What is invoice?

[Fawkes]

Perhaps this has been answered, what is dealer invoice? The price the dealer paid to the manufacturer, correct? So 8% below invoice would be 8% under what the dealer paid?

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[u-joint]

Invoice is a gimmick. You'd think it's the price the dealer pays, but it's not as clear cut as that.

To put it in perspective, dealers still make money when they sell below invoice. The reason for this is called holdbacks and incentives. Each dealer receives (essentially) a kickback when they sell a vehicle, allowing aggressive dealerships to make profit even at or below invoice price.

But, to directly answer your question, "yes" invoice is what the dealer "paid", but don't confuse that with the idea that SALES PRICE - COST (i.e. INVOICE) = GROSS PROFIT, but rather:

SALES PRICE - COST (i.e. INVOICE) + HOLD BACKS + INCENTIVES = GROSS PROFIT.

Also, remember, that dealerships make money in three departments: sales, service, and finance. So the true gross profit calculation will also include everything sold to you by the back office (e.g. financing, extended warranties, service contracts, etc).

 

[Fawkes]

Invoice is a gimmick. You'd think it's the price the dealer pays, but it's not as clear cut as that.

To put it in perspective, dealers still make money when they sell below invoice. The reason for this is called holdbacks and incentives. Each dealer receives (essentially) a kickback when they sell a vehicle, allowing aggressive dealerships to make profit even at or below invoice price.

But, to directly answer your question, "yes" invoice is what the dealer "paid", but don't confuse that with the idea that SALES PRICE - COST (i.e. INVOICE) = GROSS PROFIT, but rather:

SALES PRICE - COST (i.e. INVOICE) + HOLD BACKS + INCENTIVES = GROSS PROFIT.

Also, remember, that dealerships make money in three departments: sales, service, and finance. So the true gross profit calculation will also include everything sold to you by the back office (e.g. financing, extended warranties, service contracts, etc).

Thank you, sir. I really appreciate the info. Looking to trade in my sport for a Rubi, didn't want to get bamboozled

 

[u-joint]

Thank you, sir. I really appreciate the info. Looking to trade in my sport for a Rubi, didn't want to get bamboozled

FWIW (and you may know this), but I'd approach it this way:



1) Determine the value of your current vehicle. Get quotes from CarMax, vroom, Carvana, etc.

2) Determine the price you're willing to pay for your new vehicle.

2a) If you're up for traveling then this is a known cost (search for dealers like Gupton), otherwise....​

2b) Do a search in your area for what other dealers are selling vehicles for. ALWAYS tell them that you're not sure if you are trading in a vehicle - they will want to play shell games otherwise.​

3) Once you have a sell-price for your vehicle, and a target buy price based on what OTHER dealers are selling for, go to your preferred dealer.

3a) Again, approach this as a two transaction thing. DO NOT DISCUSS trade-in until you've both agreed on the purchase price of the new vehicle.​

3b) Negotiate based on the lowest know price you could get this from somewhere else, and work up from there. Know ahead of time what "premium" you're willing to pay to buy from this dealer versus another dealer. Do not go over this number - walk if they will not budge.​

3c) Once - and only IF - you've both agreed to the purchase price of the new vehicle, repeat this process with the trade. You already know what CarMax, etc., will offer, so start there (or ideally higher). Know what premium you're willing to let your current ride go for (hey, sometimes there's something to be said for the convenience of not driving all over town), but DO NOT let it go for less than what you predetermined. Worst case scenario you tell them "Thanks. I like the agreed upon price for X, but I cannot accept any less for my trade. I will go to CarMax and sell my vehicle and be back once I've completed that".​

​

That's the way I've always approached it, and it's been a LONG time since I paid anyway close to MSRP and settled for anything less than KBB prices for my old vehicle.

 

[Klutch]

"Invoice" is whatever a dealer wants it to be. A dealer could sell you a truck at MSRP and claim they sold it to you at Invoice. "See, here's the factory invoice and there's the price."

Much of the time a dealer will use dealer cost as invoice price. Just be aware that isn't always the case.

 

[Fawkes]

FWIW (and you may know this), but I'd approach it this way:



1) Determine the value of your current vehicle. Get quotes from CarMax, vroom, Carvana, etc.

2) Determine the price you're willing to pay for your new vehicle.

2a) If you're up for traveling then this is a known cost (search for dealers like Gupton), otherwise....​

2b) Do a search in your area for what other dealers are selling vehicles for. ALWAYS tell them that you're not sure if you are trading in a vehicle - they will want to play shell games otherwise.​

3) Once you have a sell-price for your vehicle, and a target buy price based on what OTHER dealers are selling for, go to your preferred dealer.

3a) Again, approach this as a two transaction thing. DO NOT DISCUSS trade-in until you've both agreed on the purchase price of the new vehicle.​

3b) Negotiate based on the lowest know price you could get this from somewhere else, and work up from there. Know ahead of time what "premium" you're willing to pay to buy from this dealer versus another dealer. Do not go over this number - walk if they will not budge.​

3c) Once - and only IF - you've both agreed to the purchase price of the new vehicle, repeat this process with the trade. You already know what CarMax, etc., will offer, so start there (or ideally higher). Know what premium you're willing to let your current ride go for (hey, sometimes there's something to be said for the convenience of not driving all over town), but DO NOT let it go for less than what you predetermined. Worst case scenario you tell them "Thanks. I like the agreed upon price for X, but I cannot accept any less for my trade. I will go to CarMax and sell my vehicle and be back once I've completed that".​

​

That's the way I've always approached it, and it's been a LONG time since I paid anyway close to MSRP and settled for anything less than KBB prices for my old vehicle.

So let me ask this. There are a few options i really want, (forward-facing camera, trail rail, aux switches). Is it similar if I order a Gladiator?

