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Price Terminologies in Buying Used Cars
There are several terminologies one should, at least, have an idea of when buying used cars. This shows the dealer you understand his game and enables you to stack the cards in your favor. While some of these phrases are only applicable to new cars, most can be used to both new and used cars. Learn these phrases and drop them confidently in a conversation with your car dealer.
The sticker price is the price the manufacturer sets for the retail value of the car. This is called the sticker price because, traditionally, it has been written on a piece of paper sticking out of the car window. The sticker price is attached by the manufacturer to the car when the vehicle leaves the factory. Be careful of the sticker price. Dealers sometimes point to the sticker price and assert that this is the sale price.
The invoice price is what the dealer pays the manufacturer for the right to sell the vehicle. Knowing what the invoice price is will help you in getting a good bargain. Obviously, the dealer wants to profit. This is the reason why they got into the car dealership business. Hence, you would want to negotiate for a price somewhere between the car sticker price and the invoice price.
Negotiating a sale price between the car sticker price and the invoice price is known in the car dealership negotiation world as the zone of possible agreement. How does one uncover the invoice price? Your best source of information is the Internet. Many used car dealers in Indianapolis, or any state for that matter, list their invoice prices in car buying sites.
The dealer holdback price is the amount the dealer receives from the manufacturer for every vehicle sold. The dealer holdback price is normally set to around three percent of the sticker price. The dealer holdback price is important to remember because this price effectively adds profit for used car dealers in indianapolis. If you were persuasive enough to obtain a sale price close to the invoice price, the dealer would still be making profit.
There are also some used car dealers in Indianapolis that will offer incentives in the form of “hidden” cash rebates. This is known as dealer cash. Its purpose is to either promote new car makes and models or for selling older ones. Now that you’re familiar with these terms, be sure to use them when buying new or used cars.
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Tags: Automotive : Industry
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