Once you have picked the car you want, it’s time to get serious about price. Thankfully, today’s car buyer has the internet to help with the process. To assist you in determining the best price you should settle on for your new car, here are several concepts terms and concepts to consider:
The MSRP (Manufacturer’s Suggested Retail Price) is a “suggested” price set by the manufacturer. By law, this price is displayed on every vehicle sold in the United States. Does anyone actually pay MSRP? Not often but it can occur and in some instances, where demand is higher than supply, customers have been known to pay above the MRSP. For instance, when the Chrysler PT Cruiser was first available, they demanded prices well above MSRP.
The dealer invoice is the dealer’s cost for the vehicle only and doesn’t include any of the dealer’s costs for advertising, sales, prepping, displaying or financing the vehicle. Knowing the dealer invoice price can be ahelpful bargaining tool but it does not always tell the entire story. Behind the scenes are usually manufacturer’s incentives and “holdbacks” that could actually reduce the price below invoice.
Average Dealer Markup
The average dealer mark-up is what the dealer is asking for the cat up and above their invoice price. On most vehicles it is less than 10 percent. Compare this margin to other industries and you’ll find it to be quite low. The truth is, contrary to popular opinion, dealers actually don’t make a lot of money on new cars. Dealers make most of their money on parts and service and by selling used cars.
Fair Purchase Price
Updated weekly, the Fair Purchase Price (FPP) is the industry’s newest, most reliable vehicle pricing tool. Based on specific make and model vehicles, FPP pricing reports show you a new car’s average selling price, it’s typical range of selling prices, and any applicable market conditions. It is important to know that the FPP is not a number influenced by dealers or manufacturers — it is actual transaction data.The Fair Purchase Price has become a very popular tool for those researching pricing.
When calculating the price you will pay for your next car, you must include the value of the options desired. Thankfully, the trend is now to bundle the options together into packages. This makes pricing those vehicles much easier. For example, the Honda Civic comes in three separate packages, the DX, LX and EX. If you are still trying to discover the total price of a car with accessories included, the most efficient way is to “build a car online”. This popular tool will automatically add the cost of each option available and give you a new total cost reflecting the additional added costs.
Looking for a Deal?
For the true bargain-hunter, here are some helpful car-buying tips that might position you to get the deal you want:
- Buy a model late in the year before the body-style change
- Buy an overstocked or mass-market vehicle with a customer cash incentive — incentives are typically higher in the summer and winter months
- Buy around the last day of the month -dealers often have monthly sales quotas
- Buy at the end of the year — some dealers will clear out inventory for tax reasons
So, before you visit your local dealer, research the pricing categories we discussed above. In particular, be sure and know what the Fair Purchase Price is for your vehicle. A reputable dealer will work with you and try their best to convert you into a loyal return customer. Today, you don’t have to arrive at the dealership like Covertchryslerdodgejeepram.com loaded for bear, all you need is some very basic information such as what we illustrated above.
Source: Covert Chrysler Dodge Jeep Ram