HOW MUCH DO NEW CAR DEALERS PAY for CARS, TRUCKS, SUV's? 2022 MSRP: The Homework Guy Kevin Hunter

do you know what dealers really pay for new cars because every manufacturer does it a little differently it's quite the financial mouse maze but today you're going to learn how to navigate through it hi I'm Kevin hunter on this video and no matter where you're starting from knowledge wise you're going to have a better idea how much a car dealership really pays for their new cars trucks and SUVs they have an inventory if you still have questions after all of this we left an open box for you right down here in the comments section well go ahead and use it you'll get feedback from other buyers and I check back often as well if you're visiting here for the first time I think you'll find value in subscribing to the channel and sharing it with your friends on social media and if you want to email a personal question or you want me to look over a car contract for you send it to me at info at the homework guy comm just block out any confidential information like your home address social security numbers things like that you should approach all of this information with the awareness that not everyone is out to get you in the car business you'll find people who would discuss this stuff just as openly and honestly as I do here on my channel you just have to ask but be aware that some dealers will automatically fire people for helping you too much so not every member of a sales staff even if they really wanted to can help you without first finding a private place to do it alright let's get started today I'm gonna cover Monroe new sticker also known as window sticker dealer invoice holdback addendums manufacturer rebates Auto Show rebates which are basically the same as manufacturing base but deserve their own category dealer cash coupons and finally month and bogies from the manufacturer to the dealership nobody can tell you what dealer cost is right down to the penny you have to know exactly what the invoice is you must know what holdback will be paid you must see month and bonuses from the manufacturer and you must know about any other incentives like dealer cash targeted promotions etc as they apply to the specific vehicle you're looking at today that's constantly a moving target quite often even the dealer owner doesn't have quite the exact math without talking to members of his staff and even that will get a only closed that's exactly what I'm gonna do here today help you figure out how to get closed let's start with the well-known Munroe NYSE ticker also known as the window sticker or MSRP manufactured suggested retail price this is the recommended selling price that automakers give a new car everything starts with this number but while a dealer uses MSRP and their pricing methods it's not to be confused with invoice price on a car there can be a lot of money difference between invoice and MSRP so if you're about to start negotiating don't waste your time by starting off from MSRP when you make this mistake the dealer has you behind the eight-ball number two dealer invoice invoice price sometimes referred to as dealer cost is the price that appears on the invoice that the manufacturer sends to the dealer when they receive a car from the factory invoice prices the mount commonly quoted to customers as the actual price the dealer pays to the manufacturer but if that were true we could end the video right here a few things to be aware of the dealer invoice usually includes a fee known as a destination charge but sometimes it does not so look closely if a destination charge is on the invoice you shouldn't be seeing a destination charge on your car contract this is called the double dip which some dealers do get away with and do it often don't get stuck paying for it twice how can you make sure that you're getting the actual invoice well there's definitely fakes out there you're gonna have to ask multiple dealers for an invoice on similar cars just make sure the equipment and trim levels are the same multiple copies allow you to compare others and you'll figure out quickly who's being dishonest and who isn't actually giving you the real invoice you'll know it because the honest ones will give you the invoices with the lowest cost dealers never cheat by giving you a number lower than cost number three hold back hold back is well known by a number of car buyers interestingly the primary purpose of hold back is that it allows invisible dealer profits and the manufacturer is the one who started it you can't blame dealers for this dealer hold back is an amount that auto manufacturers provide to auto dealers for each new vehicle that is sold it's usually two to three percent of the invoice price or the manufacturer's suggested retail price or P some car buyers tried to use dealer holdback to calculate the net price of a vehicle to the dealer with the intention of using that amount as a basis for negotiating a rock-bottom price however determining the dealer's actual net cost is difficult even for seasoned automotive insiders like me you can try visiting sites like edmunds.com and find true market value that's tmv this is an average of what other people are paying for a car in a given area as I suggested earlier you should also shop the same vehicle with multiple dealers ask each one for the invoice some will give you the real one others will give you a fabricated one ask them the highlight to hold back on the invoice some will give it to you others won't but if you do the homework you'll find out what it is why is there hold back in the first place dealers get four benefits a dealers can borrow money to finance cars based on the invoiced amount that includes the hold back so the higher the invoice amount the more the dealership can borrow from its lender its own banker interestingly hold back is allowing the dealers to fudge cost numbers to their own bank borrowing more than cost be inflating the dealerships cost with holdback can have the appearance of less profit and since sales personnel are paid Commission's based on the gross profit of each sale the holdback has the effect of lowering gross profit and the sales commission is lower - do you see any irony here holdback allows the dealer to cheat its own employees out of sales commissions see holdback enables dealerships to advertise invoice price sales and sell their vehicles at or near invoice and still make money on the transaction and d lastly holdback allows the dealer to lead their customers to believe that they've hit rock-bottom price when in fact they haven't manufacturers are the ones who started the entire cat and mouse game with holdback so don't blame the dealers for this number for addendums the addendum