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Understanding Car Prices

Understanding Car Prices Although most car buyers think that dealerships are cleaning up on each deal that they make, in many cases this is far from the truth. The fact of the matter is that car dealerships have to do a lot of work in order to ensure that they stay profitable month in and month out. Of course, they make money on most of the cars that they sell, but they do have many expenses that they have to cover. Not only do they have to pay the sales people, but they also have to store the cars, keep up the showroom, and much more. So as you can imagine, car dealerships need to do whatever they can to make money. Use our guide to understand car prices!

 

Understand how dealerships make money

> Factory Invoice Price

> Rebates

> Sticker price

> Dealer markup

> Dealer's front-end profits

> Dealer's back-end profits

> Dealer hold-backs

> Rebates or low rate financing: which should you choose?

> What's your target price?



 

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