Tips on Buying Cars: current economy-reasonable offer, invoice price, loaf of bread

Question
I am considering a new 2008 if avail small suv. I know the msrp is high, and I know there is an invoice price. If the msrp is about 25, what is the invoice price, and would the dealerships consider any offer of 18 or is that just too low? If the cars are just sitting on the lot, is it crazy to offer that amount? And I would want it to be that "out the door"--possible?

Answer
Gayle,

Thanks for your question.  It is always difficult to know where the invoice price on a vehicle is these days.  I will tell you that the markup is no where near what anyone thinks it is.  The average markup on a vehicle that price is around $1800.  Now 18 seems very unreasonable, but there could be rebates from the factory and other things that would help them get to that price.  However, I highly doubt that there is that much of a rebate to get you to 18 out the door.  It really doesn't matter if the vehicles are just sitting on the lot, a dealer can not loose that much money to sell you a vehicle.  If they did, they would be out of business fast!  You need to be reasonable with your offer and understand that the dealership is there to make money just like any business is.  You wouldn't walk in a grocery store and offer 50 cents for a $3.99 loaf of bread would you?  No, and the markup on grocery's is much more percentage wise than on cars - why do you think there are so many grocery stores.  With that said, you can get a good deal on your vehicle, just be reasonable.  

Hope this helps.

Thanks - JB