 

[u-joint]

So let me ask this. There are a few options i really want, (forward-facing camera, trail rail, aux switches). Is it similar if I order a Gladiator?

Absolutely. In fact, the negotiating process is even easier if you're doing a custom order. I say easier because you can compare apples-to-apples, whereas if you're just shopping what's on dealer lots then you're left with differences (e.g. one is in my preferred color, but lacks this package, while this other has that package but also has stuff I don't want, etc).

It's super common for guys to custom order. Check out these threads:

• 2022 Jeep Gladiator (JT) ORDER GUIDE!! [Updated Monthly]
• Gupton Motors up to 8% below invoice
• FYI: Tread Lightly Discount Signup Summary (FCA Program)

That should be enough to get you started on the right path.

 

[ShadowsPapa]

1) Determine the value of your current vehicle. Get quotes from CarMax, vroom, Carvana, etc.

I'd take that another step further.......
For example, those you list really low-balled my Silverado. Even the Jeep dealer was only talking 16,500. I got stupid low offers from one of the online places - 14K and was thinking are you stupid or think I am stupid? Even my dealer offered me more.
So I took my truck to a Chevy dealer and asked if they ever bought used trucks directly..... yes, they do.
And I got more than anyone else offered.
I left them my truck and title, check in my pocket and even got a ride back home from them.

 

[MPMB]

It's a notice of payment due for goods or services, but that's not important right now.

/Airplane! reference

 

[u-joint]

I'd take that another step further.......
For example, those you list really low-balled my Silverado. Even the Jeep dealer was only talking 16,500. I got stupid low offers from one of the online places - 14K and was thinking are you stupid or think I am stupid? Even my dealer offered me more.
So I took my truck to a Chevy dealer and asked if they ever bought used trucks directly..... yes, they do.
And I got more than anyone else offered.
I left them my truck and title, check in my pocket and even got a ride back home from them.

That's a great suggestion. That's actually how I sold my 2008 Wrangler - though it was a Nissan dealer that offered me the most. Either way, check in hand, I wasn't complaining.

 

[dcmdon]

"Invoice" is whatever a dealer wants it to be. A dealer could sell you a truck at MSRP and claim they sold it to you at Invoice. "See, here's the factory invoice and there's the price."

Much of the time a dealer will use dealer cost as invoice price. Just be aware that isn't always the case.

This is incorrect. Invoice price for a base vehicle as well as options are readily available for almost any vehicle. The dealer can't make that up. Any reasonably well researched customer would catch him.

I worked in the car business from age 16 to 25. I started as parts driver and did stints as service writer, service tech, salesman, finance / business mgr.

Invoice is the cost that the dealer actually pays for the vehicle before hold backs and incentives. In some cases hold backs aren't paid as a direct payment but a a credit against one of the several dealer accounts that the dealer has with the manufacturer. Saab (GM) applied hold backs as parts credits for example.

Every dealer has a "floorplan". This is the revolving line of credit used to pay for the cars in inventory. When a dealer gets a car, it goes on the floorplan at invoice. Then when the car is sold and funded, the floorplan gets paid.

 

[Klutch]

This is incorrect. Invoice price for a base vehicle as well as options are readily available for almost any vehicle. The dealer can't make that up. Any reasonably well researched customer would catch him.

I worked in the car business from age 16 to 25. I started as parts driver and did stints as service writer, service tech, salesman, finance / business mgr.

Invoice is the cost that the dealer actually pays for the vehicle before hold backs and incentives. In some cases hold backs aren't paid as a direct payment but a a credit against one of the several dealer accounts that the dealer has with the manufacturer. Saab (GM) applied hold backs as parts credits for example.

Every dealer has a "floorplan". This is the revolving line of credit used to pay for the cars in inventory. When a dealer gets a car, it goes on the floorplan at invoice. Then when the car is sold and funded, the floorplan gets paid.

Where are these "invoices" available? Once upon a time I could order all that information from Consumer Reports, but those are no longer available. I still stand by my statement that a dealer can make "invoice" anything they want it to be. There's no law preventing them from doing it.

 

[u-joint]

Where are these "invoices" available? Once upon a time I could order all that information from Consumer Reports, but those are no longer available. I still stand by my statement that a dealer can make "invoice" anything they want it to be. There's no law preventing them from doing it.

https://www.jeepgladiatorforum.com/...adiator-jt-order-guide-updated-monthly.49791/

 

[JRWFarm]

You've been getting great advice. I would add one more thing to conside; How your state taxes a vehicle purchase or trade. It could have a bearing on whether or not you want to trade or sell your vehicle. For example, here in Kentucky when we trade a vehicle for another one, we pay 6% sales tax on the trade difference and that significantly reduces the tax burden over not trading.

Here, when we buy a new vehicle without trading, we must pay 6% on 90% of the MSRP or whatever the sale price was (ie. Invoice) whichever is least.

Examples: New vehicle = $57,000 Your trade(dealer offer) = $30,000 Difference is $27,000
Tax = 27,000 x .06 = $1620 Cost to trade is $28,620 (trade diff. plus tax)
Total cost of vehicle $30,000(your vehicle value) + $27,000(cash) + $1620(tax) =
$58,620

Not trading example: You sell your vehicle somewhere else and use the money to go
buy a new one.

New vehicle = $57,000 (say this number is less than 90% of MSRP)
Tax = 57,000 x .06 = $3420 Total cost to buy new without trade = $60,420.

In these examples you would need to sell your vehicle for $1800 higher to someone in order to compensate for the extra tax you will pay if you do not trade.

 

[dcmdon]

Go here, enter your zip code, and select a make and model. Invoice price is listed.

https://www.costcoauto.com/new_cars/

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