Understanding a Vehicle’s Invoice

When you’re shopping for a new or used vehicle at a dealership, its often that all you have to go on is the dealer’s word and the invoice sticker stuck on the side of the window when figuring out prices. The invoice sticker should be your first choice when it comes to providing inarguable facts about the vehicle and understanding it can make you a much better car buyer.

Prices

There are often two or more prices on the sticker; the Manufacturer’s Suggested Retail Price (MSRP) and what the dealership is charging. The MSRP is what the manufacturer recommends the car goes for. The invoice price is an approximate value paid for the dealer to buy the car, often higher than the MSRP.

Charges

Another important part of the invoice sticker is the “charges” section. This is what the manufacturer has charged the dealer for a variety of different services such as transportation and advertising. These charges are non-refundable and non-negotiable and will add to the price of the vehicle. After all, the dealer will want to recoup these prices in order to make money off the vehicle. These items are listed simply to help explain the dealer’s price more clearly.

Options

And here comes the fun part of the invoice: the options. This is the part that lists all the various items that come with your specific vehicle. Vehicle models come in a variety of trims that come with different features such as heated seats, power windows, powerful audio systems and much more. Read through this list to see the options included on this vehicle and get a better understanding of its price.

Holdback

The last part of the invoice that helps explain the cost of your vehicle is the “holdback” charges section. These items are charged to the price of your vehicle as part of keeping the dealership open as they help to pay business expenses. These expenses include displaying and maintaining the vehicle as well as commissions earned by whoever sells the vehicle. This money is given to the dealer by the manufacturer once the car is sold. Without these holdback charges, dealerships couldn’t stay in business.

April 28, 2013 by Jamie Rettig