<font face="Verdana, Arial" size="2">I don't remember if i mentioned this here before, but I used the invoice price that I've bought (yes, they are not free in Canada) as a starting point in my negotiations. The tactics proved successful. I told the dealer explicitely that I feel the invoice plus $800 CAN would be a fair deal. The dealer agreed almost immediately, and the deal was sealed. </font>
Yeah, but trust me--if he took the deal, there was probably more on the table to be gotten.
Blind trust of the invoice price as a reference for dealing is bound to get you into trouble. The dealers know that people use it as such, and nowadays the "invoice" price is as much smoke and mirrors as anything. It's just a number anymore, without any relation to anything, serving only to fill the buyer's emotional need for another number that's "less than retail".
Retail, of course, is a smoke and mirrors number itself, to all intents and purposes meaningless.
So now you have two smoke and mirrors numbers, each of which is meaningless yet meaning is assigned by people who want to think that something has a "retail" price (value?) and a lower "invoice" price that allows you to "get one over on that guy by not paying retail".
That's all the "invoice" price is. A psychological tool used by the sales and marketing people to manipulate customer behavior.
The ACTUAL value of the vehicle is what X number of people are willing to pay for it.
Sure, the Pontiac Montana retails at $32,000. Shoot, you can't get it if you don't ask for it. But now we have this "invoice" price to go down to when sales are slow, all in the name of saving that "retail" price for in case the market heats back up.
And then there's the 0.9% financing. Trust me, NOBODY'S selling money at 0.9%. GM is using that as a gimmick to--guess what--LOWER THE SELLING PRICE OF THE VEHICLE *without* touching their "retail" price, again just in case the market heats up and people want a Montana like they want Odysseys.
Want to figure out what a Montana is worth in the market today? (Tomorrow might bring a different number...) Figure out what selling price the salesman would write on a sales order. The absolute bottom number. (If he asks, "Will you finance the car with us?" your answer at this point is always "Yes." Don't worry, you'll change your mind later.) Now, subtract the holdback. (Oh, yeah, remember that?) You have a number; so far so good.
Now, figure out what your total cash outlay would be over 5 years at 6% interest. Then figure out what it would be at 0.9% interest, which is today's promotional rate from GM. Take the difference and deduct it from the salesman's bottom line number--and hand him a suitcase full of cash of that amount. THAT'S the true market value of that car.
And it has nothing to do with the "invoice" price.
Sure, there's a bottom number for every car. But it's all based on supply and demand, and has nothing to do with numbers printed on a piece of paper and everything to do with the amount of cash the guy will trade the car for. And he's got more promotions and tricks for making a deal sound good than Carter has little liver pills.
If you "feel good" about the invoice price, that's not accidental. Trust me. It's 100% intentional. They do this for a living. You do this every now and then not because you want to but because you have to buy a car. They're always one up on you, and this "invoice" price thing is just another gimmick.