The following will be an explanation of each of the above. A note should be added here that anyone reading these articles should read all of them to better understand the entire buying process as it relates to dealer profiting strategies. Reading only one article cannot portray the entire process and may only cause further confusion. These articles are intended as aids to our buying tools.

1. Sale Price: Anything above invoice price is profit.

2. Trade-in Value: Any amount between what the actual cash value of the trade-in is and what the consumer agrees to accept for the trade-in value is the dealer's profit.

3. Rebate: Many dealers take the rebate in lieu of the negotiated purchase price. Do Not allow this to happen to you. The rebate is your money. Negotiate the purchase price and take the rebate as cash back or cash down. If you allow the dealer to take your rebate as part of the negotiated purchase price the dealer adds the rebate to his profits.

4. Cash Down: Profit is made indirectly from the down payment. The dealer will pressure you for more cash down. The reason for this is to assure your new car loan will be approved from the lender with all of the high profits the dealer has packed into it. The greater the down payment the greater the profit that can be made.

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