What is Holdback?

• Holdback is an amount paid to the dealership by the manufacturer to offset the normal costs of doing business, like facility maintenance and employee salaries.
  
  

Impact of Holdback

• Even though holdback is intended to offset the normal costs of doing business, it is actually connected to an individual vehicle in the dealership's accounting system. In this sense, holdback allows a dealership to sell a vehicle at the invoice price and remain profitable.
  
  

Getting the Best Deal

• Knowing the holdback amount can help you negotiate a deal that is at or near the invoice price.
  
  

Calculating Holdback

• Calculating the holdback amount on Honda Accords is easy. The holdback amount is 3% of the MSRP of an Accord before adding on factory-installed options.
  
  

Expert Insight

• Few car buyers know that holdback actually lowers a dealership's cost for a car. Many dealerships are willing to negotiate through holdback money in order to increase their sales volume and qualify for volume-based bonuses.