How to Get Car Invoice Prices and What You Need to Know About Them

In the market for a new car? You're in the right place if you're getting ready to negotiate a deal or if you're just beginning your search. Before you move

Invoice Price: What it Is

Here's something that might surprise you. The invoice price is not the cost of the vehicle. Essentially, a dealer pays the invoice price and a number of fees, including a destination fee, to acquire the vehicle and offer it for sale. We don't know exactly where the invoice price is in relation to the cost to produce the vehicle. We don't even know if the invoice price reflects the actual cost to the dealer. All we know is that the invoice price is usually somewhere in between the break even point (the price at which the dealer recoups all costs) and the MSRP. Therefore, it gives us a better idea of what to offer than the MSRP or sticker price.

But isn't it kind of useless?

We don't think so. Without it, you'll be going into your negotiations blind. Although the invoice price can't always lead us to a precise bid that is 100% certain to be the best choice, it does give you a pretty good idea of how to bargain. Let us explain.

What the heck do I do with the invoice price?

Lots of shoppers use it to estimate the dealer cost. The formula looks like this:

dealer cost = invoice price + fees - holdback

The fees usually total about $600 and the holdback is about 4% of the MSRP.

Other shoppers get the auto invoice price and use it as a general starting point for making an offer on a car. For new cars, just aim somewhere a few hundred bucks below the invoice price and find out if your offer is accepted. There's no penalty for making an offer!

Do used cars have invoice prices?

No, the term "invoice price" refers to brand new cars. For used cars, take the MSRP (the advertised price when new) and calculate the residual value of the vehicle, based on its mileage. You can find the percentage of remaining value, which is the residual value, by checking here. If the car is in bad shape, you can subtract a little more value and make an offer accordingly. Conversely, a really good-looking car may be worth even more than the residual.

How do I find the invoice price?

That's the easy part. Just request quotes from us. Once you've selected a vehicle and a dealer in your area, we'll let you know what the invoice price is. We will also provide you with incentives you won't find elsewhere. Dealers in our network sweeten the deal for you by offering exclusive discounts! Select your vehicle and get your free, no-obligation quotes here.