Do Dealer Holdback Incentives Apply To A Lease?
Yes, they do. Manufacturers pay a hidden financial incentive called a holdback to their dealers when a new vehicle is sold. Holdbacks are paid out whether the vehicle is leased, financed, or bought with cash. The amount is based on the MSRP (retail invoice) and averages between 2% and 3%, depending on the manufacturer. Holdbacks ensure that dealers in competitive markets who are forced to offer vehicles for “dealer invoice” still make a small profit. (Note: not all manufacturers pay their dealers a holdback, so make sure to check if your dealer is getting the holdback before negotiating a price on your leased vehicle.) High-volume dealerships qualify for additional manufacturer discounts (in addition to holdback incentives), and are usually willing to sell vehicles at or near invoice.
