QUESTION: Could you please explain the difference between List Price, Sticker Price and Dealer Price?

August 26, 2005

Hello Tony

Could you please explain the difference between the following: List Price, Sticker Price and Dealer Price?

Thank you,

Stacy

PS: If I could pay for car at point of purchase does this benefit me, or is financing a small amount of purchase price any advantage at bargaining for best deal?

Answer:

Hi Stacy,

List Price, Retail Price and Sticker Price are all the same thing - the amount of the window sticker on a new car or truck.

Dealer Price is the dealer's cost which is also called the Invoice Price. This is what the car dealer actually pays for the car.

Actually, that's not entirely true! The dealer pays Invoice Price less the Dealer Holdback. Holdback is an amount the manufacturer pays the dealer on each new vehicle to help offset the finance charges car dealers are charged for keeping the new vehicles in their inventory. Some people think the car dealer should give up part or all of the Holdback when negotiating a car deal. 99% of them won't give up any of it, nor should they. This money is there to help the dealer cover the expense of financing their inventory.

So, when you negotiate a new vehicle price you will most likely pay somewhere between Sticker Price and Invoice Price.

To answer your second question . . . there is absolutely no benefit to you for financing a portion of the vehicle price - at least as far as getting a better price is concerned. Arranging car financing with the dealer is a definite benefit to THEM not to you, because they make extra money when you let them arrange your financing. And I might add . . . extra money that you pay in the form of a higher interest rate!

Don't let the salesman tell you that you can get a better price if you finance with them. It's all crap!

All my very best . . .

Tony Iorio