Skip to Main Content

Dealer invoice

Dealer invoice is a term every car buyer should know. Bankrate explains it.

What is the dealer invoice?

The dealer invoice refers to the price that the dealer pays the manufacturer for a vehicle, in addition to any options that come with the vehicle.

Deeper definition

Traditionally, car buyers have used the dealer invoice price to assist in the process of haggling for better deals. It is important for consumers to realize that the dealer invoice price may not be the actual price that the dealer pays for the vehicle. Car manufacturers frequently offer dealers cash rebates for the cars that they sell, and the dealer invoice price does not take this into consideration. Dealers may also receive financial incentives for selling enough cars to meet manufacturer quotas for specific makes and models. Some manufacturers also pay dealers an additional amount to help offset the costs associated with marketing and advertising the car.

When looking up the dealer invoice prices, car buyers have to make sure they are looking up the correct make and model. The dealer invoice price varies dramatically, depending on the style of the car. A base model will be much less expensive than the package that includes multiple options. Pricing is also different for front-wheel drive and all-wheel drive models.

Dealer invoice example

When shopping for a new vehicle, car buyers will likely use the dealer invoice price to help them determine whether they are getting a good deal. For example, assume that the dealer is asking $25,000 for a certain vehicle. With a little research, the buyer learns that the dealer invoice price is $20,000. Remember, this number does not include any incentives the dealer receives for selling the vehicle. The buyer uses the dealer invoice price to help guide his negotiations and reaches a deal to buy the car for $21,000.

Trying to decide between a new or used vehicle? Run the numbers using our calculator to help you make a choice.

More From Bankrate

  • Placeholder image

    VW to buy back diesel cars

    Volkswagen reaches a tentative agreement to buy back diesel cars that are part of an emissions-standards scandal and give "substantial compensation" to car owners.

    1 min read Apr 21, 2016
  • sticker price

    What is sticker price?

    There is a price posted on the window of a new car which is the dealer’s ultimate asking price.

    Jan 09, 2014
  • dealer holdback

    What is a dealer holdback?

    If a car dealer is telling you they’re selling you a vehicle below cost, don’t feel sorry for them.

    Sep 01, 2013
  • Placeholder image

    What is MSRP?

    The Manufacturer’s Suggested Retail Price is not necessarily what you have to pay for a new vehicle.

    Jun 29, 2013