How can a dealership sell a car at a price that is close to their invoice price and still make a profit?
Dealerships can sell a vehicle at a low price that is close to their actual invoice price for any of a variety of reasons:
- The dealership may be receiving additional money back from the manufacturer in the form of a "holdback" (or "kickback") for selling a certain volume of cars.
- There may be a factory-to-dealer rebate for the car they are selling.
- The dealership may be making its profit from the financing of the vehicle rather than from the selling price of the vehicle.
Because the dealership has these alternate means of making a profit, selling a vehicle at a price that is close to their invoice price is sometimes not a problem for them.
- The dealership may be making its profit from its Service Department rather than from its Sales Department.
And by the way, you can learn the dealership's actual invoice prices for all new cars and trucks at the helpful Edmunds website.
Car Buyer's FAQ
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