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Understanding New Car Pricing
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| Updated |
Jun 10, 2004 21:21:13 |
| Rating |
 130 ( -14 -10.76% ) |
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Description:
Until a few years ago, consumers only had access to the Manufacturer's Suggested Retail Price, and were kept deep in the dark about true dealer cost. Autobytel.com and the Internet changed that. For each model at 'New Cars' and 'Pricing' at Autobytel.com, two prices will appear: dealer invoice and MSRP. Note that thousands of dollars may separate these two pricing points.
MSRP, or window sticker, is the higher figure. Set by the factories, it will tend not to represent true dealer cost, and (as the name suggests) is merely their 'suggestion.'
Dealer invoice pricing at Autobytel.com is provided by reliable third-party sources like Edmund's, and represents what the dealer actually, legally paid for the car. It is also set by the factories, and is standard nationwide.
A simple formula for hitting a LOW benchmark price point on that new vehicle.
Begin with dealer invoice pricing at Autobytel.com at each make and model's page. Or go to "Pricing" and "Free Car Buying Information," and investigate numerous pricing sources from Autobytel.com well-respected partners: Edmund's, Intellichoice, carprices.com, and Kelley Blue Book.
Remember: dealer invoice pricing is the figure for the base model at each trim level. Use Autobytel.com's Car Builder to get the correct figure for the car that has the options and option packages you want. It's easy: as you add options, the price changes automatically.
Autobytel.com provides dealer invoice pricing information AND MSRP for all option packages. Many options are bundled together, saving the factories' production costs, and they can be a great deal. Research what you are paying for-in a package or as an individual feature-and what's the better deal.
Visit the Rebates section, and then subtract all current dealer or consumer rebates on the vehicle you want to buy. LINK. If you opt for a cash rebate, subtract that from dealer invoice. Often, special financing is an alternative, or a part cut-rate financing, part cash rebate deal is offered. Learn all about rebates here. LINK.
Some manufacturers charge dealers an advertising fee, some do not. If so, add these. Local dealer and regional marketing fees (which range around $200) are not set by the factories or set in stone. Add if applicable and reasonable.
Add sales tax, license, registration and destination charges, which appears alongside dealer invoice and MSRP.
Hitting the target price is one key part of the equation. But, research every aspect of the car-buying process as a separate purchase. Inform yourself about trade-in values, and get multiple, competitive insurance and financing quotes at Autobytel.com's insurance and banking centers. Keep them separate in your mind.
You've arrived at your low target price, which does not take into account any fair dealer profit. Consumers may think new car dealers make $1,000s on each car sold-statistics show it's more like $100.
Many vehicles can be bought at or near the price you reach with this easy formula. However, in between this low target price (invoice plus options, minus incentives, plus legitimate fees) and the high-end MSRP, lies real-world market conditions.
Cars, obviously, are subject to the free-market laws of supply and demand. This figure is designed as a working tool, but some hot-demand, limited production models will always command prices over MSRP, and other less hot vehicles will actually sell for under invoice.
Dealer invoice pricing info helps drive the market price the car will actually sell for down-benefiting the consumer. Without it, you have no pricing touchstone to work from.
Autobytel.com dealers expect a savvy and informed consumer, armed with this pricing info, and are trained to offer the best price, given local market realities. This benchmark helps consumers get -- and recognize -- a good deal. |
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