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  • kiawah 12/31/07 12:32 pm PST

    That is a minimal amount of money, typically 2-3%. that a dealership gets from the manufacturer in the form of a discounted purchase cost. You can certainly try to negotiate below invoice cost into this range, and based upon the manufacturer, model, time of year, inventory levels, economic outlook, and whether the stars are aligned correctly you may or may not be successful. Success can vary widely depending on manufacturer and dealership. Generally speaking, consider yourself getting a good deal if you can get close to invoice.

  • sylvia 12/31/07 3:35 pm PST

    Dealer holdback really shouldn't be used as a bargaining chip for the price but you should be aware of what it is and how it works.

    Dealer holdback is a percentage of either the MSRP or invoice price of a new vehicle (depending on the manufacturer) that is repaid to the dealer by the manufacturer. The holdback is designed to supplement the dealer's cash flow and indirectly reduce "variable sales expenses" (code words for sales commissions) by artificially elevating the dealership's paper cost.

    Source: Dealer Holdback rates http://www.edmunds.com/advice/incentive
    s...

  • madmanmoo 01/02/08 11:18 am PST

    Holdback is a myth! No such thing!

    Seriously, it's just money used for inventory costs by the dealer. You shouldn't worry yourself about it, but sometimes you can negotiate a deal and take advantage of holdback savings.

  • greanpea68 01/04/08 11:40 am PST

    Sylvia and Moo had correct answers but I would like to add to it. when dealers get vehicles from the factory they have to pay the factory there money than. Not when the car is sold. THe way dealerships do it now is by financing the vehicles through a bank. Pick any big bank in the world and they do it. Lets say 10 vehicles roll off the truck each costing $30,000... Well that would be $300,000 for 10 vehicles this one day. (keep in mind they come every couple of days) SO the delaership finances this $300k at say 4% for 90 days. After 90 days the rate goes up. So another thing keep in mind that hold back is mainly used for is to pay this floor plan or interest owed to the banks for fimamcing the cars we bought.

    GP

  • hmc3 01/12/13 4:05 pm PST

    simply put. Holdback is money that the manufacturer gives the dealer to help cover dealership expenses, not the salesman. It is not part of the invoice price nor is it guaranteed to the dealer. In alot of cases they don't get that holdback if they don't meet certian quota set by the manufacturer. That's why the dealer's don't like to talk about holdback.

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