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Why Some Dealers Sell Cars at a Loss — and What That Means for Buyers
Most people walk into a dealership assuming the dealer is trying to squeeze every dollar out of the deal. That’s fair. But here’s something most buyers never consider: sometimes a dealer is actively trying to lose money on your car (on purpose).
It sounds backwards. But once you understand why it happens, you’ll never negotiate the same way again. I spent 43 years as a car dealer, spending time in just about every major role throughout several dealerships. I want to share some insider tips that can help the average car buyer gain the upper hand when it comes to negotiating a car deal.
Let’s dive in.
How Dealer Profits Actually Work
Before we get into the volume game, it helps to understand how thin new car margins actually are.
On an economy car — your Kias, Hyundais, Nissans — a dealer might have 2 to 3% markup built into the sticker price. On a $22,000 car, that’s $440 to $660 in front-end profit before negotiations even start. Negotiate at all, and that number shrinks fast.
Luxury and truck margins are better, but even there, the car sale itself isn’t where dealerships make most of their money. The real profit centers are the Finance and Insurance office, the service department, and parts. Selling you a car is how they get you in the door for everything else.
Which means that from the dealer’s perspective, making a little less on the sale of the car isn’t necessarily a bad outcome. It depends on what else they stand to gain.
The Volume Incentive Game
Here’s where it gets interesting.
Manufacturers set monthly, quarterly, and annual sales targets for every dealer in their network. Hit the target, and the manufacturer pays out a bonus — sometimes worth hundreds of thousands of dollars for a single month. Exceed the target, and the bonus gets even bigger.
The structure is typically tiered. To use a simplified example: sell 95 to 105% of your monthly goal and the factory pays $1,000 per car sold. Push it to 105 to 115% and that jumps to $1,250 per car. The incentive compounds the more you sell.
Now here’s the math that changes everything. If a dealer has sold 94 cars with two days left in the month, and their goal is 100, they need six more deals to hit the first bonus tier. At $1,000 per car across all 100 units sold, that’s a $100,000 payout. Suddenly, selling a car at a $500 loss isn’t losing money — it’s a $99,500 return on a $500 investment.
That’s why dealers take losing deals at the end of the month. The math works in their favor.
When This Works in Your Favor
This dynamic creates real, predictable windows when dealers are motivated to deal in ways they simply aren’t at other times of the month.
The last week of the month is when pressure builds. The last Tuesday, Wednesday, or Thursday before month-end is the sweet spot — dealers are pushing hard, managers are flexible, and the urgency is real on both sides of the table.
The end of the quarter is even better. Quarterly targets stack on top of monthly ones, so the final days of March, June, September, and December carry double pressure. A dealer who’s behind on both a monthly and a quarterly goal has a lot of reasons to sharpen their pencil on your deal.
Model year changeovers are another opening. When new model year inventory starts arriving, typically late summer into fall, dealers need to move the outgoing models fast. A motivated dealer on aged inventory is a dealer you want to be talking to.
The same logic applies to slow-selling models in general. A vehicle that’s been sitting for 90 days is a liability. One that moves in a week is not. CarEdge tracks Market Days Supply for every vehicle — it’s one of the most useful numbers you can check before you negotiate, because it tells you exactly how much leverage you’re walking in with.
How to Use This at the Negotiating Table
Knowing this is only useful if you act on it. Here’s how to put it to work.
Time your visit. End of month and end of quarter aren’t secrets, but most buyers still show up whenever it’s convenient. Being intentional about timing is one of the easiest advantages you can give yourself.
Know the invoice price before you go. MSRP is the dealer’s starting point, not yours. The invoice price — what the dealer paid the manufacturer for the car — is your baseline. CarEdge provides free invoice pricing data so you can walk in knowing the actual number, not a guess.
Check Market Days Supply. A car with 90+ days supply is sitting. A car with 20 days supply is moving. The more supply, the more room to negotiate. Find this on CarEdge Car Search before you set foot in a showroom.
Don’t be afraid to go below invoice. It happens more than most buyers realize. When a dealer needs a deal to hit a bonus tier, below invoice isn’t just possible — it’s logical for them.
