the invoice price is the automobile manufacturer’s original charge to the dealer. This includes freight, destination or delivery charges. This price may not reflect the dealer's final cost due to rebates, allowances, discounts and incentive awards the dealer may receive.
Create an advantage
To give you the negotiating advantage when buying a new auto, do your research. Find out the invoice price, and try to negotiate a purchase price that's close to the invoice price. Often a buyer will pay $100 to $300 over invoice, and both dealer and buyer will be happy. To negotiate an even better deal, find out if the manufacturer is currently offering any incentives to the dealer. If such incentives exist, you may get the dealer to take more money off the sales price by passing on at least some of the incentive to you. Autos that are in high demand and short supply will probably be sold close to, at or even above the Manufacturer's Suggested Retail Price (MSRP). This is the invoice price plus the cost of add-ons as determined by the dealer.
Have a game plan
Also remember that when you are buying a car and negotiating a price, it is not uncommon for either the buyer or the seller to reject the first offer. That is why it is especially important for you to have a game plan before you agree to a price. Prioritize which features you find essential and which features you find attractive, but would be willing to forgo for the right price. You may find that it takes a few visits to a dealership to get the car you want for the price you want to pay. Also, keep in mind the best time to buy a car, like the end of the year or holiday deals, so that you can get as close to the invoice price as you can. Some experts even recommend waiting until the end of the week or month to buy a car because dealerships are more eager to make their sales quotas. If a salesperson has an incentive for reaching his or her sales goal, there may be a better chance of you paying close to the invoice price for the car.