Chrysler Prices: MSRP vs Factory Invoice vs True Dealer Cost
The Dealer Invoice Price has hidden mark up such as holdback and other fees built into the price.
The following Chrysler price guides strip these hidden dealer profits out and illustrate the MSRP, the invoice price, Holdback and the true dealer cost. (See Chrysler price definitions below.)
Why You Should Know the True Dealer Cost...
Knowing the dealer cost gives you needed leverage when it comes time to negotiate a great price. Negotiating from the cost up and not the MSRP down can save you thousands on your next purchase.
Chrysler Price Terms & Definitions
Buying a new car should be exciting. You've worked hard and lived through the frustrations that your old vehicle brought you, so you at least deserve a proper car shopping experience. While most salesmen try to accommodate you as best they can, many don't realize that you're not familiar with car pricing terms. Below you will find the definitions to many of the words and phrases you may hear when shopping for your next car.
MSRP, also known as Manufacturer Suggested Retail Price, is the selling price that is recommended for a product by its manufacturer.
Dealer Invoice Price
Initially, the dealer invoice is the price that the car dealership has to pay the manufacturer in order to get the car.
Dealer holdback supplements the car dealer's cash flow and is actually money that the manufacturer pays the dealer.
Manufacturer Incentives and Rebates
Manufacturer incentives and rebates are simply programs that are offered to car dealer's in the efforts of increases sales or reducing an excess in inventory.
This one is pretty simple. The destination fee is the amount of money manufacturers charge dealerships to deliver the vehicle from their factory to the car lot.
Dealer incentives are made between the manufacturer and dealer with the intentions of reducing the dealer's ultimate cost to buy the vehicle from the manufacturer.
Regional ad Fees
These days, advertising is what sells. Regional ad fees are a reasonable charge that the dealer pays for all of the advertising and promoting that the manufacturer does in the dealer’s area or sales location.
Shopping for a new car can be a bit frustrating if you don't know the basic vocabulary. Never miss a term again with this cheat sheet!
True Deal Cost - The actual price Chrysler dealers pay for their new vehicles. Here is how it is calculated:
Formula for Calculating Dealer Cost of a New Chrysler:
- Base Chrysler Invoice Price + the dealer Invoice price of Options + Destination - Holdback = Total Dealer Cost.
- What is Dealer Holdback? A hidden amount that manufacturers give back to a dealer. It is a percentage of the MSRP or the Invoice price. The holdback for Chrysler is 3% of the Total MSRP. (See the New Car Dealer Cost Example.)
Total Dealer Cost (calculated above) + Taxes / Licensing Fees - Rebate / Incentive = True Cost (See Chrysler Rebates and Incentives.)