Difference Between New Car Manufacturer and Dealer Prices

Difference between new car manufacturer and dealer prices is a term that many people should look into before they complete a purchase. This amounts to the suggested retail price of the manufacturer and the actual price you are charged by the dealer when buying a new car. Unbeknownst to most customers, there are several fees that manage to be squeezed in between these two amounts. In order to avoid them, you must first be aware of them.

One area these fees are common in is dealer incentives and holdbacks. These are defined as what the dealer paid to the manufacturer for the vehicle, which is less than the invoice price. Many times, these holdback prices are given to fleet customers, but not offered to the average customer off the street. If you are aware of these incentives, you will have some negotiating power in terms of a couple thousand dollars at times for the particular vehicle you're looking at.

Other charges come into play when you consider the market adjustments and destination fees for each vehicle. Certainly, some neighborhoods and market areas are more expensive than others. Therefore if you were to buy a vehicle in a high-end market versus a lower end market, you may end up paying quite a bit more for the same exact product. Destination fees work like shipping charges and these are based on how far the vehicle has traveled from the manufacturer.

Dealer prices also include options that can be excluded at the choice of the buyer. These features include extended warranties, etched Windows and other services that are not necessary to the original purchase. If you know how to avoid these, then you will be looking for them and not be forced to include them in the dealer's price that you end up paying.

If you really want to save money on the purchase of your new car, do some research at the manufacturer's website. This is where you can get baseline prices without any dealer additions. These will not include extra accessories or holdback fees or extended warranties. Rather, this will be a straight price for the vehicle as you purchase it. Having this data in your hand will allow you to negotiate effectively and wisely when you are actually at the dealer's lot.

Remember that the dealer originally paid less than the car invoice price to acquire the vehicle in the first place. They are in business to make a profit and you are aware that there is a window of about a couple thousand dollars. Use this information to negotiate a lower price than the window sticker will show. When you start this process informed, you will be able to ask more intelligent questions and use the results of your research to gain a better deal. In fact, if you take the time to comparison shop online before you visit a dealer, you will be able to show them what the baseline price is at competitor lots.

Many times, in order to keep the sale and eliminate new car manufacturer and dealer price differences, they will be willing to match this price for you. This is especially true if you have shopped around for interest rates through various finance companies in the region. Bringing this financial information with you will not only save time, but it will show that you are an informed consumer prepared to negotiate the best deal for you. It is much easier to avoid the pitfalls of dealer markups and hidden fees when you know they are present. Be savvy in your shopping for a new car and don't fall prey to them.

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