or dealer added sticker is a dealership created sticker that contains various high profit and overpriced accessories or products to add profits to the vehicle an addendum sticker is conveniently placed next to the large MSRP sticker to make it look like the manufacturer put it there the hope of the dealer is that you won't ask questions about it you can learn about it at Auto cheatsheet calm the link is on the screen it's just a fabricated window sticker designed to look like the MSRP sticker as I said but if you aren't aware of what the addendum sticker is you could wind up paying for products you hadn't planned on purchasing number five rebates well you need to know what the rebates are in your vehicle you should never be negotiating with rebates involved rebates come directly from the manufacturer so they should not be thought of as a gift from the dealer rebates pass through the dealer to the consumer and they are easy to find with a little research or just by asking it's one of the things that dealers love to tell you about since a lot of buyers these days are fascinated with discounts number six Auto Show rebates Auto Show rebates are also manufacturing baits but I give them their own category for a specific reason they're only available for a short period of time and generally only during and right after the local Auto Show if you happen to live anywhere near a major metro area look up the event schedules if you see a car show find out if the manufacturer of the vehicle you are interested in will be participating if they are they often run Auto Show rebates to help draw customers out to the dealers it's a short promotion period so you need to have all your homework done beforehand so you can act fast when the time comes a side note I love going to the auto shows because they are great place to shop and a great place to learn about new cars on the market and there's no pressure cuz nobody can sell you a car there you'll get the kind of tour of a vehicle you had hoped for number seven dealer cash this money has one purpose move metal off the lot dealer cash can also come into play at the end of the model year when both the dealership and the manufacturer want to clear out current models to make way for the new incoming vehicles dealer cash is rarely advertised number eight coupons this is targeted marketing directly from the manufacturer if you are a repeat customer of a given brand you could receive a $500 coupon directly from the manufacturer and it is legitimate again you don't bring this up until you've negotiated your car price this is your bonus discount directly from the manufacturer you get to add it on at the end number nine bogus on the also known as bonuses for the dealer hitting given monthly sales levels the dealer hits these monthly bonuses all the time but you're unlikely to ever find out how much it is if you're talking to a dealer close to month end or your end and you're wondering why there's so much more willing to negotiate with you now rather than another time well they have a monthly goal they're trying to hit and your deal might just be that deal that puts them over the top qualifying for a big fat bonus from the manufacturer industry slang for this is a bogey but it's just what I've described the month end or you're in bonus all right so here's the bottom line you wanted to know what any dealer really pays for the new car they have sitting on their lot I gave you all the terms and things to look for if you have an eye on a specific vehicle disregard the NS RP start with invoice price minus the holdback less any rebates less any coupons and that is the lowest price you are ever likely to buy a new car the only lower price is a vehicle that also Nets the dealer a bogie and you're only gonna find out about that at the last few days of the month or the end of the year and suddenly you have a hungry dealer who wants to negotiate there's one more thing that you should know but it's completely unrelated to price it does impact how much a dealer is going to work with you however I'm referring to the impact that a number of units sold that the dealership has on the type and quantity of vehicles they're able to order from the manufacturer in upcoming months you see if they don't move a given number of vehicles they move down the pecking order for who gets first dibs on each vehicles coming out from their region from the manufacturer having a slow month could mean limited inventory choices in months to come if you are car shopping on the last few days of the month and you have your options open just ask the dealer if they have any particular units they're interested in moving don't be surprised if you find a vehicle they really want to go this is one of those rare cases where you get the deal of a lifetime all because you were at the right place at the right time and you knew how to ask the right questions I hope you can use all this information to your advantage and go out and get a fair car deal I encourage you to shoot for fairness because dealers do need to make a profit to stay in business if you appreciated the help that I gave you here today there's a few ways you can say thanks click like or leave me a comment you can also share this video with your family and friends subscribe to the channel if you're new here for those of you who wish to leave a tip I put a link in the description box down below but don't hurt yourself a dollar or two says a huge thank you and for those of you who have left tips you're going to be excited to see how we're gonna use that money you're going to see us helping car buyers on lots all around the country all on our dime and as an added bonus we'll be contributing to the down payment on their car how cool is that I'm looking forward to connecting with you in your city someday down the road if you need to reach me again visit my website the homework guide calm and you'll find contact information there well now it's time for me to get back to the best part of my day I have three little munchkins who need their daddy to play with them I'm Kevin hunter until next time take care [Music]

Channel: Kevin Hunter The Homework Guy

Views: 1,228,889

Keywords: Car prices, Car prices set record highs, used car dealerships near me, car loan calculator, Auto sales, Used cars, Car, Cars, Car dealers, Automotive news, Car news, Automotive, Vehicle tax, Vehicle fees by state, Auto Shop, Car parts, Auto market, car dealer finance office, rebates for new cars, car loan scam, dealer rip offs, market watch out for this financing scam, what to do when a dealer lied to you, illegal things car dealers do, what to do if a dealership rips you off

Id: queF8TWSAdQ

Length: 12min 24sec (744 seconds)

Published: Sun Mar 15 2020