[EliAndrewC]

Completely agree - even when the salesmen behave exactly as you'd want them to, it's still a stressful experience because of the price opacity.

When my wife and I bought our current car, we researched the average price for that year/model and resolved not to pay more than that, even though the price we were quoted was much higher. So we went to the dealer and noticed that the price on the sticker was LOWER than the price we'd planned to demand.

We quickly conferred, "Well, it says that $200 of that price is for the mudflaps, we should at least demand that we not have to pay for those since we don't care about them." So the salesman ends up quoting us a price even LOWER than we'd planned to ask for. We looked at each other, shrugged uncertainly, and said "sure, that's fine."

Objectively we ended up paying less than we'd planned when we walked into the dealership, but we felt significantly less happy about it! Later on we kicked ourselves for being caught too off guard to do any haggling; we probably could have knocked at least a few hundred dollars off, and even if not there would have been no harm in asking. There's something to be said for not having to hassle with haggling if you find it unpleasant (as we do), but it's a perverse system that gives you a better deal than you were expecting and makes you feel worse for it.

[astral303]

Future tip: there's a fair amount of price transparency out there, if you search for invoice pricing. Sites like Edmunds provide invoice pricing for the entire car, as well as the MSRP.

Most high volume dealers will sell you cars at or 1% above invoice. This way you can walk in to the dealer informed and know the approximate range.

Dealers don't like this. Some only negotiate as "$ or % off MSRP" and absolutely refuse to compare to invoice. It doesn't matter, since you know what the invoice is.

Finally, demanding not to pay for an accessory that's on the car that you don't care about is a losing proposition. Most of these accessories are factory- or port-installed and are factored in the sticker printout that's with the car. The dealer was charged by the manufacturer for that accessory and has to pay its cost. You are better off finding another car with less stuff on it, or ordering a car (which usually is a painful process, unless you're buying a Mini).

[luser001]

I've read that the "invoice price" is artificially inflated, because manufacturers give dealers hidden "incentives" and things like that to lower the real cost to the dealer. Any thoughts?

[astral303]

I wouldn't call it artificially inflated, in that often times there are just no incentives (especially if ordering a car and not buying from existing stock).

There are two kinds of incentives: publicly advertised incentives (often called "cash back") and manufacturer-to-dealer incentives. The first kind is fairly common. For example, towards the end of a model year (or especially last year of a generation of a car), it's common for manufacturers to offer $1 or $1.5K cash back. The second, "advertised to dealer" kind is much more difficult to find out about. It might hinge on the # of cars the dealer sells that month. It might target a very specific model. Sometimes Edmunds has such incentives listed on a regional basis.

Many people don't bother checking even the manufacturer's own site for incentives. Right now, for example, Toyota has a $500 cash back on Corollas in my area. If I walk into a dealership and demand invoice, I am going to be actually paying $500 over invoice. Most salesmen will withhold available incentives and will happily nod and say "sure, here you go, invoice, you are robbing us blind here buddy."

About the only "inflation" is that the invoice price does include dealer holdback, which helps offset financing charges of holding a car on the lot in stock. A car that was held for a while will accumulate more financing charges (and thus less of the holdback will go into the dealer's pocket), whereas a car that is sold right away will let the dealer pocket the entire holdback. Typically we are talking anywhere from $200 to $800, depending on the car price and car manufacturer. This is an extra sensitive area and dealers are particularly unwilling to negotiate "into the holdback."