Rev Up Your Career with the 2025 Colorado Car Sales Practice Test – Hit the Gas and Ace It!

Question: 1 / 400

What is implied by the term "dealer holdback"?

Payment made by dealers to consumers after sale

A percentage of the sale price retained by the manufacturer

The term "dealer holdback" refers to a percentage of the sale price that is retained by the manufacturer after a vehicle is sold to a dealer. This amount is typically held back from the dealer’s payment for the vehicle, and it serves to help the dealer with cash flow and to incentivize them to sell the vehicle at the best possible price. The holdback is generally a percentage of the Manufacturer's Suggested Retail Price (MSRP) or the invoice cost of the vehicle and is paid back to the dealer after a certain period, helping to offset costs associated with inventory financing and promoting profitability. Understanding this concept is crucial for both dealers trying to manage their finances and customers negotiating the price of a vehicle, as it plays a significant role in the overall pricing structure within the automotive sales industry.

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A fee charged to customers for processing paperwork

A temporary suspension of sales due to law changes

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