About Cars Info

 SOURCES OF DEALER INVOICE PRICING DATA

  •   Many Internet web sites provide this data. The most popular are Kelley Blue Book (www.kbb.com ) and Edmunds (www.edmunds.com).
 
  • There are several pricing books you can buy in bookstores and on newsstands. But beware, those books are not published every week or every month, and new-car pricing can change frequently. As an example, General Motors (GM), Ford, and Chrysler increased prices on most of their vehicles six to eight times during the 2003 model year to help pay for sky-high incentives and cut-rate financing. If you trust any of those books, you may not have the current numbers.
 
   • Complete dealer invoice pricing for the vehicles you're shopping is also available as part of our Fighting Chance information package, described in other locations. We get weekly updates and typically have price changes as quickly as any other source.

Why do dealers who make a killing with some customers agree to slimprofit deals with others? Four key reasons:

1. First and foremost, they're in a sales-driven, ego-driven business. At the end of each month, the first question anyone asks is, "How many cars did we sell?" not, "How much profit did we make on each deal?" By definition, almost any sale is a good sale.

2. Frequently, a dealer's future supply is based on his current sales performance. It's called "turn and earn." Most dealers are terminal optimists, and they want to be sure their vehicle allocation will always be sufficient to support their dreams. In this business, an extra sale today means an extra sale tomorrow.

3. Once they understand that you're a knowledgeable shopper who will negotiate a slim-profit deal, they'd rather take the slim profit than give the sale to a competitor. Selling one more car this month and making a modest profit always beats not selling it and making no profit.

4. Finally, since they make the bulk of their profits from parts and service, they want that vehicle out on the road, where it will generate a steady income stream. (Parts and service account for less than 15 percent of the average dealership's gross sales, but about 50 percent of its net profits.)

To negotiate a slim-profit deal, you should start by learning as much as possible about what your vehicle is going to cost the dealer.

Virtually all automotive information sources we've seen imply that it's possible to learn the dealer's true "dead cost" for any vehicle. You need to understand from the outset that that's not true. Only the owner of each dealership knows his or her real dead cost.

That's because there are several nontraditional ways that auto manufacturers are putting cash in dealers' pockets today that are not reported anywhere and that no one, on or off the Internet, can tell you about.