The dealer invoice is a document that lists the dealer cost and suggested retail price of a new vehicle offered for sale. In addition to providing detailed pricing information, the invoice also includes information on the options and packages installed on a new car or truck. The pricing information displayed on dealer invoices is relevant only when purchasing a new car. However, the other information provided on options and packages is relevant for new and used car buyers.
Basic Vehicle Information
Dealer invoices display basic information about each new car offered for sale. Information including the make, model and trim level is found at the top of the invoice. Additional option codes that identify the exterior and interior colors of the vehicle are also printed on the invoice. All invoices also display the vehicle identification number, or VIN, prominently near the top of the invoice. Other basic information, such as the dealership who ordered the vehicle, can help consumers identify whether the car or truck in question has been swapped between dealers.
Factory Wholesale Pricing
Below the basic vehicle information, the dealer invoice shows each option installed on the vehicle. These options can include packages, including power groups that add power windows, mirrors and locks, or standalone options, such as an upgraded radio or navigation system. Listed next to each option is the factory wholesale price, which is commonly referred to as the invoice price. This amount is equal to the amount paid for the vehicle by the dealership.
Suggested Retail Price
In a second column next to the invoice price is the manufacturer's suggested retail price for each feature on the vehicle. This amount, known as the MSRP, equals the MSRP amounts shown on the vehicle's window sticker. The suggested retail price constituges the entire amount of markup that a dealership can play with when negotiating with a consumer. The dealer markup on a new vehicle is much lower than many consumers expect, with margins starting below 10 percent before starting negotiations.
Holdback And Other Considerations
The dealer invoice may also have a line titled "Holdback" or "HB," which refers to an amount of money that is held back by the manufacturer until the point when a car or truck is sold. Although this is often referred to as "hidden profit," it is given to dealerships to help them offset the normal expenses of selling a vehicle. Such expenses include sales commissions and the cost of cleaning and maintaining the inventory. Employee pricing, often used by American manufacturers, is also printed on dealer invoices, as manufacturers require employee purchasers to verify the price listed on the invoice.
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