We’ve all heard the term “factory invoice,” but what does it really mean? Car dealers would love for you to think that the “factory invoice” price is the price they paid the manufacturer for the car they’re trying to sell you. In reality, that’s probably not the case. From Bankrate.com:

The invoice that most dealers are happy to show you represents a theoretical price the manufacturer would charge the dealer if the dealership sold just that one vehicle. Of course most dealers sell hundreds or thousands of vehicles a year and manufacturers offer all manner of incentives to encourage dealers to sell even more.

There’s no way to know what the dealer incentives are, so how will you know if you got a good deal?

It depends on the vehicle — cars and trucks that are in demand will always carry a lot of dealer profit, while slow-selling vehicles usually come with deep factory discounts and dealer incentives. But as a general rule, you’ve gotten a good deal if you’re final number is within $250 or so of the publicly available invoice price.

Somehow, we just knew they weren’t selling those cars at a loss.—MEGHANN MARCO

Invoice price on any car is a mythical figure [Bankrate]

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