How to Understand Auto Invoice Prices

Many car buyers believe that an auto invoice price represents the exact amount that a dealership pays to the factory for a particular vehicle. This is not true; the invoice does show the basic cost of the car and its options and breaks down some other items like the destination charge, but several other factors influence the true cost. You must understand auto invoice prices and what they really mean if you want to get the best possible deal on your next new car.

Instructions

1

Get a copy of the invoice for the particular auto or autos you are considering. Some dealers will provide a copy if you ask for it and they believe you are a serious buyer, because they know the information is readily available online. Otherwise you can get the information for free from vehicle-research sites such as cars.com, invoicedealers.com or edmunds.com.

2

Add up the base price of the car, including any equipment packages and individual options. Add in the destination charge, which covers the cost of transportation from the factory to the dealer's location. This is a legitimate expense that is figured into the price to be paid by the car buyer, according to Tony Iorio of insidercarsecrets.com.

3

Subtract the holdback and dealer flooring assistance if they are shown on the invoice. Those amounts are paid to the dealer from the factory, according to carbuyingtips.com, so they reduce the auto's true cost. You can find out if there is a holdback on the auto, even if it is not shown on the invoice, by looking at a vehicle research website. It will most likely be a set percentage of the invoice cost or manufacturer's suggestion retail price (MSRP), edmunds.com explains.