How a new car's price is actually built
The sticker is only the start. Here's what gets added and where the dealer can make money.
A new car's price is assembled from parts, and knowing the parts is what makes a negotiation possible.
At the base is the manufacturer's suggested retail price, which is exactly what it says: a suggestion. Beneath it sits what the dealer paid, which is not the sticker minus a neat percentage. Between the two live holdback — a portion of the price the manufacturer returns to the dealer after the sale — and volume incentives that depend on how the store's month is going. This is why the same car can be sold at very different numbers in the same week by the same store.
On top sit the additions. Destination is real and is charged by the manufacturer. Factory options are real. Dealer-installed accessories and protection products are the store's own merchandise, priced by the store.
Then there is the money side, which is a separate profit centre: the rate you are offered can differ from the rate the lender approved, and the difference is revenue. The same is true of extended warranties and insurance products sold in the finance office.
The practical consequence is that there is no single lever. A buyer who wins on price and then accepts the first rate offered may end up paying more than a buyer who did the reverse. Ask for the out-the-door total, the term, the rate and the list of added products as four separate answers, and compare those across stores rather than comparing monthly payments.