The Car Buying Secret Every Driver Should Know: How to Use the Invoice Price to Your Advantage

Everyone wants a good deal when they shop for autos. However, most drivers aren't aware of a number that helps, more than any other piece of information, when securing the best possible negotiated car price. It's called the "invoice price" or the "true dealer cost."

What is an invoice price?

Simple. It's the price the dealership paid to get the car. That's right, the dealer had to purchase it before offering to sell it to you. The thing is that the invoice price is usually kept secret. Dealers don't readily share it and drivers don't usually ask to see it. They might be denied if they do ask. Further, the dealership's invoice won't clearly state the price of purchase. There will be all kinds of technical mumbo jumbo on the document, making it difficult for people outside the industry to understand. We offer a solution to this problem, which we'll discuss in a minute.

Why does the invoice price matter?

The invoice price, or true cost, is important because it's usually close to the lowest amount the dealership will sell a vehicle for.

Keep in mind that there are exceptions:

  • Sometimes dealers offer vehicles far below invoice price because they haven't been able to sell them yet.
  • At model year-end time, dealers often sell models from the previous year for below invoice price to make room for newer models.

How do I use the invoice price to help me get a good deal?

You can use it as a point of reference and set a target purchase price. Under normal circumstances, you can assume your dealer might be willing to sell the vehicle at just above the invoice price. There are some scenarios you should be aware of, though.

  • New Model-Year: If you're buying a car that just arrived on dealership lots for the first time, there will probably be less wiggle room. You should still try to negotiate, though.
  • End of the Month: If it's the end of the month (the last day or two), your dealer might actually be more lenient. If it's not a brand new model-year vehicle, you may even be able to achieve a purchase price that is below the invoice price. The dealer can still profit in this situation, due to financing options and the way the manufacturer compensates retailers.
  • Leasing: A lease deal is exactly like a purchase or loan deal, in terms of the value of the car. You can negotiate the sale price of a leased vehicle even though you're technically not purchasing it. Your payments are based on the value of the vehicle that you establish with the salesperson, through negotiation. Therefore, the invoice price is useful in this scenario.

What's that solution or "workaround" to the invoice secrecy problem?

It's pretty simple. We give you the invoice price of whatever vehicle you want. A straightforward number is available via our free online quoting system, for any vehicle at any dealership in your area. Just request a quote for any car or truck and you get the invoice price and any special incentive offers your local dealers offer. Not the promotions you see on TV. We're talking about promotions you only get online, from dealers in our network. Click here to get your free, no-obligation quotes and invoices.