Reference

New-car dealer pricing glossary

Plain-English definitions for the terms that matter when pricing new-car inventory and benchmarking competitors.

MSRP: Manufacturer's Suggested Retail Price. The price the manufacturer recommends dealers charge for a new vehicle. Printed on the Monroney sticker.
Invoice price: What the dealer paid the manufacturer for the vehicle, before holdback and incentives. Lower than MSRP. Not the dealer's true cost.
Holdback: A percentage of MSRP (typically 2-3%, varies by OEM) rebated to the dealer by the manufacturer after the vehicle is sold. Effectively a hidden margin buffer.
Doc fee (documentation fee): A fee the dealership charges to process paperwork. Ranges from $75 in states with caps to $900+ in states without. A high-margin line item that rarely shows up in listing data.
Dealer add-on: Accessories or services added by the dealer — paint protection, interior protection, window tint, nitrogen, VIN etching, appearance packages. Often very high margin and negotiable.
Rebate / incentive: A discount offered by the manufacturer (OEM) or dealer. May be cash-to-customer, cash-to-dealer, APR buy-down, lease cash, or loyalty/conquest/military/etc. bonus.
Incentive stacking: Combining multiple eligible rebates on a single transaction (military + loyalty + APR bonus, for example). Eligibility rules vary by program and OEM.
OTD price (out-the-door): The final all-in price the buyer pays: selling price + doc fee + dealer add-ons + taxes + title/registration. Increasingly the number customers shop on.
Desking: Structuring a deal for a live customer — running payment scenarios across finance and lease configurations, and applying available incentives.
Discount off MSRP: Selling price minus MSRP, usually expressed as a percentage of MSRP. A core competitive benchmark for new-car dealers: a higher % off MSRP signals a more aggressive price.
Front-end gross: Gross profit on the vehicle itself — selling price minus the dealer's cost (including holdback).
Back-end gross: Gross profit from F&I products sold alongside the vehicle — extended warranty, GAP, tire-and-wheel, etc.
F&I (finance and insurance): The office at the dealership that finalizes financing and sells add-on protection products. A significant profit center on new-car deals.
Lease cash: A manufacturer incentive applied specifically to lease transactions, reducing the capitalized cost.
Money factor: The lease equivalent of an interest rate, expressed as a decimal (e.g., 0.00125). Multiply by 2,400 to approximate APR.
Residual value: The OEM-set value of the vehicle at lease end. The difference between capitalized cost and residual drives the lease payment.
Monroney sticker: The window sticker federally required on new cars, showing MSRP, equipment, fuel economy, and country of origin.
Redacted deal sheet: A dealer deal sheet from a real transaction with all personally identifiable information (name, address, SSN, driver's license) removed. Unique to AutoMarketIQ among competitive intelligence tools.