When you are sitting at the dealership talking with the finance officer, you may be quite confused over the different terms you are hearing. Instead of just agreeing with everything that is said, you should learn what terms are going to be mentioned before you sign that dotted line. The most common and most important terms you will hear include:
Invoice price – The invoice price is the amount the car dealer will pay the manufacturer for the vehicle. The difference between this price and the MSRP (Manufacturer's suggested retail price) will be the profit the dealership will obtain for selling the vehicle. In most cases, this is the amount you can change if you do not want to pay that much for the vehicle. In many cases, the MSRP is also higher than the actual cost by up to $300.
Sticker price – The sticker price is the price presented to the public for a vehicle. You will see this on the windshield and is nothing more than the MSRP. You will find that some dealers will only sell vehicles for the sticker price according to the manufacturer such as Saturn that has a policy to sell their vehicles for sticker price. In most cases, you can always purchase for less that the sticker price.
Rebate – a rebate is an incentive given to consumers to purchase a particular vehicle often given by the manufacturer or the dealership. The rebate will take a specific amount off the cost of the vehicle or in some cases may provide better financing. Rebates are normally seen with vehicles that are slow to sell and the dealership will offer a rebate for the surplus often just these vehicles only, normally at the end of the year.
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