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Pricing Terms

What is?

Also known as?

Meaning?

M.S.R.P.

Manufacturer's Suggested Retail Price
Monroney Label
Sticker Price
List Price

The retail selling price of the vehicle as determined by the manufacturer, printed on the label (the Monroney Label) on the window.

Factory Invoice

Invoice
Tissue

The price the dealer pays the manufacturer for the vehicle. This is not generally their net cost, which is influenced by the holdback and any factory to dealer incentives (see below)

Holdback

Factory Holdback

An amount paid by the factory to the dealer after the car has been sold, usually on a quarterly basis. Most manufacturers will pay dealers an amount equal to between 2% and 3% of either the invoice cost or the M.S.R.P. The holdback is one of the reasons that "invoice cost" is not net cost to the dealer. The other reason is "factory to dealer incentives."

Factory to Dealer Incentives

Factory cash
Factory money
Cash in the trunk

This is money paid to the dealer by the factory to sell specific models. These incentives can come and go, according to market conditions. (e.g., a hot selling model most likely would have no incentives, a slow selling model may have a large amount).

Rebates

Customer incentives
Customer rebates
Cash back

These are the ones you see advertised. "Plus $1000 rebate!" "$500 cash back to you!" They are generally (but not always) funded 100% by the factory, meaning that the amount of the rebate should be deducted from any price that a dealer offers.
 
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