Why Might Car Quotes Differ Dealer from Dealer

January 27, 2012

Some car shoppers who are just stepping into the wide world of new auto sales might have the mistaken notion that sticker price or MSRP should make new car quotes and prices the same at any dealership. The fact is that final new car quotes vary a lot by dealer. Here are some of the reasons behind the different prices you may find when you shop around for your next new car or truck.

Dealer cost

Dealers don't get vehicles from the manufacturer for a set price, although they do receive wholesale prices. The price that the dealer pays the manufacturer for any specific vehicle can vary. A dealer might set up a bulk shipment, or develop a discount connection over time. This will affect their resale prices on the lot.

Dealer Overhead

Another big factor in the final car quote you get from a dealer is the overhead. Dealers need a profit margin, and to accomplish this, they need to offset the cost of advertising, lot space lease or rental, labor costs, shop costs and a whole lot of other items. The way your dealership does business will affect what price they want for the new vehicle you're looking at. That doesn't give the dealer the right to inflate prices endlessly, it's just something to consider if you're wondering why prices differ between shops.

Dealer Location

Auto sale prices also vary because of a dealer's location. A cost-of-living index can vary from one zip code to another. Dealers in one neighborhood may be able to offer better prices than another lot, even if they are only a few miles away from each other.

Profit Margin by Any Means

The MSRP or sticker price on a new vehicle is a kind of price control, but because of the issues above, dealerships always need to make a profit. One way that the dealership does this is to add on to a basic car quote price with items like extended warranties and other services. Some customers feel that dealers routinely overvalue warranties or anything else on the bill to pump up their profit margin at the expense of the buyer. Car shoppers always need to get an itemized quote and talk to dealer reps about anything they think is excessive.

The above should give you an idea of why new car sale quotes can vary so much. With this in mind, talking over the details of the sale price with the dealer is the key to driving away happy. Good new car negotiations are often a dance of compromises between the buyer and seller that lead to an equitable middle ground. With practice, a driver can get closer to figuring out what is fair for a final new car price quote.