Get competing offers. Contact multiple dealers on the same car. One of them may need your deal more than the others on a given day.
What This Doesn’t Mean
A few things worth being clear about.
Dealers aren’t desperate every day. If you show up the first week of the month, when quotas have just reset and the pressure is gone, you’re negotiating against a dealer who has no reason to give anything away. Timing matters.
Even when a dealer takes a thin deal on the car, they’ll look to make it up somewhere else — the financing, the trade-in, the add-ons in the F&I office. A good deal on the vehicle doesn’t automatically mean a good deal overall. Hold firm on extended warranties and other F&I products, and make sure your trade-in value is based on market data, not whatever number they write down.
If you’d rather not manage all of this yourself, CarEdge Concierge handles it all, from finding the car you want to negotiating the out-the-door price.
The Bottom Line
A buyer who walks in during the last week of the month, knows the invoice price, and understands the local market is in a stronger position than almost anyone else in that showroom. The manufacturer built this system to move cars. It can move money into your pocket too, if you know how it works.
Sometimes, the dealer needs your deal more than you need their car.
Buying a Car on the Weekend? Former Dealer Explains the Pros and Cons
Walk into a dealership on a Saturday afternoon and you’ll immediately feel the energy. Salespeople are moving, managers are busy, and the finance office has a line. Now picture walking in on a Tuesday morning at 10 AM: quiet showroom, attentive staff, and a manager who picks up the phone on the first ring.
Both scenarios can work in your favor. They just require different strategies.
The truth is, timing matters enormously when buying a car. However, it’s not the one-size-fits-all advice you’re likely to see online. I was a car dealer for four decades before starting CarEdge with my son Zach. What I learned over the years can help you get a fair deal with the least stress.
Whether you’re shopping on a weekend or a weekday, knowing what’s happening on the dealer’s side of the table gives you leverage.
The Weekend Reality: Chaos and Opportunity at the Same Time
Weekends account for roughly 60-70% of dealership foot traffic. That creates real challenges for buyers: salespeople juggling multiple customers, managers buried in their offices, and F&I departments with hour-plus waits.
But here’s what most car buying guides won’t tell you.
It’s true that stores are busiest during the weekends, but deals can be had because the weekends are when stores are looking for sales volume. There are usually lots of appointments scheduled plus a lot of walk-in traffic. I would suggest that there is a greater emphasis placed on making deals especially on Saturday.
In other words, the same energy that makes weekends chaotic also makes dealers hungry. The floor is busy because they want it to be. And a prepared buyer can absolutely take advantage of that.
How to Use the Weekend to Your Advantage
Go Early Saturday Morning
If you’re shopping on a weekend, get to the dealership by 9 AM. You’ll catch staff before the chaos builds, and you’ll be first in the finance queue. More importantly, you’ll have a salesperson’s full attention before they’re pulled in five directions.
Come Prepared — It’s Non-Negotiable
Weekend buyers who overpay are usually unprepared buyers. When the showroom is packed, pressure tactics thrive. Salespeople will suggest other customers are eyeing the same car. Managers will push for quick decisions. The antidote is doing your homework before you arrive.
Know the fair market value of the vehicle using tools like CarEdge’s Deal Finder. Have a pre-approval from your bank or credit union. Know your trade-in value. When you walk in with all of that, that pressure stops working.
Use the Dealer’s Motivation Against Them
Salespeople earn bonuses for closing deals on Saturdays — which means they have a personal financial reason to work with you. If you’re close on numbers, lean into that. A salesperson who earns an extra $200 for closing a deal today has more incentive to go back to the manager and push for a better number.
Don’t Let the Finance Office Drain You
The biggest weekend mistake isn’t the negotiation — it’s arriving at the F&I office mentally exhausted after a two-hour wait and saying yes to products you don’t need. If you’re going to shop on a weekend, plan for the wait. Eat beforehand. Know in advance what add-ons you’ll decline. Extended warranties, paint protection, and GAP insurance are all negotiable; GAP in particular can often be cut from $895 to under $400 if you push back.
