CompetingCarPrices.com Divulges the Truth about How Car Dealers Make Money

Aug. 17, 2010 - PRLog -- New car dealers focus on three main opportunities to make money with every new car sale, according to the expert team CompetingCarPrices.com. First, the front end, earning the difference between the sale price and dealer cost. Second, the back end, selling financing, insurance, warranty coverage and ad-ons. Third, trade-in vehicles, or used car sales.
Surprisingly, a car dealership can make more money from the second two, than the actual sale of the vehicle. Consumers can easily take advantage of their business strategy to save money where it counts - on their new vehicle. Of course the salesperson wants to make the most money out of every opportunity, but they will focus on the most profitable.
So what does this really mean for consumers? CompetingCarPrices.com indicates it can mean the difference between getting a good deal and a great one. Here’s how they break it down.
Ignore the unimportant. It may sound wonderful to pay “below dealer invoice” or get a “excellent trade-in allowance,” but these things really don’t mean much to the consumer. New car shoppers need to concentrate on the key to saving - the price of the vehicle they are shopping for.
This starts with research. When shopping for a new vehicle consumers must learn some basic information before visiting a dealership.
  1. The MSRP and Factory Invoice Price of the vehicle they are interested in. The MSRP is the manufacturer’s suggested retail price; often this will appear as the sticker price. The factory invoice price is the amount manufacturer sells vehicles at to dealerships (not to be confused with dealer cost).
  2The actual Dealer Cost. For new car buyers the dealer cost is a magic number, difficult to uncover but key to getting maximum savings. The dealer cost is the price that the dealership actually pays for the vehicle. This can be lower than the factory invoice price due to dealer hold-back and factory to dealer incentives. Often automakers provide big discounts to dealers aiming to boost sales numbers.
  3. Current discounts offers, both advertised and hidden. Special discounts such as rebates, incentives and lease specials can lower a negotiated price even further. It is important that consumers remember these are added savings and should not be included in the negotiating process.
New car shoppers can quickly find all of this information by visiting CompetingCarPrices.com.
Once the consumer is armed with complete pricing and discount information, it is time to start negotiating. CompetingCarPrices.com offers some unique advice that will save consumers both time and money.
  1. Contact multiple local dealerships. By requesting offers from more than one dealership the consumer increases his chances to find the lowest price currently offered in their area.
  2. Negotiate via email. Staying in their comfort zone allows new car shoppers to maintain control over the negotiating process. Negotiating via email allows consumers to think through each offer and respond at their convenience.
  3. Make dealers compete. Consumers are recommended to share competing offers with dealers. Often a dealership will lower their price if it means making a sale, especially since this is not where they will make their money.
To find out more on how dealers work and where to get the lowest new car offer, visit CompetingCarPrices.com

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Finds the lowest possible new car prices at local dealers with CompetingCarPrices. Compare new car prices and learn how to negotiate the lowest new car invoice prices.