Auto Fraud: The Advantage of a “Holdback”
Actually, “holdback” auto fraud is profitable for the dealer whereby the dealer pays from 1% to 3% less than the invoice price which may be shown to you by the sales manager. First the dealer buys the vehicle from the manufacturer at the stated price on the invoice. Later, when the dealer sells the car the manufacturer provides a rebate to the dealer for the costs of maintaining that vehicle in its inventory for a period of 90 days. Taking into consideration that most vehicles are sold more rapidly, i.e., within 90 days, some part of that rebate or reimbursement from the manufacture is the net profit for the dealer even if the car is sold at only the invoice price. The dealer will probably not provide you a further discount below the invoice price, but be aware and negotiate.
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