Car Buying Terms

  • MSRP: What the dealer wants to sell for.

  • Invoice: What the dealer bought it for.

  • Manufacturer Incentives: holdbacks, what the dealer gets from the manufacturer for selling the car.


  • Barron’s pointed out that if gas cost four dollars a gallon, it would take something like two hundred years of driving 15,000 miles annually to cover the extra cost of a hybrid.-The Behavior Gap by Richards.

  • Buy used, don’t lease.-The Young, Fabulous, and Broke by Orman.

Negotiating the Price

  • i.e. MSRP: 18000, Invoice: 15000, holdback: 1000

  • Hey, we both know you have a 1000 holdback on that car that knocks the price from 15000 to 14000 so Ill pay you 14500 and we can split that.