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New Subaru Prices: MSRP, Factory Invoice vs True Dealer Cost

Subaru Prices: MSRP, Factory Invoice vs True Dealer Cost

Subaru Prices

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Why You Should Know the True Dealer Cost...

Most people mistakenly believe that the Subaru Invoice Price reflects what the dealer paid for a new vehicle - The true Dealer Cost. It is not!

The Dealer Invoice Price has hidden mark up such as holdback and other fees built into the price.

The following Subaru price guides strip these hidden dealer profits out and illustrate the MSRP, the invoice price, Holdback and the true dealer cost. (See price definitions below.)

Knowing the dealer cost of a new Subaru gives you needed leverage when it comes time to negotiate a great price. Negotiating from the cost up and not the MSRP down can save you thousands on your next purchase.

Subaru Price Terms & Definitions

Buying a brand-new car is one of the biggest investments you will ever make in your life. As such, it is vital that you do your homework before heading to the dealership. There are quite a few terms and definitions you should understand before you make any transaction official:

MSRP is short for the "Manufacturer Suggested Retail Price." As its name suggests, this is the baseline price that is recommended by the manufacturer of the vehicle, though the actual price that the dealer charges will vary slightly.

Dealer Invoice: The dealer invoice, on the other hand, is the amount of money that the car dealership is required to pay the car manufacturer in order to receive the car.

Dealer Holdback: The dealer holdback is a token amount of money that the car manufacturer provides the dealership with in order to ease the costs of buying numerous vehicles and waiting for them to sell.

Regional Ad Fees: Regional advertisement fees are fees that the dealership pays the car manufacturer for any local advertisements, commercials, and promotions that the manufacturer runs which benefit the dealer. The advertisement fees that the dealer has to pay are just a small portion of the total cost of these ad campaigns.

Destination Fees: The destination fee is a small amount of money charged by the car manufacturer to cover the cost of delivering the vehicle from the actual factory to the dealer's showroom.

Manufacturer Incentives and Rebates: Manufacturer incentives and rebates are measures taken by automakers to encourage buyers to purchase some of their slow-selling vehicles.

Each of these terms will play a small roll in the final cost of your new car. By arming yourself with the right knowledge, you can walk into the car dealership with confidence and make a purchase you will be happy to live with for many years to come.

True Deal Cost - The actual price Subaru dealers pay for their new vehicles. Here is how it is calculated:

Formula for Calculating Dealer Cost of a New Subaru:

  • Base Subaru Invoice Price + the dealer Invoice price of Options + Destination - Holdback = Total Dealer Cost.
  • What is Dealer Holdback? A hidden amount that manufacturers give back to a dealer. It is a percentage of the MSRP or the Invoice price. The holdback for Subaru is 2% of the Total MSRP. (See the New Car Dealer Cost Example.)

Total Dealer Cost - Rebate and Incentive + Taxes / Licensing Fees = True Dealer Cost.