Vehicle Invoices and Pricing Study Guide

Question 1

What is the advertising cost on a vehicle invoice? (pg 12)

Answer 1

A percent of MSRP (typically 1%) or a flat dollar amount set by the factory.

Question 2

Define the term Bid Assistance (pg 12)

Answer 2

Additional negotiated rebates that may replace or be in addition to the national fleet rebates.

Question 3

What is the Dealer Invoice Price and how is it calculated? (pg 12)

Answer 3

Amount the dealer pays the manufacturer for a specific vehicle. Determined by deducting manufacturer-provided holdback allowances, incentives, rebates, bonuses, and other discounts from the dealer invoice.

Question 4

What are Factory to Dealer incentives? (pg 12)

Answer 4

Money paid to the dealer by the manufacture to sell specific models.

Question 5

What are Fleet Incentives and who funds them? (pg 13)

Answer 5

Money given by a vehicle manufacturer to a fleet as an added incentive for buying their product. This is funded 100% by the factory.

Question 6

What is Factory Holdback? (pg 13)

Answer 6

Amount paid by the factory to the dealer after the car has been sold, usually on a quarterly basis.

Question 7

Define the term MSRP. (pg 13)

Answer 7

Retail selling price of the vehicle as determined by the manufacturer, printed on the label on the window.

Question 8

What is Triple net invoice? (pg 13)

Answer 8

Manufacturer-to-dealer invoice price less holdback less advertising & financing.

Question 9

What is the most important document in a vehicle purchase? (pg 13)

Answer 9

Factory Invoice

Question 10

What is the formulae for Triple Net? (pg 14)

Answer 10

Invoice - Holdback - Advertising - Financing = Triple Net Cost

Question 11

What is a good starting price to use for negotiating with a vehicle supplier? (pg 13)

Answer 11

Invoice Price

Question 12

What type of information is contained on a standard factory invoice? (pg 13)

Answer 12

Price, Features and details regarding the purchase and delivery of the vehicle.

Question 13

What information do you need to know in order to get the the lowest possible price for a vehicle? (pg 13)

Answer 13

Dealer Cost

Question 14

How can Fleet sales benefit a car dealer? (pg 22)

Answer 14

They are able to move more inventory at a faster rate.

Question 15

What are some of the vehicle manufacture’s requirements for Fleet pricing? (pg 22-23)

Answer 15

Purchase volume or leasing volume.

Question 16

What is the basic rule for negotiating vehicle price? (pg 28)

Answer 16

Use the same terms and same starting point as the dealer.

Question 17

What are the two approaches to negotiating? (pg 28)

Answer 17

A. Start at the dealer Invoice and work down

B. Start at Triple Net Invoice and work up

Question 18

What is an alternative to negotating vehicle prices? (pg 29)

Answer 18

Bidding