Understanding What's on an Invoice Form

The invoice form that is usually stuck on a car's window contains much valuable information. Knowing this information will make you a more informed buyer, better able to negotiate a lower price.

Prices

The MSRP (manufacturer's suggested retail price) and the invoice price are listed on an invoice form. The MSRP is a retail selling price suggested by the manufacturer. The invoice price is an approximation of how much the dealership spent to buy the vehicle from the manufacturer.

Charges

Destination charges and advertising charges are typically itemized on an automobile invoice form. These charges are non-negotiable and strictly issued by the manufacturer. The costs of advertising are passed on to the dealership from the manufacturer in the form of advertising charges, which generally amount to 1% to 3% of the car's MSRP. A destination charge is a fee for the transportation and delivery of the vehicle.

Options 

Most cars come in different trims and offer all sorts of available options. The included options, such as upgraded audio, power/heated/leather seats, power windows, sports packages, etc. are listed on a new and used car invoice form. Reviewing the included options can help you determine if the car is worth the asking price.

Holdback

Dealerships incur costs through the nature of their business. These costs result from things such as the display and maintenance of the vehicles and employee commissions. Each vehicle has an amount of money listed for holdback on the invoice that the manufacturer will pay to the dealership once the car is sold. This money helps the dealer recoup some of the costs.

To be armed with the tools to get the best possible price for your vehicle, be sure to understand what's included on an invoice form. Knowing the difference between the MSRP and invoice price, the unchangeable nature of certain charges, the differences in vehicle options, and the function of holdback can go a long way in obtaining a lower price.