During negotiations for my son's new Max the sales rep told me if he has to get a car from another dealer that dealer retains the holdback making the holdback non negotiable. This came up because a competing dealer was advertising 2002 Max's at invoice minus 1000 cash minus 800 of the holdback for a total of 1800 under invoice. Just curious if he was pulling my leg about the holdback going to the original dealer that took delivery of the car.

 

so wait, i dont understand, since the dealer has to get the car from another dealer, instead of paying $1800 under invoice, you have to pay the holdback, making it $1000 under invoice? is that right? well i just bought a 2002 civic, and they had to get it from another dealer, and i didn't have to pay any extra or a holdback or whatever, $1000 under invoice sounds good to me as is, but the $1800 sounds better that holdback thing sounds stupid to me, but i'm only 19, and i dont know jack about dealing cars, you should wait for more experienced members to tell you.

 

Actually, I am pretty sure they were right about the holdback.

Simplified, holdback comes from the factory, and pays the dealer to help finance the car while it is on the lot and not sold - "floor-planning" if you will, among other things.

It goes to the original dealer to help them. So if they sell/transfer that car, the holdback will not follow it.

Although, usually when this happens, the dealers "trade" cars, one for another. So even though they might not get the holdback on the first car, they are getting rid of another car that may still have holdback left on it - and get to keep that holdback.

 

Don't forget about the $1,0000 rebate now in effect.

 

During negotiations for my son's new Max the sales rep told me if he has to get a car from another dealer that dealer retains the holdback making the holdback non negotiable. This came up because a competing dealer was advertising 2002 Max's at invoice minus 1000 cash minus 800 of the holdback for a total of 1800 under invoice. Just curious if he was pulling my leg about the holdback going to the original dealer that took delivery of the car.

I just purchased a 2002 SE 6sp, and the first dealer who I was going to purchase the car from had to get it from another dealer. When I saw the breakdown they had a marketing fee of almost $600. I told them to drop the fee as there was no way they could charge a marketing fee for a car they had to trade for, they said no deal and I walked. Found another dealer an hour away, no marketing fee, $500 below invoice, then the $1,000 rebate. It sounds as if the dealer is trying to make a little extra profit on your deal. Shop around for another dealer, you just might get a better deal.

Another poster said dealers trade cars all of the time and they do, so if two dealers trade cars, they are still getting the holdback from the manufacturer of at least the car they traded, so to me it seems a wash. If I am wrong someone please correct me.

 

You are correct, the holdback is generally 3% of MSRP and most dealers won't even discuss it.