When Weekdays Still Have the Edge
None of this means weekdays have lost their advantage. If you have flexibility, Tuesday through Thursday mornings remain the lowest-pressure environment for buying a car. Manager wait times shrink, salespeople focus entirely on your deal, and there’s no manufactured scarcity in the room.
The best time of all? A Tuesday or Wednesday morning in the final week of the month — or better yet, the final week of a quarter (late March, late June, late September, late December). Monthly and quarterly quotas stack on top of each other, and dealers are sharpening pencils to hit numbers before the deadline.
Other Timing Factors Worth Knowing
Rainy days cut foot traffic 30-40%, even on weekends. Quotas don’t change with the weather. A rainy Saturday can give you the deal volume of a weekend with the calm of a weekday.
Holiday sale weekends (Memorial Day, Labor Day) are marketing events first, deals second. The pricing is often available any other time. The Tuesday after a holiday weekend can be a hidden gem — the promotions sometimes linger, but the crowds are gone.
Model year changeovers (August-October) are when dealers most need to clear outgoing inventory. Stack that timing with end-of-quarter pressure and you’ve got real leverage going in.
Frequently Asked Questions
Is it better to buy a car on a weekend or a weekday? It depends on your situation. Weekdays offer a calmer environment and more manager availability. Weekends bring more pressure but also higher dealer motivation to close — especially on Saturdays when sales spiffs are common. A prepared buyer can do well on either day.
What is the best day of the week to buy a car? Tuesday through Thursday mornings offer the lowest pressure and most attentive service. But Saturday mornings before 10 AM can also be effective if you arrive prepared and understand how to use the dealer’s closing motivation to your advantage.
Is it better to buy a car at the end of the month? Yes. The last week of the month — particularly the final Tuesday, Wednesday, or Thursday — is when dealers are pushing hardest to hit quotas. End-of-quarter deadlines (March, June, September, December) add even more pressure in your favor.What should I bring to a dealership? At minimum: a pre-approval from your bank or credit union, documentation of your trade-in value, and research on fair market pricing for the vehicle you want. Tools like CarEdge’s Deal Finder can help you walk in knowing exactly what the car should cost.
How much should you spend on a car? Follow the 10% rule
If you’ve ever been anxious about car buying, you’re not alone. Vehicle ownership is a major financial commitment. With this in mind, how much of your monthly budget should you spend on a car? Today, we’re going to answer that question with the 10% rule.
You’re likely to find many different opinions on how much you should spend on a car. Truthfully, there is no perfect answer. At the end of the day, you have to make a decision that you feel comfortable with.
That being said, we do have some advice we’d recommend you follow. We’re here to help you learn about the 10% rule, and how it helps you determine how much you should spend on your next car.
Assess your financial situation
First things first, to determine how much you should spend on a car, you need to assess your financial situation. This means auditing your monthly gross income. How much gross (before taxes) income do you make each month?
I say monthly income on purpose, because most car buyers are shopping for a monthly payment that meets their budget. This is as good a time as ever to mention that if you can afford to buy a car in cash, and you intend to keep it for decades, please do that. However, make sure to do it the right way (we go over the details here). Paying cash is the most financially responsible car buying decision you can make.
Having said that, most of us aren’t in a position to pay for a car in cash upfront. If that’s you, then start this exercise by analyzing your monthly gross income.
Write that number down, we’re going to come back to it.
First, ask yourself “why” you need a car
Are you buying a car because you need transport from point “a” to point “b,” or are you getting a car to make a statement?
When I worked at an Acura dealership in the early 2000’s, a customer came in and purchased an Acura RL in the top trim. This was an expensive and luxurious car. The same day this customer took home his new car he came back. Why? Because his wife wanted him to buy a Lexus instead. To her, the Acura didn’t portray the image she wanted to her neighbors.
In this case, the “why” behind purchasing a car was to make a material statement, not to simply get from point “a” to point “b.”
If you’re trying to make a statement, it’s my strong recommendation you figure out a cheaper, more fiscally responsible way to make that statement. Consider buying a watch, a house, a painting … literally anything other than a car. Cars simply lose value too quickly.
