Buying a car is a lot different than buying a jar of peanut butter at the supermarket. Most items we use every day have a fixed price, and the price mentioned on the label is what you pay. But, when shopping for a car, this is not the case.
Every car has an MSRP (Manufacturer’s Suggested Retail Price) that acts as a starting point for what you end up paying. Contrary to that jar of peanut butter, you might be able to spend less when buying a car. Why is that? What does it really mean? Here are the answers:
● What Does MSRP Mean?
MSRP or recommended retail price is the price of the vehicle initially recommended by the manufacturer while selling a car. The price is set to give manufacturers, dealers, and other intermediaries the benefit of profit. However, as the term suggests, it’s only a suggestion or recommendation – confirmed sale prices can be lower or higher.
For instance, if you are looking to buy a used Chevy truck, the recommended retail price you would find by the manufacturer will be a lot higher than the amount set by a used car dealership. So, when looking for used chevy trucks for sale, make sure you compare MSRP with the price set by a used car dealership selling you the same model. You will most likely find a considerable price difference, which might act in your favor.
● Can a Buyer Negotiate Off MSRP For a Car?
Bear in mind that the recommended retail price is only a suggestion. It’s up to you to make a suggestion back to the seller and negotiate down the price that is more favorable to you. A rule of thumb is, the more expensive a car is, the more you can negotiate. Take a close look at the dealership and see how many same car models are there. Higher availability indicates a surplus, while a limited lot of that model means the vehicle is in demand.
It’s also a good idea to get offers from different dealerships. As a result, you can use those offers as a source to influence the recommended retail price. Next, make sure you get an idea of the dealer’s invoice price and use it as a starting point for negotiations. It’s reasonable to be firm in your offer, but don’t forget that the seller is there to make money – there is a set amount they will be willing to sell your car for.
● What Does MSRP Include?
A vehicle’s recommended retail price includes the set price and the prices of any packages, options, or extras your desired car is equipped with. However, features are usually listed out, stating whether they are included in the recommended retail price or considered additional costs. In most cases, the MSRP does not add any other accessories or service programs sold by the dealer, nor does it include any incentives. Fees and Taxes are not included in the recommended retail price – they relate mainly to the specific vehicle.
When you are looking to buy a new vehicle, you must be aware of the MSRP to make negotiations at the dealership. This knowledge will help you find the right car for you at the price you are willing to pay.