newcarpricing

Pricing Your New Car

When pricing up a new car what you are essentially trying to do is work out what is known as the ‘true market value’ or the TMV of that car. In order to work out this price you need to know a few different numbers and figures which will provide you with a good ball park figure and a sense of what you should be paying in order to keep everyone, both the dealer and yourself, happy, on the other hand remember your own happiness should come, first, and if the dealer does make a deal which they are supposedly not happy about, it is only because of their own greed, not your reasonable pricing.
Here are the figures you could do with knowing:

When finding out the MRSP remember to make sure you have the exact make, model and year, with all the extras which you will be requiring. For example, you need to be far more specific than just a BMW 5 Series. You need to specify whether it is estate or saloon, what year it was made, what size engine it has and what level of trim it is equipped with.

This price is readily available on the internet however this price is of little relevance. What you need to know is the invoice price, once you know this try and find out if there are any dealer incentives at work, there are websites which list all relevant incentives yet it is still not fully determined as to which incentives your particular dealer is receiving. Whilst these sites will give you a good idea of the available and probable incentives it may be worth being upfront and asking your dealer. Once you have a good idea of the incentives your dealer is receiving you can take away the incentives from the invoice price which will give you a more realistic idea of what the dealer paid for the car (remember that there any many differences from the process of purchasing a used car). Now that you know the actual price that the dealer paid the manufacturer you can come up with your own price by adding say 5% for the dealer’s profit (the dealer has got to eat) or by looking at the TMV and trying to reduce that. A popular way is to take the dealer’s cost, say £13,000 after dealer-manufacturer rebates, the TMV £14,500 and cutting the difference by 50% leaving you with a target price of £13,750. Even if you go down the route of adding 5% to the dealer’s cost you will be looking at saving around £650.