Holdback
Definition for canada automotive professionals.
Holdback is an amount paid by a vehicle manufacturer to a dealership after a vehicle is sold. Typically calculated as 1–3% of MSRP (or base invoice), holdback is paid quarterly and represents a hidden profit cushion that exists even when a dealership appears to sell a vehicle at or near invoice. Holdback is separate from dealer incentives, factory-to-dealer cash, and customer rebates. Understanding holdback is important for calculating true vehicle cost and evaluating front-end gross on specific deals.
Canada Context
In the canada dealer market, holdback operates within the context of Provincial dealer licensing (OMVIC, AMVIC, SAAQ, VSA) and Competition Act — transparent pricing. Dealerships running PBS Systems, Quorum DMS, CDK Canada encounter holdback in their daily workflow. DealerInt captures the decision layer around holdback that your DMS wasn't designed to track.
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