Sunday, January 31, 2010

How to Negotiate a Good Deal on a Car

An auto insider tells me to ask to see the dealer's invoice and offer $100 over the invoice price.

I reconfirmed this with a friend who is familiar with the auto industry from the dealers' perspective. He writes:
I'd say this is a good rule of thumb and is a common tactic salespeople encounter.

The dealer invoice price normally has something called "holdback" built into it, it's a reserve that is paid to the manufacturer but then re-released back to the dealer after the sale is made during dealer-manufacturer accounting reconciliation.

It's a buyers market in many ways but I'd say sticking with the invoice + $100 is a decent strategy because sales managers will be incredibly reluctant to make deals that cut into dealer holdback even if the customer is somehow aware of this.
In other words, if you pay only $100 above invoice, you are getting a decent price. However, if you are a tough negotiator and want to go for the throat, there's still a little room in there.


  1. Are they obligated to show you the dealer invoice?

  2. why not just buy used?

  3. The absolutely best price, without having to sit and haggle is to buy the "paper car" - BUT, you need to have decent credit or you'll end up giving it all back in financing.

    Outside of the paper car, the other best way to buy a car is to email, the "internet department" of the dealers in your area. This shows that you are shopping for the best price, and that you're smart enough to use the internet, these guys know it, and you'll even be able to get some of the hold-back money SOMETIMES. Because of the cut-throat nature of the internet departments you'll USUALLY be able to get the best price by going back and forth through email.
    Again, just don't give it all back in the financing.

  4. And you know what the car salesman said when we were talking about this? Great, I'll go in the back and print up an invoice with the numbers I want them to be...