Factor in all cost of ownership expenses
Buying a car entails a lot more than making a monthly car payment. Insurance, gas, maintenance, depreciation, the list goes on and on. If you’ve ever owned a car before, you know just how expensive it is. Plus, insurance costs are rising quickly.
That being said, it’s critically important to consider the total cost of ownership when thinking, “How much should I spend on a car?” Your monthly car payment should include:
- The lease or loan payment
- Insurance
- Maintenance
- Wear and tear
When you factor each of these items into your monthly car payment you see that a $500/mo car payment is actually $1,000/mo. And this is where the 10% comes in. I’ve always advised all of my customers to spend no more than 10% of their gross income on their car.
That means that if you make $60,000 per year ($5,000 per month), you can aim for up to $500 per month to go towards your car payment. That doesn’t mean you can afford any car that has a monthly payment of $500, it means the combined cost of the payment, the insurance, and maintenance all needs to be under 10% of your gross income, or in this example, under $500.
Some personal finance gurus suggest that you can afford to spend much more than 10% of your gross income on a car, and banks will even loan you the money you need to purchase a car so long as your debt to income ratio is below 40%.
The 10% rule isn’t a commandment, it’s simply a suggestion. Spending more than 10% of your monthly gross income on a depreciating asset is a tough pill to swallow, but for some it’s worth it.
Consider leasing instead
If you drive less than the average driver each year, I highly recommend you consider leasing a car instead of buying. This is especially advised for those who prefer to upgrade to a new car every few years or so.
Leasing has some distinct advantages compared to purchasing; mainly, you know exactly what you are signing up for. The cost of depreciation and maintenance are built into the lease, whereas when you buy a car outright neither of those factors are known.
The 10% rule also applies to leasing. For example, if my monthly income is $4,000, then my next Mini Cooper lease should be under $400/month since I’ll have to factor in insurance and gas costs.
Leasing allows for a certain level of cost certainty since most lease terms are in the 24 to 36 month range, and cars are under warranty for most (or all) of that time. Some brands even include free scheduled maintenance during your lease term, essentially making the monthly payment and the cost of fuel and your insurance premium your total car expenses.
Trust me, cost certainty is a huge advantage for drivers. Once you experience it, you’ll wonder how you ever lived without it.
A car is NOT an investment!
Ultimately, how much you spend on a car comes down to how much money you are willing to set aside on a monthly basis. Additionally, always remember that when you buy a car, it will lose value. Vehicles are not investments.
How do you play it smart then? My recommendation is that you follow the 10% rule. It’s fair, it’s reasonable, and it’s not overly constrictive. Plus, when you drive somewhere in your new car, if you follow the 10% rule, you’ll still have some money in your pocket to pay for things when you get there!
Ready for a car-buying expert to get YOU the best deal?
Questions to Ask When Buying a Used Car
Buying a used car can be a smart financial decision — if you ask the right questions. Pre-owned vehicles come with unique risks, from hidden damage to unclear pricing. That’s why it’s crucial to go into the process prepared and confident.
Use this guide to make sure the dealership (or private seller) is giving you the full picture. If they dodge any of these questions, consider it a red flag.
1. What’s the Out-the-Door Price?
Used car prices often vary by dealership, but the OTD price reveals the real cost, including taxes, fees, and dealer-installed accessories.
👉 Use our free Out-the-Door Price Calculator to compare offers.
2. How long has the car been on the lot?
The longer a used car sits, the more room there is to negotiate. A vehicle that’s been on the lot for 45–60+ days may come with bigger discounts.
📊 Use CarEdge Pro to check days on lot, supply, and local market pricing.
3. Can I see the vehicle history report?
A Carfax or AutoCheck report should be free and readily available. It reveals accidents, maintenance, and ownership history.
🚨 No history report = red flag. Walk away if they won’t provide one.
It’s important to note that if you’re buying a used car from a private seller, you may need to purchase your own vehicle history report. All you’ll need is the car’s VIN.
