A little homework before price haggling

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A shopper looks at a window sticker on a Ford Explorer SUV. The suggested retail is only part of the story.

For the average consumer, buying a new car can be as pleasurable as a root canal.

Everyone wants a great deal, and buyers tend to feel as if they're about to pay a lot more than they should.

Savvy customers have long sought the invoice price - the price dealers pay the manufacturer for the car - so they have a good point to start negotiating. And with the Internet and smartphones, finding that invoice price - and getting a good deal - has never been easier.

Invoice price

First a lesson, and a little history. When I review cars, I start with the price. I get this from something called the Monroney. This is the sticker that's generally posted on a new car on a dealer's lot, and the price listed is the manufacturer's suggested retail price.

Invoice price is generally considered to be the price the dealer pays for the car. The thinking is, if you can get your hands on this, then you can make yourself a better deal.

Once upon a time, even the MSRP label was difficult to track down, said Jesse Snyder, opinion editor at Detroit-based Automotive News.

"You had no idea what the car would cost," Snyder said. "This is in the really bad old days; this is the reason that car sales people used to be the least trusted people around."

But wait, there's more

So, where can you find the invoice price? I asked Carroll Lachnit, consumer advice editor for Edmunds.com.

"Will dealers make a habit of showing the customer the invoice? No," Lachnit said. "You can find it on our website all day long."

Edmunds and plenty of other automotive sites offer this information to the consumer. But even that doesn't tell the whole story.

Lachnit gave me an example from the months of February and March, when Hyundai was unveiling the 2017 Elantra. This meant that the 2016 model had some good incentives on it.

The SE model Lachnit described had an average MSRP of $19,355, an invoice price of $18,980, and an average price paid of $18,508. So it was being sold on average for almost $400 under invoice.

"If you didn't know there were incentives on that car and went to a dealer and said, 'I'll give you 200 over invoice,' they would have happily taken that," she said.

So it's important for consumers looking for the best bargains to keep an eye on these factors as well.

So, it's the poor dealer, right?

In this arrangement, it sounds as if the consumer wins mightily, and it's amazing car dealers can stay in business at all.

But don't feel too bad for the friendly salesman in the white shirt just yet.

"The invoice price does not tell you things like hold-back and other incentives that manufacturers provide to dealers," Snyder said.

The hold-back is a payment that manufacturers provide after the car is sold. But don't expect to put a dent in that money, Lachnit said.

"For a shopper, it's better if you just don't even go there," she said. "The dealer considers that their profits and not for civilians."

A dealer's perspective

As for dealers, is it tougher to make money in this environment? David Kelleher, president and owner of David Dodge Chrysler Jeep Ram in Glen Mills, doesn't think so.

Kelleher said that as information becomes easier for the average consumer to access, there seems to be more understanding about how much wiggle room dealers have.

"A lot of time people thought we had these gigantic margins to deal with," he said.

And dealers have turned to other revenue streams - service, financing, warranties, and other add-ons. That's why Kelleher first wants to get that customer in the door and keep her or him for the long haul.

"An old wise man once told me, 'Look, David, don't trip over dollars to get to pennies. Nothing starts until someone buys a car from you,' " Kelleher said.

"I need customers, as long as they're not trying to steal the baby."

ssturgis@phillynews.com 215-854-2558