How New Car Dealer Prices Are Calculated

January 27, 2012

When shopping for new cars, you will probably find that car dealer prices may vary considerably. Therefore, a potential customer is usually left to wonder why prices at car dealerships vary so much. There are many factors in determining how much a new car dealer is willing to sell a car truck for.

The Dealer Invoice

Generally speaking, almost all new car dealerships will pay the same price for a particular make and model new car or truck. The invoice price for new cars and trucks is determined by the vehicle manufacturer and reflects the base cost of the vehicle plus any added accessories or options. Common types of options that would increase the price of a vehicle are an automatic transmission, air conditioning or a premium sound system.

However, there are many options that will cause a vehicle to be more expensive. Therefore, when comparing new car prices you should make sure that your doing an apples to apples and oranges to oranges comparisonmeaning to say, that's just because the vehicles appear to look the same doesn't mean they are. Always check to make sure that the option kits supplied with the two vehicles are the same.

Shipping Cost and New Car Prices

While all new car dealerships pay the same invoice price for new cars and trucks, they don't all pay the same to have new cars and trucks delivered to the local dealership. Shipping costs for new cars and trucks can vary considerably depending on the type of vehicle being shipped and the distance that delivery trucks must travel to bring new cars and trucks to your local new car dealership.

Generally speaking, you will find that new cars may be a little cheaper in areas that are very close to the manufacturing plant of the vehicle, while on the other hand they may be a little more expensive in areas that are hundreds or thousands of miles away from the manufacturer. This is based largely in part on the amount of money that it cost to ship a vehicle from one point to another.

However, the differences in price caused by shipping costs are usually not so much that it will warrant purchasing your new car truck from a far-off locationas you will have to pay shipping costs as well. Even if you don't, driving a car long-distance will require some investment in time as well as fuel.

Dealer Prep and New Car Pricing

Many times, new car dealerships provide added value services source such as anti-stain treatment and pin striping as well as other type of dealer prep options. All of these things add to the cost of a car. Some of them may be options you wantwhile some may not be. However, whatever services that the dealer provides before you take delivery of the vehicle will generally be included in the selling price of the car.

Very Popular Vehicle Prices

Many people are shocked to find that new car dealerships simply will not negotiate at all on some types of new cars and trucks. There are some model vehicles that are extremely popular and hard to keep in stock. For these types of vehicles, some dealerships can charge almost as much as they want to. The reason is quite simple high demand vehicles are harder to find and people will generally pay a higher price to secure them.

Therefore, if you're looking for an extremely popular vehicle, you should throw all standard pricing information out the windowthe dealer simply may not be willing to sell these cars for less. Furthermore the dealership doesn't have to because these cars and trucks are worth as much as someone will pay for them.