What is the difference between dealer invoice and MSRP.?

Question:
I am buying a new car and their offer is $250 over dealer invoice. How does that compare to the MSRP on the window sticker?

Answers:

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MSRP stands for manufacturers suggested retail price and is just that - a suggested retail price from the maker of the car. Dealer invoice is what the dealer pays for the car, minus any incentives they may recieve. What you pay is a negotiation between you and the dealer. The manufacturer sells to the dealer, not you. A good site to do research on is edmunds.com in which they list "true market value" - a price that is indicative of what a fair negotiated price is for a given car in a given area. This usually leaves a fair profit for the dealer and salesperson, yet gives you a discount off of MSRP. Beware that the dealer will often try to pad the bottom line after the deal is supposedly done by adding "documentation fees", and trying to sell you other add ons. Negotiate an "out the door price" before hand and demand they stick to it!

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$250 over invoice is a better price than MSRP.

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MSRP can be several hundred to several thousand above invoice depending on the vehicle.

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The dealer invoice is the price the dealer paid for the car. The MSRP is the suggested retail price for the consumer that nobody pays.

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$250 over dealer invoice is usually a good bargain, but don't take the dealers word for it. Go to Edmunds.com and build your new car with the make, model, trim level, and options. They'll tell you what the dealer invoice is, as well as the MSRP and finally, what the average selling price is.

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Lastly, there are hidden mfr to dealer rebates called "holdbacks." Undoubtedly your dealer is getting one of these, otherwise they couldn't afford to sell it for just $250 over dealer invoice. Just realize that and maybe try to talk them down to dealer invoice price. In my last car shopping experience, I had two dealers offer me $250 over dealer invoice, and 1 offered me dealer invoice price, for cars that didn't really meet the specs I wanted, but were the same make and model.

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Dealer invoice is what the deal had to pay for the car, MSRP or manufacters suggested retail price is what they suggest the car should be sold at in order to turn a profit.

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