You usually can't walk up to the car factory and buy a car as it rolls off the line at a discount price. You can, however, find out what your dealer pays for the car and get it for that price. The dealer's wholesale price for the car is called an "invoice" price, and it's publicly available. If you know the price, and the dealer doesn't have any option, you can negotiate for it. Ultimately, you're going to have to do some research, shop around and negotiate if you want to get a car at a wholesale price, but it'll be worth it.
Step 1
Select a car that a dealer would be willing to sell for wholesale price. If you're looking to buy the hottest new car on the market, and every dealer in town is selling it for thousands of dollars above the sticker price, you're probably not going to be able to negotiate very effectively on it.
Step 2
Research any incentives or rebates that are available. These give your dealer more room to discount the car. For instance, if a car has a $30,000 sticker price and a $28,000 wholesale invoice price, but also has a $3,000 dealer incentive, the dealer's true cost is something less than $25,000. Don't worry about pocketing all of the incentives. If a dealer sells you the car at the wholesale invoice price and gives you all of the incentives, it's still going to make a profit. Most manufacturers pay a certain percentage of the price of the car to their dealers after the car sells. This extra payment is called a "holdback."
Step 3
Contact the fleet or Internet departments of multiple dealers and ask them for their best cash price on the car of your choice. Some dealers are incentivized to sell cars through those departments and may have additional discounts available. In addition, fleet and Internet departments are usually geared to turn cars over at higher volume, but at lower profits.
Step 4
Check back with the dealer that quotes the lowest price and let it know that you are shopping around. Once you've let it know it's in the running, ask if it has any more negotiating room in the price to beat its competition. Once it gives you its final price, which might be even lower, ask it to send you a copy of the invoice so that you can compare the price it quotes with the wholesale price on the invoice. If its price matches the invoice or is lower, buy the car.
Step 5
Wait until the end of the model year approaches if you still can't get the price you want. While end-of-year deals aren't always as good as they used to be, you're still more likely to be able to get a wholesale price at the end of the year than at the beginning. This strategy works best when you plan to keep the car for a while, though.
References
Resources
Tips
- Some European luxury car brands offer a European Delivery program that allows you to pick up the car at the factory overseas, drive it around Europe and have it shipped to your dealer. In many cases, the program also includes a discount on the car, in addition to whatever you can negotiate with your dealer, although you'll usually have to get yourself to Europe. If you're going to Europe anyway, you could end up with a below-wholesale price on your car.
- While promotional financing, such as zero percent for 60 months, may be tempting, it sometimes comes at the cost of losing access to cash incentives. If you're focused on getting a wholesale price, use your own financing so that you can get the biggest discount from your dealer.
Writer Bio
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.