealership in the car you drove in there, mad at the dealer, and not understanding why the dealer didnít accept your offer.

Some people choose to go through ďbuying servicesĒ and brokers in those states where it is legal. TrueCar has done a ton of advertising and tout that they ďchanged car buying foreverĒ and theyíll give you ďupfront pricing estimates.Ē Not exactly sure how a pricing estimate is going to help you get the best deal, but consider this; according to car dealers I have spoken with, they pay TrueCar on average $300 for every person who buys a car through the TrueCar website. There is nothing illegal or immoral about it, but donít you think the dealers consider that fee when calculating the lowest price they can sell a car for?

When I am shopping, whether it be a car, an electronic gadget, computer, or lawnmower, I just want to pay a fair price. I consider the value of my time in the calculations too. Can I afford to drive one hour to save $50 on a purchase? I want to be treated well, respected as a consumer, and get a fair deal. I donít mind paying a profit to any business. I just want a fair deal.

The next problem for people wanting dealer cost is; you arenít going to figure it out anyway. You can get close to what factory invoice is on a car, but thatís not the same as dealer cost. Even with my experience, I canít know what incentives are being paid to the dealers direct from the factory. Often times, these are based on a dealerís volume and the amounts change the more a dealer sells. Many of the factory-to-dealer bonuses are based on how well people are treated or its customer satisfaction ratings.

I am in favor of researching the car you want to buy and doing your homework, but obsessing over what a dealer paid for a car will make you crazy. Dealerships have tremendous overhead and trust me, you want them to be there after you purchase a car in case you need them.

Photo Credit: wavebreakmedia/Shutterstock.com
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Guy McDonald
Turns out the price of the vehicle is not the profit generator of choice. By the time extended warranty, undercoating, clearcoating, security devices, window tinting, trailer hitches, etc., etc., are added in, plus the cost of financing!, a really good price on a car surely disappears...
The Car Pro
Yes, if you purchase all those items, there is more profit in those than a car itself, but those things are optional and you do have a choice.

Jerry Reynolds
Louis Allen
I do agree that a car business is there to make a profit. You say you want a fair deal. The problem is that the dealers don't give you a fair deal unless you go toe to toe with them and arm yourself with all the knowledge you can. I always want to get or see the invoice because it gives me a starting point. I know I'll never know what exactly they paid for the car but it they say no to this and yes to that, I know where I stand in the numbers game. Dealers will beat on me for 5 hours and they make a big game and ego carnival out of who got to who and will get every penney our of you they can so YES, Im going to try and get as close as I can to what the dealer actually paid for the car. Ive bought a lot of cars in my life and when I wreck one and the insurance books it out on NADA and writes me a check. That's when I know if I paid to much for the car. If Im upside down in the car, then I paid too much. Customers don't know a good dealer from a bad one. I think the ethical thing to do is be honest with people and the dealers are not always honest. Another issue is that everything we buy retail has a price tag. why is it that cars are negotiable and all else is not. Its because they can get away with squeezing you for dollars. Sorry but I disagree with not trying to get as close as you can to get their bottom dollar. Walk out if you have to and I guarantee you that they will be calling you within a day or two to continue negotiating.
The Car Pro
Louis, we don't disagree on much. THis is the essence of my show.

My issue is that nobody has the right to know what any seller paid for their product. Get the best price and if another seller will beat it, that's life. Not sure why anybody thinks they have the right to a seller's cost.

Yes, cars depreciate, so do boats, motorcycles, bicycles, sometimes houses, etc. Few things are worth more used than new.

Again, my show is ALL ABOUT my listeners getting the best possible deal, UP FRONT, with no hassles. Sadly, too many want to use their Car Pro price as a starting point to start negotiations.

You can't have it both ways.

Jerry Reynolds
Harley .
I could not agree more with you about what does the dealer pay. When I bought my 2018 Ford Escape I told them that I don't expect them to not make a profit. You can not stay in business selling for cost. Would the person who is buying a car tell the car lot what they buy and sell items for if they were in business.
After I told them about making a profit they were much more attentive and willing to negotiate than before I made that statement. I get tired of the people who are always complaining about the price. Cars are more expensive than they were when I was a kid but they have a lot more amenities. If you want a cheaper price cut back on the luxury items included with the vehicle.
The Car Pro
Harley, thanks for your thoughts. I couldn?t agree more. I want EVERY business to turn a profit, it creates jobs, tax revenue, and it generates more money spent in the economy. I appreciate you listening to the show greatly.

