Q:

How can you determine the original dealer price of a car?

A:

Quick Answer

One way to determine the original dealer price of a car is to subtract the hold back, options, destination fee and incentives from the base invoice price of the car. Knowing dealer cost on a car helps buyers have leverage when it comes to negotiating with the dealer.

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Full Answer

The first step to determining dealer cost on a vehicle is to obtain the dealer invoice price. Sites such as Edmunds.com among others offer the dealer invoice price of vehicles. Make sure, however, that the price listed reflects options, destination fees and the various marketing fees the manufacturer includes. A site listing true dealer invoice price should take all these costs into consideration. Otherwise, the price you get is not the true invoice price.

The second step is to figure out the hold back amount, also known as the hidden profit. This is a complex series of payments from the manufacturer to the dealer that ensures the dealer makes money on the sale. Hold back is usually 2 to 3 percent of manufacturer's suggested retail price or invoice price. Subtract hold back from invoice to get an approximate calculation of dealer cost.

The final consideration is rebates from manufacturer to dealer or to customer. Find out these numbers to calculate an even more accurate dealer cost.

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