NOTE: To make this question more generic, I've replaced the real make and model with placeholders and fudged some of the numbers.
I've gotten in contact with an internet sales manager about a new car. After making an initial offer (that was deliberately low), I got this response:
I appreciate you allowing me the opportunity to assist you with your new MAKE purchase! While it would seem practical to reduce the price of the 2016 MAKE MODEL significantly due to the arrival of the new 2017 MAKE MODEL, MAKE did not put that much cash incentives on it to reduce it to the price you're requesting.
The following information that I give you is information that you can find on the internet...
MAKE has a cash incentive worth $900, whether you finance or pay cash. This is in addition to the special APR. The dealer gets money from MAKE for each vehicle sold, only after it has been sold. That number varies depending on the model. For the 2016 MAKE MODEL TRIM it is $800. Invoice is what the dealer pays for the vehicle.
MSRP for the 2016 MAKE MODEL TRIM is $26,000.
Invoice for the 2016 MAKE MODEL TRIM is $24,000.
Subtract $900 and $800 from Invoice and you get $22,300. (This is true cost of the vehicle to the dealer). Because MAKE requires that each dealer perform a PDI (Pre Delivery Inspection) on every vehicle sold and there is a prep department that gases and cleans the vehicle, add about $100 to the cost giving the dealer a true cost of $22,400. After the vehicle is sold the dealership still has to pay the sales person. In this instance however, the dealership can decide to give away a car at the $22,400 and absorb the sales commission to make room for the new MODEL's or not, however, I've never seen a dealership take a loss beyond that amount to make room for any new vehicles.
The price difference between the new 2017 MODEL's and 2016 MODEL's are significant enough to move out any 2016 MODEL's that are left within the next 30-60-days.
The owners and sales manager probably wouldn't like the fact that I'm giving you this information, but like I said, this is information that MAKE has release to the public on the internet. My job is to give you as much information as possible so that you can make an informed decision.
I hope that this was helpful. Let me know if you have any questions. Hopefully I've giving you a reason to consider my offer and we can close this out by the end of the year.
(My initial offer was quite a bit lower than $22,400. That's fine, as I gave it knowing it was only a starting point and that I'd have to go up.)
I'm frankly surprised that this manager was so (seemingly) straightforward with me. I sent the same email to multiple salespersons at other dealerships and did not get any other response like this. It almost seems too easy.
So, my question is, how can I tell if the "true cost" number this manager is giving me is real?