How it is computed
Invoice price less holdback is the store's true cost on a new unit, before any other manufacturer money. The deal is figured at invoice, so the holdback never appears on the salesperson's commission sheet; it arrives from the manufacturer after the sale and is added to gross under additions or manufacturer payments on the statement, where it joins the volume bonuses and program money that make the new department whole. It is gross; the open question in every store is who is paid on it.
Why it matters
It is why a new car "sold at invoice" was not sold at cost. The holdback is the floor under new-car gross that the floor rarely sees, and it is on every new car the store delivers.
It is why new-car departments are read differently from used. New front gross is often structurally thin by design, and the manufacturer payments, holdback first among them, are where the department earns its keep.
How operators read it
- Read the new department with its manufacturer payments beside it, never from front gross alone. The same department can look like a loss or a profit center depending on whether the additions line is in view.
- Read holdback with the rest of the manufacturer money: volume bonuses, program money, and the like. Holdback is the predictable piece, the same on every unit of a model; the programs are the ones that move.
- Do not let it excuse the desk. Holdback arrives on every unit regardless; the gap between a disciplined desk and a loose one on new cars shows above it.
- Ask the pay-plan question before you read a manager's number. A general manager paid on gross including holdback and one paid on gross without it are looking at two different months, and so are you.
Questions people ask
Is holdback the same for every manufacturer?
No. Each manufacturer sets its own holdback, and the amount varies by franchise and by model. Know your franchise's terms rather than assuming a percentage.
Are managers paid on holdback?
Sometimes. It is added to gross, and whether the general manager or the desk is paid on that gross is a pay-plan decision that differs store to store. It takes a question, asked once and written down; the salesperson almost never is, because the deal is figured at invoice.
Read it with the numbers it moves
This is vocabulary, not a measure A.D.A.M. computes: it changes how the store books and reads the numbers he does compute. Front gross per unit, PVR, and net to gross all shift with it, which is why it is defined here. What an AI advisor should do, and refuse to do.