How to Find Unadvertised Discounts on New Cars
To make money, dealers aim to make as much money as possible on each car sale. However, other factors influence dealer prices and can lead to unbeatable discount prices for new car buyers. Learn how to take advantage of unannounced offers like; factory-to-dealer incentives, dealer overstock liquidation sales, and below-bill sales prices.
MSRP vs. Invoice Price
The MSRP or Manufacturer’s Suggested Retail Price is just that, a suggestion. The invoice price is what dealers pay the manufacturer for a new vehicle. When you buy a new car, you should try to pay less than the MSRP. The closer you get to the invoice price, the better the deal. Paying below because invoice prices will maximize your savings.
Factory-to-Dealer Incentives
Automakers often provide factory incentives to dealers, to entice dealers to sell more of a specific model. Factory-to-dealer incentives allow dealers to pay less than the invoice price for the new vehicle. Dealers are not required to advertise or convey these discounts to consumers. Some may keep the additional profits, while other merchants may be willing to pass on some of the savings to consumers.
If you want to take advantage of factory-to-dealer incentives, you’ll need to negotiate. Since dealer incentives are offered to all dealers within a region, having dealers compete for your business will encourage them to drop your price below dealer cost.
Dealer Overstock Liquidation
Dealers must pay to keep vehicles in stock. If a certain model is overstocked, the dealer will pay more and earn little from sales. Often times, overstocked dealers are willing to sell new vehicles at or below dealer cost just to make room for vehicles in high demand.
The longer a specific vehicle has been on the lot, the more likely the dealer will lower the price. The purchase of outgoing or year-end models is a good time to take advantage of these types of discounts.
Meet sales targets
Both car dealers and salespeople strive to hit monthly sales goals. Meeting targets can mean cash bonuses for the seller or increased factory-to-dealer incentives for the dealer. Either way, it’s an incentive to move inventory.
Buying at the end of the month is a great way to take advantage of dealer struggles to hit target sales. If losing a few thousand on a vehicle means a big bonus, the dealer is likely to take the loss for more profit.