Define "Invoice Price" Please!

sarcasm

 

Huh, what? You asked what his handle meant and I replied with the meaning.

 

I suppose you think free shipping is fake, too.

 

Unless you are paying completely in cash, a lot of the extra "deal" between paying "invoice" vs. $600 under invoice works out to less than $12/month, or roughly $665 over a 60 month loan at 1.99% interest. If you can't beat $665 over 60 months with your money in other investments, by all means, knock yourselves out working the dealers over for $600-$1000 lower price.

Granted, it all adds up, so those of you that run a tight ship and win at everything in life, hats off to you. For me personally, a single car payment is the only debt I have other than a mortgage. I'll sacrifice a few other things a month as needed to make up the difference, arguing with car dealers sucks. My cost vs. aggravation analysis says save it for something bigger. To each their own though...

 

https://www.tacomaworld.com/threads/3rd-gen-tacoma-model-package-option-costs-master-list.388345/

 

It does happen. Every once in a while we will get a vehicle for a customer and it's a "what price do we need to be at to get the deal done right now" because the dealer taking a $1500 loss on that 1 sale but gaining the sale puts them over a certain mark which gains them a bigger bonus from the manufacture. It's rare but it does happen, usually around this time of the year. Nov/Dec/Jan 1st are the best months and day (Jan 1st because the dealers can back date the paperwork) to buy a vehicle because if they are close to making their end of the year numbers they will be more willing to go down on the price.

 

Yeah and in doing that they still make money. They will never sell a vehicle at a loss.

And if you buy at msrp you are a fool as well.

 

Yep a loss on the vehicle but a huge gain in the long run, for both parties.

100% agree. You should never pay over dealer invoice for a vehicle (dealer invoice defined as including holdback and finance money). Paying anything over that, you are rushing into the sale. If you have the money to blow, go for it otherwise wait it out to get the better price and try to haggle for base invoice.

 

From what I have read and "heard" the holdbacks and the hidden dealer profits are the only real true "unknowns", that is unless you are the dealer (owner) or their accountant. Even that could change from dealer to dealer ( I think) . They have to make a little --it's just that "little" varies from customer to customer. I think I got a fair deal --some get better --some get worse!
Plus the sales guys/gals have to make a living -- at least they are working --unlike millions in our society who sit on their butts collecting welfare!!

 

Wow...just finished reading this thread. The dealer invoice stuff makes my head spin.

I just go into it looking at the MSRP and the option breakdown. Since there's about 1000 variations Toyota throws at you within each trim option, i went shopping knowing what the going price for the SR base model is. No one within a 100 mile radius had an SR and if you really want it, you had to special order it.

So if you want an SR but don't want to special order, then the next best thing is to shoot for an SR5 for an SR price. That's what I did. Didn't get the exact rock bottom SR price but came close to it. It was the only SR5 left on the lot. They had several TRD's from the $35k to $40k range...probably could have got a better deal on one of those trucks but I wanted a 4 cylinder and didn't want to be at $30k.

After reading this thread though, maybe ordering one could be a win/win for customers and dealers and perhaps it's a way to work a good deal. Dealer makes something (but not much) and dealer gets credit for selling a car.

No one will give cars away and I don't mind the dealer making a fair profit...just not an obscene profit on my back.

No reason to ever pay MSRP.

 

"Here is the spec sheet from Toyota - looks like it had an invoice of $31,901. Love the Blazing Blue!"...This is from stefanthetoyotaguy

I paid $31,500

 

To the original question: At one time in the distant past MSRP was the marketing number around which a price was negotiated. An invoice was the amount the dealer paid the manufacturer and it never came into play in negotiations. At some point in the past some salesman started showing customers an invoice that represented what they paid as part of the process (I'll sell it to you at $500 over invoice) as part of the sales pitch. As customers started expecting to see invoices, dealers and manufacturers developed a system to move a lot of the financial transactions away from the invoice, so the invoice now represents more of a marketing tool as it does a true cost to the dealer. In effect, the factory says "I'll charge you 25K for the car on the invoice and you will pay me that much to keep it legal, but I'll give you 2K back when you sell the car. It really cost you 22K but you can show the customer the receipt for 25K."

So, what does it mean? While this is not a perfect model, you can think of MSRP and Invoice as the two extremes in a range of prices in which the dealer is thinking about negotiating and expects 90%+ of their deals to fall in that range. For a vehicle in high demand that the dealer expects to sell easily they will push towards the MSRP end and in some rare cases higher. For a vehicle that is in less demand with respect to inventory levels they are more likely to be willing to negotiate somewhere closer to MSRP and in relatively few cases below.

All of this, of course, assumes that the deal consists of simply buying a new car outright. Dealers love to give you a good deal on the new car and make up for it on the trade in. Why? Because most people do their homework on the new car but have no idea what their trade is worth. People often walk out of the deal smiling because they just negotiated a deal for invoice or slightly below, while the dealer gave them 20k in trade on a vehicle that he will sell for $28K. They will of course also try to extract more money from the finance department as well.

Bottom line: the invoice price is one of the greatest marketing tools ever devised. It gets you measure your deal based on a one number that, while not meaningless, doesn't mean what you think it does, and more importantly diverts your attention from all the other ways they taking money from you. Be informed.

 

Glad somebody gets my humor.