Kia 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 Kia 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 Kia 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.
Kia Price Terms & Definitions
When a customer walks into a car dealership, there are numerous pricing terms thrown around by the salesmen. It is important to know exactly what each of these terms means, so that the customer is better able to understand and negotiate the price of the car. Below is a list of commonly used terms with their meanings:
MSRP stands for Manufacturer Suggested Retail Price. This is the list price that the manufacturer recommends selling at. Oftentimes in dealerships, the MSRP is the starting point from where negotiations begin.
Dealer Invoice Pricing: Dealer invoice is the price the dealer pays to the manufacturer for the car. This includes the factory price and any optional features the dealer might have chosen to add on. However, this is not always the true cost to the dealer, since it doesn't include the dealer Rebates and Holdback (explained below).
Dealer Holdback: The Holdback amount is the amount reimbursed to the dealer by the manufacturer to help dealers lower their financing costs. It also enables the dealers to borrow more money from lenders by showing an invoice with a higher amount.
Dealer Incentives are incentives offered by the manufacturers to region-specific dealers to help generate sales. These incentives aren't always passed on to customers automatically though.
Regional Advertising Fees are costs incurred by the dealers for advertising and promoting their dealership. Since they are part of the dealer's costs, they are not usually negotiable.
Destination Fees: Destination Fees are usually a fixed amount charged by manufacturers to deliver a car from the factory to the dealership. A Destination Fee can run into several hundred dollars per car, and are usually non-negotiable for the customer.
Manufacturer Incentives and Rebates: Manufacturer incentives are those offered directly to the customer by the manufacturer. Manufacturer Incentives and Rebates are intended to generate additional sales, and are often advertised publicly.
True Deal Cost - The actual price Kia dealers pay for their new vehicles. Here is how it is calculated:
Formula for Calculating Dealer Cost of a New Kia:
- Base Kia 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 Kia is 3% of the Base Invoice. (See the New Car Dealer Cost Example.)
Total Dealer Cost (calculated above) + Taxes / Licensing Fees - Rebate / Incentive = True Cost (See Kia Rebates and Incentives.)