Dealer Holdback

Dealer holdback is a manufacturer payment to the dealer, typically a percentage of MSRP or invoice, paid quarterly after new vehicles are sold. It is not reflected on the Monroney label or invoice and reduces the dealer's true cost below the stated invoice price.

Holdback provides dealers margin flexibility to sell at or near invoice while still maintaining profitability. It is one component of new vehicle economics that dealers should factor into gross analysis and flooring cost calculations when managing new unit profitability.