What Is Invoice Price? Can You Buy a Car Below It?

You've probably seen the phrase invoice price tossed around in car ads and forum threads. It sounds like a magic number that beats MSRP. But what is invoice price, really, and can you actually buy a car below invoice? Short answer: yes, sometimes. Here's how it works and how to use it to your advantage.

What Invoice Price Actually Means

Invoice price is the amount the manufacturer charges the dealer for a new car. Think of it as the dealer's wholesale cost on paper. It's printed on the official invoice the carmaker sends with each vehicle.

MSRP, on the other hand, is the sticker price you see on the window. The gap between invoice and MSRP is one piece of the dealer's potential profit. On a typical mainstream car, that gap is often a few percent.

Why Dealers Can Sell Below Invoice

Here's the trick most buyers miss. Invoice is not the dealer's true cost. Carmakers send dealers extra money on the back end, and that's why a below-invoice price can still be profitable.

• →Holdback: a percentage of MSRP (often around 2 to 3%) the manufacturer pays the dealer after the sale.
• →Dealer cash: secret incentives from the manufacturer to push slow-moving models.
• →Volume bonuses: large kickbacks when a dealer hits monthly or quarterly sales goals.
• →Floorplan credits: money that offsets the dealer's cost of holding inventory.

Add it up and a dealer can sell at invoice, or even a few hundred below, and still make money. That's why below-invoice deals exist, especially at month end or on outgoing model years.

When Below Invoice Is Realistic

You won't get below invoice on a hot new release with waiting lists. You'll often get it on common sedans, SUVs, and trucks that dealers have plenty of.

• →Shop the last week of the month when sales targets create pressure.
• →Target models that have been on the lot 60 days or longer.
• →Hunt outgoing model years right after the new ones land.
• →Look for active manufacturer rebates and dealer cash on the brand's website.

How to Find the Invoice Price

You can't just walk in and ask. Dealers rarely show the real invoice. But you can get close using public tools.

• →Check Edmunds or KBB for the invoice estimate on your exact trim and options.
• →Compare to the True Market Value or Fair Purchase Price to see what others actually paid.
• →Search forums like Edmunds Town Hall for your model to spot recent deal prices.
• →Ask a few local dealers by email for an out-the-door quote and compare against invoice.

How to Negotiate a Below Invoice Deal

Walking in informed is half the battle. The other half is making dealers compete for your business.

• →Email five to ten dealers within driving distance asking for their best out-the-door price.
• →Tell them you have other quotes and you'll buy this week from whoever wins.
• →Negotiate the selling price first, then talk trade-in and financing separately.
• →Ask specifically about current dealer cash and stackable rebates you might qualify for.
• →Always confirm the doc fee, taxes, and registration in the final number.

What to Do Next

Now that you know what invoice price is, pick the exact car you want and look up its invoice on Edmunds tonight. Email a handful of dealers tomorrow. When the quotes come in, run them through Sign or Walk to see if your deal grades out as a win. A below-invoice price is possible. You just have to ask the right way.