Free Dealer Markup calculator with clear step-by-step results.
Invoice price is not the dealer's cost. Factory holdback - typically 2-3% of MSRP - is rebated after the sale, so a car sold at invoice still earns the dealer money. Adding holdback to the markup over invoice gives the gross profit that actually sits in the deal.
Holdback
Holdback = MSRP x holdback percentage
Dealer gross
Gross = (asking price - invoice) + holdback
On slow-moving stock, yes - holdback and volume bonuses mean a below-invoice sale can still be profitable. On allocation-constrained models, asking prices sit above MSRP instead.
No. Paint protection, fabric treatment and nitrogen-filled tyres carry very high margins and should be assessed separately from the vehicle price.