|
10 Sep 08 Top Keywords You Need to know Before Car Purchase (1)
In order to get a good deal on car purchase, people need to know what those terms before doing their “homework” as knowing those keywords will help you understand what people are discussing, and how car salespersons play the games.
Destination: Sometimes people called it as freight, but they are the same thing. Destination charge is the expense that manufacturer pays to deliver the car to dealers.
MSRP: MSRP is the brief of Manufacturer Suggested Retail Price, which is the price set by automobile maker that they “suggest” the car should be sold for. MSRP could be defined in two different ways. One way is to include the destination charge, while the other doesn’t . Due to the different definition of MSRP, it is common that dealer would trick car shoppers by telling them a price then when they get to dealer or sign the contract, salesperson tells car shoppers that the price agreed does NOT include destination fee, then they would add another $500~$800, depends on how much the destination charge is. Usually, car price should be less than MSRP. However, since it is all demand and supply, some dealers would mark up the car by a couple thousands and for some the markup could get even much higher.
Invoice: Invoice is the price that dealers pay for the car at the point they receive it from manufacturer. Technically, invoice is the “cost” of the car when dealers receive the car. The reason “at the point they receive from manufacturer” is mentioned is that even though dealers pay for the “invoice price”, they will get different forms of money back after they sell you the car. Invoice price has different definition. Some car makers charge refundable fees such as advertising fee, port fee…etc so dealers are able to honestly increase their invoice price. All these fees are charged to dealers, but after a period of time, money goes back to dealers. It is the reason that dealers’ invoice price is usually different than the invoice price found on internet. Besides those fees to inflate their “cost”, dealers still get holdback, rebate, bonus, award of spin games and all other money after they sell the car. Therefore, at the time they negotiate the price with you, they are telling you the truth that they only make certain amount (or lose certain amount) by selling the car to you at x amount below their cost or they lose money to make the deal. Car Dealers are so good at telling the truth huh?
Tags: Car Buying Tips
Reader's Comments
Leave a Comment
You must be logged in to post a comment.
[...] first net is the car price difference between the MSRP of the car and the car invoice price. It is obvious that even though the car invoice price looks [...]
[...] first net is the car price difference between the MSRP of the car and the car invoice price. It is obvious that even though the car invoice price looks [...]