| As you've been out looking at a new car to buy, I'm | | | | the situation. So as you shop around you may be quite |
| sure you've noticed quite a lot of information on the | | | | able to cash in on some of the use dealer incentives |
| window sticker of the car. | | | | that are out there. |
| One of the dollar amounts that you no doubt ran | | | | There are also advertising allowances that can be |
| across was a shipping charge. There is a shipping | | | | figured into the price of the car, but these advertising |
| charge from the manufacturer that is added to the | | | | allowances are usually for legitimate advertising |
| price of each new car. This shipping charge is not | | | | expenses and not necessarily open for negotiation. |
| figured into the holdback amount of the car, but it is | | | | Having said that however, there are times when a |
| figured into the MSRP on the window sticker. | | | | dealer may use this money if it means putting a deal |
| The shipping charge is going to depend upon the | | | | together and keeping you from going across the |
| manufacturer and the type of vehicle. You will | | | | street to another dealership. |
| generally see the shipping or destination charge just | | | | If all of this seems somewhat confusing, don't feel |
| above the total MSRP number. | | | | alone because it is. |
| Keep in mind that shipping charges by the | | | | Let me give you an example... when dealers |
| manufacturer are not a means of profit for the dealer. | | | | determined their cost on the vehicle they will start at |
| It is a very real cost that the dealer pays the | | | | their invoice price. But that's only the starting point. But |
| manufacturer for shipping that vehicle. | | | | for the sake of our example invoice price would be |
| There are however other factors such as dealer cash | | | | known as net price. From the net price they would |
| that do go into the final price of the car. Dealer cash | | | | then subtract whatever holdback there is on the car. |
| allowances are simply a tool used by the | | | | This is then known as net, net price. |
| manufacturer that they give to a dealership in order to | | | | But wait... it gets better. |
| help them move their inventory and stay competitive. | | | | From net, net price the dealer can then subtract out |
| This type of incentive is generally used on and the | | | | any dealer cash or marketing allowances that they |
| model year cars, or cars that for whatever reason are | | | | may have. I know this is some really fuzzy type of |
| becoming aged and aren't selling well. So, when the | | | | math and the actual numbers will vary depending upon |
| manufacturer takes note of a particular dealership's | | | | how the dealer defines their cost. But essentially we've |
| inventory and sees cars that are moving they may | | | | gotten to net, net, net price... otherwise known in the |
| very well offer the dealer some various forms of | | | | business as the dead cost of a new vehicle. |
| dealer cash incentives in order to move these units. | | | | The moral of the story is for you to know that what |
| The amounts of these dealer cash incentives for car | | | | may seem like an invoice price really isn't what the |
| buyers is going to vary anywhere from $100 to | | | | dealer actually did or is going to pay for that particular |
| thousands of dollars depending upon the inventory and | | | | car. |