What Is A True Dealer Invoice Price

A dealer invoice is the invoice that the manufacture sends to the car dealer to pay for the vehicle. Each car, truck etc has a unique vehicle ID number which will be listed on the dealer invoice. The invoice will also show the MSRP price. This Manufactures Suggested Retail Price is the marked up price. A typical markup from the dealer invoice may be 12%. However, luxury cars usually have a higher markup and therfore a bigger profit for the dealer.

The invoice price is only a starting point for the dealers true cost of that car. Sure, the dealer has overhead like salaries, commissions, depreciation and utilities. But, the dealer also receives "factory to dealer incentives" and "holdbacks" from the manufacturer. These added amounts decreases the true dealers cost of the car.

The dealer hold back is about 1.75% of the invoice price and gets credited to amount that the dealer has to pay for future cars. Rebates vary by time of year, manufactures and incentives periods.

If you add extras to your car purchase like mats and rust proofing, those addons will also have a substantial profit margin built into them.