Jerry Reynolds, President
Car Pro Radio Network
Bryan G.
I see nothing wrong with wanting to know how dealer pays for vehicle or wanting to see invoice. Although I do see that getting accurate information in this regard is difficult and challenging. And no, you don't go into a Wal-Mart and ask them how much they paid for their merchandise because most of us know that you cannot negotiate a better deal at such places. However car dealers historically are all about "giving you the best deal" and they advertise as such. I do not begrudge them a modest profit jut I don't fall prey to a salesman who tells me (and many do) "Hey, we're really not making any money on this deal." Hogwash! Dealerships are akin to the "house" in Las vegas and the house never loses. Whatever the dealership falls short on one deal, they simply stick it to the next guy by screwing him on his trade.
The Car Pro
Bryan, I appreciate the feedback very much, but much of what you said simply isn?t true. Dealers lose money on new cars every single day. Outside of the luxury brands, almost all dealers lose money in their new car departments. Before you begin to feel sorry for them, they make money in every other department so it works out. It?s a much different world today in the new car business, 10 years ago I might have agreed with you.

Jerry Reynolds, President
Car Pro Radio Network
Bill .
As a long-time, small mom & pop entrepreneur, I really enjoy your stories, and love hearing about your successes. As a multi-year reader of your Car Pro, I hope to use your car buying service in the months ahead. I have had F150-size trucks for 40 years and am going to downsize. I'm intrigued by the new Jeep P/U, but Jeep has such horrible reviews/history. I will also look at Ford, Chevy, and Toyata (I have Tundra, said I would never buy Toyota again). Again, love your stories; excellent - maybe you should write longer items.
Perry .
OK, to all those people out there who want to know Dealer Cost....I'm with Jerry.

Do you tell a stranger off the street how much you earn? I don't think so and most people would be offended being asked this. As Jerry said, do you ask WalMart, Kroger, Home Depot for their cost on every item you buy from them? Doubtful.

These people who are concerned with the cost only, in my view, are not business people. As an industrial Procurement Manager of (too) many years I always let people know the primary factor is to consider not only the cost to get, it's the cost to use. Warranty, dealer support etc. That said, also, we want our suppliers to be in business years from now to support us.

With many companies, the sale of new products has a low gross margin. It's the parts and service departments that support the business. Just as a car dealership.

As an aside, let's talk about "cheap" for a moment. There is a reason you do not see thousands of Nissan Versa's or Chevy Spark's on the road. A perfectly capable and equipped car. Although they are the least expensive cars you can buy is the USA right now, obviously there must be a reason why people will spend more to upgrade.

We have used Jerry's system 3 times for car purchases and have been very pleased. Dealer support has been phenomenal! Ooops, there's that "cost to use" factor again.

Edit this as you wish Jerry/Kevin.

Thanks for all you do guys!
The Car Pro

Thanks for writing and thanks for listening. You bring good points for sure, nice to see a perspective outside of the auto industry. Thanks for using our dealers, that is what keeps the show on the air.

Most people do not understand the cost of opening a car dealership every day. I knew every morning when we swung the gates open before 7 AM, the cost to do business that day was over $100,000. Some days you covered it, others you didn?t. It?s a tremendous amount of pressure.

Always let me know if I can do anything for you!

Jerry Reynolds, President
Car Pro Radio Network
When is the last time you have ever been in a retail store and paid a different price for the exact same item than another customer? You would lose your "procurement" mind if the person in front of you paid $ 1.89 for a loaf of bread and they charged you $ 3.00. Or maybe YOU wouldn't. I would, though.
Amy P.
So you recommend a law that every vehicle in America has to be sold for window sticker price so everyone pays the same? I'm sure the car dealers would back that idea.

