Ever wonder if you’re really getting a good price for that vehicle you’re looking to buy? If you know the TMV, or True Market Value, of the vehicle, you can be better informed of the acceptable price for certain vehicles. It’s important to know the TMV of a vehicle before you go into the dealership, so as to determine how best to go about negotiating price:
MSRP (Manufacturer’s Suggested Retail Price) – Also known as the sticker price, the MSRP is how much the manufacturer suggests the dealership should price the vehicle.
Invoice Price – This is how much the dealership actually paid for the vehicle, but don’t be fooled. The actual price the dealer paid is usually much lower than what is listed, since they get factory discounts and incentives they don’t list on the actual invoice.
Don’t pay the amount that is listed on the invoice, because it does not reflect the TMV of the vehicle. The dealership obviously wants to sell you a vehicle at the highest price possible so they can make the most money, so it’s best to do your homework beforehand. In order to know the TMV of a new vehicle:
- Shop around. Take a look at how other dealerships in the area are pricing specific vehicle models. You’ll have some powerful negotiating ammunition if you can show the dealer how easy it would be for you to get the same car for a lower price by going to the dealership down the street.
- Consult the experts. It’s good to know the TMV when negotiating your trade-in too. Check out trusted resources in the auto trading industry such as Kelly Blue Book to get a fair assessment of the depreciated TMV of your used car.
- Ask about additional fees. The dealer may try to get you to pay more to account for any additional fees that they paid when they purchased the vehicle from the manufacturer. During negotiation, make sure you ask the sales rep to take all of that into consideration so you’re not bombarded with extra costs after the deal has been sealed.
Remember, something is only worth what someone is willing to pay for it. So do your homework ahead of time, and make sure you buy your next car without getting taken for a ride.
May 7, 2013 by Jamie Rettig