26 Apr 09 Triple Net, What is the Meaning of Triple Net Price in Car Purchases?

Triple Net have several meanings in different areas. Since we focus on providing car buying tips, triple net price discussed here would be on what people use for car purchases.

Triple net price, as the term shows, is the car price after three types of possible money that car dealers would be able to give out, and given to car dealers by car manufacturers.

The 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 like the cost to car dealers, it is NOT the real cost for the car. There could be a lot of cash back to car dealers under the table from auto makers, so it makes car salesperson and car sales managers easier to have a number to show car shoppers that is the cost of the car.

The second net is all public car incentives and auto rebates available on the car and model. Use the invoice price of the car and take out the amount of all rebates and incentives. Keep in mind that besides those manufacturer-to-customer cash rebates that are taxable, there could be manufacturer-to-dealer cash incentive that are NOT taxable since it will not be shown on the sales invoice.

The third net, which is the part that some auto dealers would not give out, is the car holdback, which is normally between 1% to 4% of MSRP for the car, depends on the car manufacturer. The reason that car dealers would not like to pass this incentive out is passing out holdback makes their balance sheet negative for this car purchase, despite the fact car dealers would be able to get it back.

You might be wondering that how car dealers make money if they sell cars for triple net price. which seems to be there real cost.

The good thing about the business in car sales is there are many private auto rebates and hidden dealer incentives back to car dealers after cars are sold. Therefore, don’t worry about car dealers as they will always get enough money, if not too much money from people who do not do their homework before making the car deal.

Now you know what triple net means in car purchase, and it would be a good start to negotiate a car deal. Please report your car price to us as it helps us to identify and discover all kinds of hidden car incentives and customer rebates.

Tags: Car Buying Tips

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