GMC 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 GMC price guides strip these hidden dealer profits out and illustrate the MSRP, the invoice price, Holdback and the true dealer cost. (See price definitions below.)
Why You Should Know the True Dealer Cost...
Knowing the dealer cost of a new GMC 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.
GMC Price Terms & Definitions
You've been car shopping before. Sure, it was a neat experience, but it wasn't an enjoyable one. With all of the hype and confusion that initially comes with going from lot to lot, it doesn't make it any better when salesmen are throwing big words and long terms in your direction; of course, instead of facing a little embarrassment, you nod your head and attempt to look up the words while their talking. Never let that happen again. Below you will find everything you need to know to make your next car shopping experience an enjoyable and exciting one. You need to know:
MSRP simply stands for: the manufacturer suggested retail price. This represents the manufacturer's recommended selling price for a vehicle.
Dealer Invoice Price
While it does not always mean the cost of the car that the dealer pays, the dealer invoice price is what the dealer pays that manufacturer for a car.
Regional Advertising Fees
Regional advertising fees is the appropriate cost of business that the dealer pays for the advertising and promoting that the manufacturer does in the dealer’s region.
Dealer incentives are ways in which dealer's have an opportunity to reduce the true cost of buying a vehicle from its manufacturer.
Dealer holdback is a little more complicated. It is essentially a fee passed on to the consumer that the car dealership is paid by the manufacturer.
Manufacturer Incentives and Rebates
Manufacturer incentives and rebates are relationship oriented programs between the dealer and manufacturer established to raise sales and reduce any excess in inventory
Put simply, a destination fee is the amount of money that manufacturers charge dealers in order to get their vehicle to the dealer's car lot or place of sale.
True Deal Cost - The actual price GMC dealers pay for their new vehicles. Here is how it is calculated:
Formula for Calculating Dealer Cost of a New GMC:
- Base GMC 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 GMC 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 New Car Rebates and Incentives.)