4. Can I get it inspected by my mechanic?
A Pre-Purchase Inspection (PPI) can uncover hidden mechanical issues that a dealer won’t mention. This step alone can save you thousands.
Pro tip: Always choose an independent mechanic who’s not affiliated with the seller.
5. Can I take the car for a test drive?
Used cars can vary greatly, even within the same make, model, and year. A test drive helps you catch mechanical concerns and ensure comfort. Drive on a variety of road surfaces at low and high speeds.
Take note: A test drive doesn’t replace the need for a pre-purchase inspection by an independent mechanic.
6. Is this car still under warranty? What coverage remains?
Used cars may still have factory warranty remaining or include a dealer-backed warranty. Ask for details, and if they’re selling you an extended warranty:
- Who is the provider?
- What’s covered and for how long?
- Is there a deductible?
- Does it include roadside assistance?
Compare to CarEdge Extended Warranty plans for full transparency. No markups, just clear coverage.
Additional Questions to Ask a Private Seller
Buying from a private seller can sometimes get you a better deal. However, it comes with more risk and fewer protections than buying from a dealership. That’s why it’s critical to ask the right questions up front.
Here are some additional questions you should ask a private party seller before agreeing to buy a car:
Reason for Selling and Ownership History
- Why are you selling the car?
Honest sellers will give a straightforward answer. Be cautious of vague or overly rehearsed responses. - How long have you owned the car?
Short ownership periods can be a red flag, especially if they can’t explain why. - Where did you purchase it? (state and seller)
This can impact emissions compliance and title status. Some states have stricter rules for used cars. - Are you the original owner?
If not, ask how many previous owners there were and if service records are available.
Title and Documentation
- Do you have the title in hand?
If they don’t, you can’t complete the sale legally. Also ask:
- Is the title clean, salvaged, or is there a lien on the vehicle?
- Is the title clean, salvaged, or is there a lien on the vehicle?
- Do you have a CarFax or AutoCheck report?
While it’s not legally required in private sales, any reputable seller should provide one or allow you to pull it yourself. - How many sets of keys come with the car?
Replacing lost or missing keys can be expensive.
💡 Pro Tip: Bring a printed bill of sale template and ensure both parties sign it. Also, double-check your local DMV requirements for title transfers and taxes before finalizing anything. See some examples here, but always ensure that all required fields are on your form.
Tired of Car Buying Games? Let Us Handle It
Buying used doesn’t mean buying blind. Let CarEdge’s car buying service do the legwork:
✅ We find the best pre-owned vehicles
✅ We negotiate pricing and review contracts
✅ We coordinate inspections, delivery, and paperwork
Learn more about how CarEdge can help.
About CarEdge
CarEdge is your trusted partner for smarter used car shopping. We provide expert tools, unbiased insights, and negotiation support — so you never overpay. Start your car search at CarEdge.com and take control of your next purchase.
Monroney Sticker Explained by a Former Car Dealer
Understanding what’s on a new car’s window can save you from overpaying or falling for dealer tricks. If you’ve ever heard the terms Monroney sticker or window sticker and felt confused — you’re not alone. These labels are crucial for transparency when buying a car, and every buyer should know what to look for.
In this guide, we’ll break down what a Monroney sticker is, why it exists, and how to read it. You’ll leave feeling more confident and equipped to understand what a car really includes — no matter what a salesperson might tell you.
What Is a Car’s Monroney Sticker?
Before car buyers had access to standardized pricing, buying a car was like walking into the Wild West. Salespeople could pick and choose what to tell you — and what to charge.
That all changed with the creation of the Monroney sticker, a federally mandated label that must be displayed on every new car for sale in the U.S. You’ll also hear it referred to as the window sticker — they’re the same thing.
This label lists everything a shopper needs to know about the car’s equipment, price, and origin. It was designed to protect buyers and level the playing field.
Only 9% of Americans say car salespeople have high ethical standards — the lowest of any profession according to Gallup. That’s why federal law stepped in.
