Dealer Holdback? Ever heard of this?
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From: Mount Airy,MD
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From: Sanford, MI
Here is another article on buying a car. The guy became an undercover car salesman at two different dealerships and is giving the inside scoop on selling cars. It is long but fascinating.
http://www.edmunds.com/advice/buying...2/page001.html
http://www.edmunds.com/advice/buying...2/page001.html
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From: Taylorville,IL
Dealer Holdback
Dealer holdback is a complex system of payments made to the dealer from the car manufacturer which enhance the dealer's ability to stock his inventory with lots of shiny new models. The dealer finances his forecourt purchases through a bank or his dealership's finance unit, while the manufacturer likely will pick up the interest charges for the first 90 days a vehicle sits on the lot (the holdback, which can work out from anywhere from a few hundred dollars to a thousand or more). If a dealer sells a car within the 90-day period, often they can bank all of the holdback (the full interest charge has been wrapped into the invoice or MSRP price of the car). The dealer pays the price of a new car -- the invoice -- to the factory when they order it, not when they sell it. If a car stays on the forecourt for just a week, the holdback can add up to serious profit for the dealer. Also note that, if the car has been sitting 90 days or more, all of the holdback has essentially been exhausted by the interest payments on dealer's initial loan to acquire the car.
Dealer holdback is a complex system of payments made to the dealer from the car manufacturer which enhance the dealer's ability to stock his inventory with lots of shiny new models. The dealer finances his forecourt purchases through a bank or his dealership's finance unit, while the manufacturer likely will pick up the interest charges for the first 90 days a vehicle sits on the lot (the holdback, which can work out from anywhere from a few hundred dollars to a thousand or more). If a dealer sells a car within the 90-day period, often they can bank all of the holdback (the full interest charge has been wrapped into the invoice or MSRP price of the car). The dealer pays the price of a new car -- the invoice -- to the factory when they order it, not when they sell it. If a car stays on the forecourt for just a week, the holdback can add up to serious profit for the dealer. Also note that, if the car has been sitting 90 days or more, all of the holdback has essentially been exhausted by the interest payments on dealer's initial loan to acquire the car.
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From: Brownsville, Texas
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From: Sunapee, NH
Nope, this is just another peice of the puzzle that allows you to attempt to get the dealer to drop their selling price more.
Some dealers are willing to give up a little more on a sale then others. But realize these days, many of these dealers are supporting their sales staff on the limited money they make from hold backs. And since the dealers aren't selling many trucks or other high dollar vehicles, the hold backs are much smaller. Leaving less money for the dealers sales managers to play with....
Some dealers are willing to give up a little more on a sale then others. But realize these days, many of these dealers are supporting their sales staff on the limited money they make from hold backs. And since the dealers aren't selling many trucks or other high dollar vehicles, the hold backs are much smaller. Leaving less money for the dealers sales managers to play with....
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Joined: Aug 2008
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From: Frisco, TX
When negotiating on a new car even if the dealership sells the vehicle for less than the invoice price, they still make money from the holdback. When I've been told that they aren't making any money at a certain price, I've called BS and mentioned the holdback and it has worked out well for me.
http://www.edmunds.com/advice/incent...ack/index.html
http://www.edmunds.com/advice/incent...ack/index.html
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From: North of Dallas Tx
Bought my 07 KR for less than invoice. The dealer went into his holdback. Invoice is not what they pay. I got 10K off of sticker last year. Read in the KR forum where a guy got 15k off an 08. Go through the fleet department
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From: Frisco, TX
Still it is good to be armed with as much information as possible when negotiating for a new car or truck.