Jerry Reynolds, President
Car Pro Radio Network
Jack C.
Mr Reynolds,
I've listened to your radio program for the last year, and have learned quite a bit. Registered and signed up for your news letter a couple of months ago. We are looking to buy a 2019 or 2020 Honda Accord Touring in the near future. We own an 2008 Accord leather car purchased new in 08 with 58,500 miles. Long story, plan to keep the 08 but we never see any incentives or rebate or bigs sales on Hondas. Is this what to expect when it time to make our purchase. Love your show
The Car Pro
Jack, Honda doesn?t play in the incentive arena very much, although there are signs that could be changing, they upped them for the last week of August and Labor Day. Whether it will be that way when you are ready, there is no way to know at this point. Thanks for listening to the show.

Jerry Reynolds, President
Car Pro Radio Network
Dan .
I think any buyer should do due diligence in researching before purchasing a large ticket product such as a vehicle. I was always turned off by dealers offering that $49 over invoice, that they were not going to show you. I found it insulting for them to imply they were only making $49 on a new car purchase. You can?t build and maintain a dealership just making $49 off each sale. I just wanted to be treated fairly and not like a fool. I have found it to be less stressful to do a little research on what you want, know what it?s worth and then find the sales person willing to make it happen. Purchase what you want and not what the sales person wants you to have from his inventory. Internet buying has taken a lot of the stress out of purchasing a vehicle.
The Car Pro

You are 100% right. Good observations on your part. The Internet has been a nice tool for buyers, but it has become the new place for bait & switch also. People find the lowest online price at a bad dealership that falls back on hidden disclaimers and all they have to say is ?it was a mistake?. But the consumer takes that price to a good dealership and is angry when they won?t beat it. Really good dealers battle this every day.

I appreciate you listening to the show very much.

Jerry Reynolds, President
Car Pro Radio Network
David .
Not just that, its how a dealer take care its business. A big dealer , i wont even mention, in Lubbock surrounding west Texas area is a good example how not to do business. I cant even begin to describe how they destroyed their business and give themselves a bad reputation now. It affects local economy and employees that worked hard for them. OWNER - Dealers have a responsibility to their employees , customers , and the auto maker itself to conduct their business legally and morally. When they dont, they deserve the consequences, like what happened in Lubbock. So check out the news , ratings, on dealers before buying. And of course here .
The Car Pro

You are correct sir. The situation in Lubbock is an excellent example of what happens when bad dealers buy up dealerships. It ALWAYS catches up to them. The good news is with the oil business back in W. Texas, GOOD dealers will purchase the failed dealerships and Lubbock will be better served. I look forward to that.

Thanks for listening to the show.

Jerry Reynolds, President
Car Pro Radio Network
Dave H.
Question: When a dealer acquires a car from another dealer to get the right color, or whatever options the customer desires, does the selling dealer have to pay a fee to the other dealer in order to get the car?
The Car Pro
Hi Dave! Here's an article that will hopefully answer your question: https://www.carprousa.com/buying-new-car-dealers-stock

Thanks for writing!
Martin .
Jerry- We have come to trust you so much that whoever you endorse and have accepted into your special group of dealerships, it?s good enough proof for us to make our auto buying choices within these select groups of dealers. Thank you for your incredible service to all of us who love cars and want to stay current on all things you share online and on the radio.
Jerry Reynolds
Martin & Barbara, thank you very much for the kind words. MY goal for 17 years has been to show people there was a better way to buy a car, one without hassles. I believe the dealer deserves to make a profit, but I want my listeners to get the best possible price. It's a delicate balance but it happens every day. Thank you for listening.
Rufus .
Personally, I just take 25% of the List Price and Expect to purchase for very close to that amount plus TT&L. If I can not get 20% or more, I leave.
The Car Pro

Thanks for listening to the show my friend, but you?ve bought your last new vehicle I?m afraid. 20% today is not even close to being possible UNLESS you go to a dealer who has added a lot of equipment to the window sticker, and then quadrupled the cost of the add-ons. I hate you?ll be disappointed the next time you shop, but the discounts you speak of are long gone with rare exception.

Jerry Reynolds, President
Car Pro Radio Network
Ken H.
Thanks Jerry! I was in the car business in the late 80?s and it always irritated me when my GSM would pop out the invoice to a customer and say $500 over. Then the cheap ass who he was talking to had to think about that!! Not to mention the $50 mini that the salesman took home for dealing with this cheap ass invoice chaser.
The Car Pro

Dealers wish for $500 over invoice today! Much has changed since you were in the business, but the poor salesperson minimum commission is still terrible, and that is the majority of what they make. Dealers know the huge majority are going to be ?mini? deals, meaning the sales price doesn?t bust cost. The good dealers have learned to pay big volume bonuses so the salespeople have a reason to be helpful and courteous to everyone.https://www.carprousa.com/wp-admin/edit-comments.php?paged=2#comments-form

Thanks for joining in the discussion.