Here’s what’s included on every Monroney sticker:
- Where the car was built, including a breakdown of parts by country of origin
- Warranty coverage
- Engine and drivetrain specs
- Manufacturer-installed options and their prices
- The Manufacturer’s Suggested Retail Price (MSRP)
- Official EPA fuel economy ratings
- Government crash test ratings
Check out an example of where you’ll find this important information:
📌 Important: Dealer-installed accessories (like pinstripes, floor mats, or nitrogen tires) are not listed on the Monroney sticker. They appear on a separate dealer addendum sticker, which is not federally regulated.
Why Is It Called a Monroney Sticker?
The name comes from Senator Almer “Mike” Monroney, who sponsored the Automobile Information Disclosure Act of 1958. Signed into law by President Dwight Eisenhower, the act required automakers to include standardized labels on all new cars.
Before this law, car buyers had no way to verify what was included in a vehicle or whether the price was fair.
Monroney was a leader in consumer protection and also played a role in creating the Federal Aviation Administration (FAA). His legacy lives on every time you look at a new car’s window sticker.
Want to learn more about the law? Visit the Consumer protection Branch at the U.S. Department of Justice.
What’s Included on a Window Sticker?
Let’s recap what you’ll find on a new car’s Monroney (window) sticker. This information is required by law and cannot be altered or removed by dealers:
- Final assembly location and parts content by country
- Basic warranty coverage and powertrain warranty
- Engine specs, drivetrain, and transmission type
- List of factory-installed options with individual pricing
- Total MSRP, including destination fees
- EPA fuel economy estimates and annual fuel cost projections
- NHTSA crash test ratings, where applicable
💡 Tip: If you don’t see this sticker on a new car, ask why — and consider walking away.
How to Read a Car’s Window Sticker
So you’re standing on a dealership lot — where should your eyes go first?
The Edmunds guide to reading a window sticker is an excellent visual breakdown. You can view it here, but here’s a quick summary:
- Top Left: Vehicle info (make, model, VIN, color, final assembly location)
- Top Right: Fuel economy, emissions, and fuel costs
- Middle Section: List of standard features and optional equipment
- Bottom Line: Total MSRP with itemized pricing
- Bottom Right: Parts content, country of origin, and government safety ratings
Why the Window Sticker Matters More Than Ever
In today’s car market, dealer markups and confusing add-ons are everywhere. But the Monroney sticker keeps it real — it’s the one label they can’t legally change.
When you’re comparing similar vehicles across different dealerships, the window sticker helps you:
- Spot pricing differences
- Avoid duplicate charges for options
- Compare warranties and specs side by side
- Uncover where the car was truly made
Want to See the Window Sticker Without Going to the Dealership?
Whether you’re shopping used or just want to do your research from home, you no longer have to visit the lot to see the original window sticker. CarEdge now offers access to digital Monroney stickers on most vehicles — giving you instant insight into the car’s features, options, and MSRP breakdown.
✅ Great for used cars that originally included premium options
✅ Helps compare trim levels and original pricing
✅ Saves time and reveals red flags before you visit the dealership
View the original window sticker — and shop smarter from the start.
FAQs About the Monroney Sticker
Q: Is a Monroney sticker required by law?
A: Yes. Every new car for sale in the U.S. must display a Monroney sticker — it’s federal law.
Q: Are Monroney and window stickers the same thing?
A: Yes. These two terms refer to the same federally required label.
Q: Can dealers alter or remove the Monroney sticker?
A: No. It’s illegal for dealers to modify or remove the sticker prior to sale.
Q: Does the window sticker include dealer add-ons?
A: No. Only manufacturer-installed options are listed. Dealer-installed accessories appear on a separate sticker.
Q: Do used cars have a Monroney sticker?
A: No. The law only applies to brand-new vehicles. However, used vehicles may have copies of the original sticker or digital replicas provided by the dealer.
About CarEdge
Founded by industry veterans, CarEdge is your trusted resource for transparent car buying. From understanding pricing to negotiating deals and avoiding scams, we provide data-backed insights, expert tools, and concierge services to help you buy with confidence.Want help with your next car purchase? Let us find and negotiate the best deal for you! Explore CarEdge’s car buying help today.
