Employee Pricing: Fact or Fiction?

You’ve probably seen the ads on TV. But is employee pricing really a good deal?

What is employee pricing?

Employee pricing, or sometimes referred to as invoice pricing among other naming conventions, offers a typically non-negotiable “invoice price” that reduces the MSRP (Manufacturer’s Suggested Retail Price) down to a point where the dealer is no longer making a profit margin. Sounds like a pretty sweet deal, right?

People usually want the rock-bottom price when spending big on a new car, but there are both pros and cons of employee pricing. Let’s walk through the different employee price discount offers and discuss if it’s really a promotion you should be taking advantage of. 

Here’s a breakdown of some of the main proponents of employee price discounts.

Ford Employee Pricing

Ford claims its employee pricing offer ensures you pay the same price that a Ford employee pays. The iconic auto company has been offering this promotion for 15 years, but it’s not a year-long incentive, so you’ll have to keep watch when it’s next available (usually in the summer). An example of Ford Employee Pricing would be a 2020 F-150 MSRP of $67,799 with an “invoice price” of $61,799 (what the dealer pays). With FEP, you might get 2% off the invoice price, providing over $7,000 in savings off the regular price.

GM Preferred Pricing 

Compared to Ford, General Motors is a little more selective with whom they offer the Preferred Pricing discount. You either have to be a Canadian employee of an eligible Preferred Pricing company or the spouse of an eligible employee. The Preferred Pricing deal is similar to Ford (2% below the invoice price), and the vehicle must be purchased from a participating dealer. This isn’t something you’ll see advertised by GM in their commercials, so it’s better you check with your employer to see if your workplace offers this particular perk.

FCA Employee Pricing Plus

Fiat Chrysler Automobiles (FCA), which includes popular brands like Dodge and Jeep, offers employee pricing discounts to eligible employees of affiliate companies similar to GM’s Preferred Pricing model. However, Employee Pricing Plus extends the availability of this deal so that all car buyers can essentially enjoy the discount. Employee pricing for a Dodge Ram for example can range to 5% below the dealer invoice price, plus a fee.

Hyundai Invoice Pricing 

The Korean auto giant doesn’t bother making their offer sound exclusive to employees. Hyundai will often advertise invoice pricing, which is essentially the same as employee pricing, giving you the same price the dealership supposedly pays for the car. 

Is employee pricing right for you? 

For better or for worse, employee pricing removes haggling from the buying experience. That will suit many customers just fine, as negotiating a lower price at a dealership is a daunting part of the car-buying process. But these promotions are only available at certain times of the year and for certain brands.

If you’re still undecided, here’s a more complete breakdown of the pros and cons of employee pricing.

Pros of employee pricing 

• If you’re a fan of the car manufacturer that is offering the promotion (Ford, GM, etc.), employee price discounts are definitely worth exploring.
• If the prospect of haggling or negotiating gives you a headache, employee pricing might alleviate that stress because you won’t feel compelled to bargain for a better price. 
• If your workplace is affiliated with an employee pricing program it could make the buying process more simple and streamlined. 
• It is sometimes possible to combine or “stack” an employee pricing incentive with other offers, such as low-interest financing.

Cons of employee pricing 

• Employee pricing is not offered by all manufacturers and does not cover all models, so the car you have your eye on may not be included in the offer.
• It is generally only available for the purchase of brand new cars, meaning you might need to spend more than you were hoping. 
• If you’re good at bargain hunting and striking deals, you might be able to lock down a better deal for yourself without employee pricing.
• Employee pricing is typically only available in the summer to make way for next year’s models. It means that you’d have to wait for the right time of year to take advantage of this discount. It also means that there’s a newer version of your brand new vehicle about to be released. 

How to get a great deal (without employee pricing)

Employee price discounts may only be available in summer, but there are plenty of other ways to find the right car at the right price. Follow these tips to ensure you find the best possible deal all year round.

1. Research the right car for you: Before you jump at the biggest discount you can find, first decide what kind of vehicle you need. Are you looking for a family-size model or a compact commuter car? Does it need to be rugged and winter ready or do you have your eye on a slick convertible? There are numerous attractive offers out there, but just because it might look like a great discount, doesn’t necessarily mean that it’s the best deal for you. Take some time to research the different types of vehicles available.
2. Get pre-approved: Getting pre-approved will streamline your car-shopping experience. With a pre-approval in your back pocket, you’ll know exactly what you're eligible for so you can narrow down your search to a specific price range. Canada Drives can help you get pre-approved online in a matter of hours and it only takes two minutes to apply.
3. Consider shopping pre-owned: While employee pricing is confined to brand new vehicles, it pays to remember that dealerships sell used cars too and there’s fantastic deals to be found in this market. The benefit of buying a used car from a dealership or online retailer is that you know the car has been professionally inspected and serviced. Furthermore, car dealers and online vendors rely on repeat business, referrals, and online reviews. Therefore, you can be confident that you’re getting a reliable vehicle. Typically, you won’t enjoy the same value for money with a brand new car, or the same peace of mind when you buy a used car in a private sale.
4. Pick your moment: Employee pricing events generally kick off in the late summer months alongside other promotional offers to clear lots and make space for next year’s models. But there are other opportune times to snag a deal, such as: 
• towards the end of the year. 
• towards the end of every month. 
• during slower days at the dealership (i.e. weekdays)
• During the off-season for your vehicle type (i.e. shop for convertibles in October)

Read more about the best times to buy a car here. 

5. Focus on raising your credit score: Traditionally, a good credit rating is your golden ticket when it comes to accessing the most attractive new car sale promotions. For example, 0% financing is typically reserved for customers with the best credit scores. Today, companies like Canada Drives can help you get approved for great deals regardless of credit. But in the long run, it makes good financial sense to work towards improving your credit score. Fortunately, any car loan you get approved for today can help you start building credit for tomorrow.

Shop confidently with Canada Drives

Canada Drives can connect you with lots of great car deals without the dealer fees. Get pre-approved today or shop hundreds of certified vehicles online. Get started!