New Car: MSRP VS Invoice VS Estimated Market Price?, Vehicle Pricing and what it mean
10-31-2006, 06:40 AM
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New Car: MSRP VS Invoice VS Estimated Market Price?, Vehicle Pricing and what it mean
Hi Everyone, 
I'm thinking about buying a new car. The breakdown goes as such (My question is all the way at the bottom):
MSRP: $37,000
Estimated Market Price (EMP): $36,000
Invoice: $34,000
MSRP means:
-The Manufacturer's Suggested Retail Price (MSRP), also commonly known as the "Sticker Price", "List Price", or "Window Price", is a price that the vehicle manufacturer suggests that the dealer sell the car for.
EMP means:
-Estimated Market Price (EMP) is the estimated price that people are currently paying dealers to buy a specific vehicle
Invoice Means:
-Invoice, also commonly known as "Dealer Invoice", is the price that the vehicle manufacturer charges a dealer to purchase a new vehicle from the manufacturer.
***Question***:
What seems to be the most important of these 3 things (MSRP, EMP, and Invoice) is the Invoice price? I would imagine that if it trully costs the dealer $34,000 to buy the car from the manufactuerer, then the dealer would not sell me a car UNDER that invoice price? Is that a good rule of thumb or assumption?
I have heard people buying cars "below invoice". However, I would imagine that it's hard to purchase a car below invoice? Which means that if a the Invoice for a car is priced at $34,000 then it would be pointless for me to assume/expect/hope that the dealier would sell me a car say at $30,000? Which leads me to another question: What would be the rule of thumb for requesting a car under the invoice price be? No more than 2% below invoice? Or perhaps 2% above invoice would be the rule for what they would sell for?
I would imagine a dealer would not be willing to help me into a car if he/she is not making a good profit off the customer?
I'm looking forward to everyone's input!
Thanks!
Jason
I'm thinking about buying a new car. The breakdown goes as such (My question is all the way at the bottom):
MSRP: $37,000
Estimated Market Price (EMP): $36,000
Invoice: $34,000
MSRP means:
-The Manufacturer's Suggested Retail Price (MSRP), also commonly known as the "Sticker Price", "List Price", or "Window Price", is a price that the vehicle manufacturer suggests that the dealer sell the car for.
EMP means:
-Estimated Market Price (EMP) is the estimated price that people are currently paying dealers to buy a specific vehicle
Invoice Means:
-Invoice, also commonly known as "Dealer Invoice", is the price that the vehicle manufacturer charges a dealer to purchase a new vehicle from the manufacturer.
***Question***:
What seems to be the most important of these 3 things (MSRP, EMP, and Invoice) is the Invoice price? I would imagine that if it trully costs the dealer $34,000 to buy the car from the manufactuerer, then the dealer would not sell me a car UNDER that invoice price? Is that a good rule of thumb or assumption?
I have heard people buying cars "below invoice". However, I would imagine that it's hard to purchase a car below invoice? Which means that if a the Invoice for a car is priced at $34,000 then it would be pointless for me to assume/expect/hope that the dealier would sell me a car say at $30,000? Which leads me to another question: What would be the rule of thumb for requesting a car under the invoice price be? No more than 2% below invoice? Or perhaps 2% above invoice would be the rule for what they would sell for?
I would imagine a dealer would not be willing to help me into a car if he/she is not making a good profit off the customer?
I'm looking forward to everyone's input!
Thanks!
Jason
10-31-2006, 07:56 AM
#2
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"Invoice price" is NOT what the car cost the dealership. The dealers get certain concessions from the manufacturer that reduces the dealer's actual cost.
One of these concessions is the "dealer holdback", normally about 3% of the invoice price. So in your example, if a dealer sold you that car at his invoice price, (34,000) he would still be making about $950-1000 gross profit on the deal.
bill
One of these concessions is the "dealer holdback", normally about 3% of the invoice price. So in your example, if a dealer sold you that car at his invoice price, (34,000) he would still be making about $950-1000 gross profit on the deal.
bill
10-31-2006, 08:08 AM
#3
Not to mention any rebates or incentives offered the dealer. For example, the manufacturer might have an incentive that if the dealer can sell 100 of xxx type cars in one month, the dealer will get an extra $500 for each car sold. If you arrive at the end of the month and the dealer has sold 99 of the car in question, then the dealer will sell the one to you for less than invoice just to get to that 100 mark and collect the bonus incentive. Of course, the dealer never discloses which cars have rebates and incentives, and for how much.
Will
Will
11-01-2006, 07:23 AM
#4
Welcome. You have done a lot of research. Great start. You will never know what a dealer paid for a vehicle because of holdbacks and discount for volume purchasing. Lets keep car buying simple:
a. Find the car that you want.
b. Determine the maximum that you are wiling to pay.
c. Make your best offer.
a. Find the car that you want.
b. Determine the maximum that you are wiling to pay.
c. Make your best offer.
11-01-2006, 08:50 AM
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I wish that reasoning would work for me! I know the car I want and even if I cant afford it I will buy it! I need to find THE best deal possible on a new 06. So having the knowledge of these things is crucial, knowledge is your best weopon and there must be ways to use it.
11-01-2006, 09:15 AM
#6
Originally Posted by fleshstorm
I wish that reasoning would work for me! I know the car I want and even if I cant afford it I will buy it! I need to find THE best deal possible on a new 06. So having the knowledge of these things is crucial, knowledge is your best weopon and there must be ways to use it.
