True Car Dealer Cost and Calculating Your Offer


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True Dealer’s Cost and Making Your Offer

Last Modified: November 08, 2015 by Jeff Ostroff | Originally Published February 26, 2000

CarBuyingTips.com will show you how to figure out how much the dealer paid for the car. To help do this, we will make use of some great free sites. I have also created a free Offer Spreadsheet that will calculate a fair offer for both you and the dealership. Once you fill it out you’ll be able to use it during your negotiations.

How Much is Fair to Offer the Dealer?

In order to calculate your offer, the first thing you have to do is find out how much they paid for the car. Then you will be able to offer them a deal that gives them a fair profit.

Don’t just make up a number for the offer, make an educated offer based on the dealer’s actual cost. It will take some time and research so you must be patient.

At the dealership, one of the first things you should do is ask them to show you the factory invoice for the car. If they refuse your request, I will show you how you can get the information online.

Your Offer Should Be 3% – 5% Over Actual Cost

To be fair for both sides, you should make an offer of 3% – 5% over the actual dealer’s cost, not above the invoice price. Dealerships will gladly accept a 5% profit. In fact, many dealers survive on 3%. I have done extensive research with auto industry insiders and have verified this to be true.

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