Despite the insistence of some dealers, the simple answer to that question is one huge NO. You may have heard of dealers offering a car for just one dollar above invoice, and in some cases even below invoice price. While the dealer may be a nice guy (yes most of them are nice) they are not running a charity. They are in the business to make money, and they are making money even if they are selling a car below invoice. So what is the true dealer’s cost?

The dealer’s actually cost is the invoice cost minus holdback and any factory to dealer incentives. In some cases this can be thousands of dollars. How does this work? Let’s say you buy a printer from a computer company, and that company charges $100 for that printer. The printer also comes with a mail in rebate of $40, so in actuality you are only paying $60 and not $100 for that printer. If you were to resale that printer for $80 then you would be making $20 profit and not $20 loss.

Now, let’s use a real life example. Let’s say the dealer has a corolla on his lot that has invoice price of 14,500. It has factory to dealer incentive of $900 and dealer holdback of $450. If that dealer was to sell that car to you at invoice price then he or she is still making a profit of 1,350. In most cases, the dealer is happy to make this amount of profit, and in some cases the dealer is satisfied to take even less.

You should know that in most cases the dealer is very reluctant to let you know the true price of the car. You, however, can get this information on the web at many of the car quotes sites out there. Remember, the car buyer that gets the best deal is the one that is best informed. So if you do your research, and you are able to obtain the dealer’s cost you will have much more bargaining power in the negations for a new car.