Jerry Reynolds, President
Car Pro Radio Network
steve s.
Do dealers located in the same area pay the same as the other dealers?
The Car Pro
No only do dealers in the same area pay the same amount, dealers from all over the country pay the same amount. They even average the transportation charges, so a vehicle built in Detroit shipped to a dealer in Detroit, is exactly the same a vehicle shipped to Los Angeles. Good to hear from you.

Jerry Reynolds, President
Car Pro Radio Network
David W.
Well said! I am 100% agreement with you Jerry on this subject.
The Car Pro
Thanks Dave.

Jerry Reynolds, President
Car Pro Radio Network
Alan N.
When a dealer advertisement says$1 over cost, the consumer wants to know the value of the holdback, incentives, etc. The dealer usually whips out the factory invoice and says just add $1.
If you count holdback and incentives they are still making over a grand on the deal.
The Car Pro
No doubt. That is why most states do not allow the use of cost or invoice, and those that do require dealers to say: Invoice does not reflect true dealers cost.

Jerry Reynolds, President
Car Pro Radio Network
Robert E.
This business of the customer's trying to find out what the dealer paid may be a little more than the customer really has a right to know., But a whole lot of aggravation about car buying is the result of the ways dealers have sold cars for decades. Everyone knows the sticker on the window is the beginning point and from there it is a contest of wills to arrive at a price. I, and about a jillion others, hate that. And that goofy, "Let me see what ,my manager says about that" mess. Why cannot dealers simply say, "This is our price on this car."? Or, the price on the windshield is what this car goes for. Dealing is a pain in the patootie, something which always leaves customers thinking they could have done better, and are therefore, a little bit dissatisfied.
The Car Pro
One big issue is the automakers themselves cutting down the margin, meaning what the dealer pays for a car versus the window sticker. I gave out a true stat on the air a couple of weeks ago about Honda. The average dealer profit on a Honda, including everything they get paid is $600. The COST of selling a Honda is $1200, these are true numbers. Dealers make money in every other department, but most today lose money on the sale of new cars. That is not true of some of the luxury brands, but most mainstream brands, new car sales only feed the rest of the dealership.

Jerry Reynolds, President
Car Pro Radio Network
Jay M.
I would offer that the problem is not the consumer, but the car buying process where the customer has no idea if he got a deal or not. In 40 years of buying cars, I have never bought a vehicle and walked out clicking my heels thinking I got a great deal. I am always wondering where I took it in the shorts in the process. It's a process created, developed, supported and propagated by the car industry. If you don't get schwantzed in the buy, you will get schwantzed in the trade in. Car buying makes me ill, I hate the games, lies, and chicannery that goes on at a dealership. In no other industry is the buying process so convoluted and obfuscated for the consumer. You can hardly blame the consumer for trying to do research, they just don't want to get screwed (again).
The Car Pro
I suspect you are convinced before you walk in the door of a dealership what is going to happen. That tells me you?ve never purchased from a good dealership. Good dealerships don?t play games or do the back and forth dance.

I don?t blame any consumer for doing research, that?s smart and I encourage it. The research should be on the best deal, not what the dealer paid.

Try it my way sometime, you?ll figure out what I am talking about.

Jerry Reynolds, President
Car Pro Radio Network
Bob .
I tend to agree with Jay... "invoice price selling" (above/below/around and through) is just one of many sales techniques developed by the automotive sales industry. And how dare the consumer to turn this around as a point of negotiation. Both you correct... Kerry in saying the buyer will NEVER know the "cost to dealer" and Jay who identifies the "games, lies, and chicannery" that are put in place to make it impossible. Anyone else feel all warm and fuzzy now?
Richard D.
Buying a car is a very stressful time for me! My wife is exuberant over color and looks of the car! I worry about performance, safety and price! Although, I usually feel I got had somewhere I give it hell while I am there and leave with the understanding I did the best I could on that day! Just the nature of the game!