Determining The Invoice Price
New Cars and Trucks
The dealer's wholesale cost - the amount he pays for the new cars and trucks he sells - is called the invoice price.
Wouldn't it be great if, when you walked into the dealership to buy your new car, you knew exactly how much the dealer paid for the car you're going to buy - his invoice price? Well, you can. Easily.
Learning the dealer's invoice price is one of the most important things a car buyer can do.Fortunately, there are several good websites that offer this valuable information. One of the best is the very helpful Edmunds website. Since 1966, Edmunds has published vehicle invoice prices in the form of a magazine-like publication. These days they're offering the same exact information free-of-charge online. Their site is certainly worth a visit.
Used Cars and Trucks
Prices for used cars are determined, to a certain extent, by the various Used Car Pricing Guides. In reality, however, actual prices are influenced more by the marketplace (supply-and-demand) than by any other factor. Still, knowing the Guide's prices for the vehicle you plan on buying is one of the most important pieces of information you can have when negotiating the price of your used car.
The most widely-used Used Car Pricing Guides are NADA Guides and Kelley Blue Book. Previously available only to dealers and banks, these important and helpful pricing guides are now available free-of-charge on their websites.
The Pricing Guides offer different figures for each vehicle. The "trade-in" price is what a vehicle owner can expect to receive from a dealerhip upon trading in their vehicle. The "private party" price is what they can expect to receive if they are selling the vehicle themselves. The "retail" price is the suggested selling price for a dealership. Generally, dealers try to purchase vehicles at a price lower than the trade-in price and then resell them at a price close to the retail price. The trade-in price will be your starting point for your negotiations with the salesman.
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