11-01-2006, 09:37 AM
#7
ALSO;
Dealer's don't haggle on the opening price as much as you might think. $500 over invoice is pretty much the "defacto" deal at most places.
The Dealer WILL try to get you on "extras" like paint protection, window etching, undercoating. All of these will be on a separate sticker from the Factory window sticker. ALWAYS refuse to pay for those items and leave if they will not remove them. They cost the dealer nothing in most cases and are almost always 100% pure profit.
Dealers make a lot of money in the finance room. Have your own loan approved with a vendor of your choosing and compare the rate to the dealer's rate. Go with the Lowest. Loans are a commodity and are the same no matter where you go.
Also, Don't buy an extended warranty if it costs over 5% of the cost of the car. Anything over that is typically too much.
DO buy GAP insurance if you make NO down payment or finance for more than 4 years. It is typically $500-$600 and will cover the remainder of your car loan if you ever crash it to a total.
Take a calculator with you and check EVERY number on the finance contract. Take your time, you are in no rush. I have spent 3+ hours in the finance room before to make sure Everything is spot-on perfect.
Always be willing to walk away.
Dealer's don't haggle on the opening price as much as you might think. $500 over invoice is pretty much the "defacto" deal at most places.
The Dealer WILL try to get you on "extras" like paint protection, window etching, undercoating. All of these will be on a separate sticker from the Factory window sticker. ALWAYS refuse to pay for those items and leave if they will not remove them. They cost the dealer nothing in most cases and are almost always 100% pure profit.
Dealers make a lot of money in the finance room. Have your own loan approved with a vendor of your choosing and compare the rate to the dealer's rate. Go with the Lowest. Loans are a commodity and are the same no matter where you go.
Also, Don't buy an extended warranty if it costs over 5% of the cost of the car. Anything over that is typically too much.
DO buy GAP insurance if you make NO down payment or finance for more than 4 years. It is typically $500-$600 and will cover the remainder of your car loan if you ever crash it to a total.
Take a calculator with you and check EVERY number on the finance contract. Take your time, you are in no rush. I have spent 3+ hours in the finance room before to make sure Everything is spot-on perfect.
Always be willing to walk away.
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11-01-2006, 09:37 AM
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Thats definately good advice, but I dont even have enough knowledge to know when the deal is really favorable, I have NO business buying a new car. But thats why I gave myself till Dec/Jan to buy. I just hope I can wait that long.
11-01-2006, 09:47 AM
#9
Originally Posted by fleshstorm
Thats definately good advice, but I dont even have enough knowledge to know when the deal is really favorable, I have NO business buying a new car. But thats why I gave myself till Dec/Jan to buy. I just hope I can wait that long.
11-01-2006, 10:44 AM
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Dude thanks so much for taking the time to type all that. It really will help. I must have a pretty good dealership here cause they didnt try to tack on any of that stuff. My price was "out the door" Im gonna go back and talk to them again Im sure so Ill keep an update going. Its damn Silverstone though.
11-01-2006, 10:46 AM
#12
Originally Posted by fleshstorm
Dude thanks so much for taking the time to type all that. It really will help. I must have a pretty good dealership here cause they didnt try to tack on any of that stuff. My price was "out the door" Im gonna go back and talk to them again Im sure so Ill keep an update going. Its damn Silverstone though.
11-01-2006, 11:24 AM
#14
Originally Posted by fleshstorm
Dude thanks so much for taking the time to type all that. It really will help. I must have a pretty good dealership here cause they didnt try to tack on any of that stuff. My price was "out the door" Im gonna go back and talk to them again Im sure so Ill keep an update going. Its damn Silverstone though.
11-01-2006, 11:37 AM
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I left the paperwork at the dealer but I know it was a little over 30K. The Invoice total was 23.5K I believe and I was quoted an "out the door" price of 28.5K for an 06 Enthusiast in Silverstone. Sounds like a good deal right? I just wish it was super black or PPW. I told them that I was not interested that I wanted the track package and it was the last color that I wanted so maybe they will lower the price for me. Ive been proud of myself for how much patience Ive shown thus far. LOL! If it had been Black I'de be posting pictures next week!
Last edited by fleshstorm; 11-01-2006 at 11:43 AM.
11-01-2006, 12:05 PM
#16
Originally Posted by fleshstorm
I left the paperwork at the dealer but I know it was a little over 30K. The Invoice total was 23.5K I believe and I was quoted an "out the door" price of 28.5K for an 06 Enthusiast in Silverstone. Sounds like a good deal right? I just wish it was super black or PPW. I told them that I was not interested that I wanted the track package and it was the last color that I wanted so maybe they will lower the price for me. Ive been proud of myself for how much patience Ive shown thus far. LOL! If it had been Black I'de be posting pictures next week!
11-01-2006, 12:38 PM
#18
Tell them you will give them 26k for it or u walk out the door and buy an 07 for 29k in Feb. Im sure they will bit b/c they are still going to make around 2500 on this deal. Not to mention the financing which is were they will rake in another couple grand. Or better yet ask the dealer for his carbon copy of the invoice which shows you exactly what they paid for the car. Hope this might help you out.
11-01-2006, 12:43 PM
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Cool Ill see what I can do does it make a difference that this car is not actually at the lot? They found it at another dealership and will transport it up here for free.
11-01-2006, 01:06 PM
#20
Originally Posted by fleshstorm
Cool Ill see what I can do does it make a difference that this car is not actually at the lot? They found it at another dealership and will transport it up here for free.