back to articles | December 31, 2018 | Dale Peterson

Categories: Tips & Insights For Car Buying Buying & Selling Cars

Car Invoice Prices

What is the car invoice price?

Historically, dealers would never let the customers see the car invoice. But these days, car invoice prices are no big secret. Car invoice prices are available from books such as Kelley Blue book or on most online auto sources. But how valuable is the information? The car invoice supposedly lists the total price the dealer paid the manufacturer for the car and details the costs to the dealer such as base cost, holdback, gasoline, make ready servicing and advertising fund. But in many cases, the car invoice price is far from how much the dealer actually paid for the car.

Car Invoice Prices: Is this what I should pay for a car?

Sticker price, invoice price, factory to customer incentive, factory-to-dealer incentive, rebates, holdback, backdoor money – are you totally confused now?

Factory Invoice

Let's start with factory invoice. This is the amount actually billed to the dealer for the car. The dealer pays invoice, less holdback. Holdback is compensation to the dealer from the manufacturer for advertising and other expenses. It is usually a few hundred dollars, and the exact amount can often be found on the factory invoice.

The factory invoice for the car you want is available from almost any dealership, your local library, the Internet, and countless consumer guide publications. This makes finding the true cost, which can be thousands less, much easier.

Factory to Dealer Incentives

Next come factory to dealer incentives, called 'backdoor money'. These are usually the big deductions. These are not publicized and can be very significant. They can be tricky to find out about and are also sometimes time sensitive. The best way do determine factory to dealer incentives are:

• Ask the sales person how much the dealer incentive is
• Check advertisements for the car you want

Customer Rebates

Customer rebates are the next item to be aware of. These don't always exist, but are easy to find out about as they are heavily publicized by the manufacturer and dealers. They usually take the form of cash back deals or low financing. So, true dealer cost, not dealer invoice, should look like this:

Invoice price - Holdback
-Dealer Cash
-Customer Cash
= Dead cost