There are numerous online and pricing services to help you find the invoice or wholesale value of almost any car. However, to buy a car or truck -- new or used -- at or near wholesale is more of a challenge. Using specific car-buying strategies and techniques can improve your odds of getting the vehicle you want at the lowest possible price.
The dealership pays the invoice price of a new vehicle to the manufacturer. It may receive additional money under specific programs that reduces its actual cost. On the other side, a dealer may be paying interest on money it borrowed to pay the invoice cost. That interest accrues until the car is sold. Rebates are cash payouts the manufacturer provides to help sell the car. Roughly speaking, the wholesale price of a new car is the invoice cost minus any available rebates. New car pricing websites provide the invoice cost when you enter the model and options.
Buying a car that the dealer is highly motivated to move off the lot gives you the best chance to negotiate a price at or below wholesale. Conditions that may put a car into that category include unpopular models, slow-selling colors, previous model years, cars that have been on the lot for months and vehicles used as demo drivers. The sales manager may start negotiating at a lower price on cars in those categories and you can push for the lowest possible number. Some of the characteristics, such as overage or demo cars, may not be obvious. Ask the management directly if those types of cars are available.
Buyers and sellers of used cars generally depend on the Kelley Blue Book to estimate wholesale and retail values. Online used car pricing sites may provide slightly different numbers than the book value a lot manager uses to value a trade-in or wholesale purchase. A used car should price out with a trade-in value, a private-party sale price and a retail value, the price at which a dealer might sell the car. The trade-in value tends to be the best estimate of a used car's wholesale worth. From that price point, a dealer may have to spend more than $1,000 in reconditioning costs depending on what kind of shape it's in. As a result, dealer cost on a used car will be higher than the listed wholesale value.
At dealer-only auto auctions, wholesale prices are set by the auction process and the selling values are the true wholesale costs for each car. To buy at the auction you need a dealer's license from your state or to find someone with a license that will take you to the auction. The licensed individual will probably want to add a premium, sometimes several hundred dollars, to the purchase price for his efforts. You can also negotiate with private party used car sellers and attempt to buy cars at the trade-in value. Success in this approach depends on the seller's willingness to accept a low price.
