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What Is MSRP?


Unfolding MSRP

MSRP stands for the manufacturer’s suggested retail price. As the name indicates, it is the price that the manufacturer recommends that dealers charge for the vehicle, plus any options or packages. Note that MSRP is just a suggestion, meaning that the dealership is within its rights to charge more or less than this starting figure.

Car buying has a language of its own, and MSRP is one of many car pricing terms you’ll encounter at a car dealership, which include invoice price, sticker price, destination fee and more. It is important to understand the meaning of these pricing terms if you want to get the best deal

Is MSRP the final price?

Not usually. The final price of a vehicle is affected by its market value and what the dealership wants to charge for it. This means some vehicles will sell for less than MSRP, and at other times, dealers may hold the line at MSRP. The MSRP can be the starting point for negotiations, but if others are paying higher prices, it might be a time when paying the sticker price is acceptable. However, if the vehicle is in high demand — think of a brand-new or redesigned model — transactions well above MSRP are not uncommon. But keep in mind that MSRP is just one component of the final selling price, which also includes the destination fee, sales tax, registration, interest charges and more. This total is often called the “out-the-door price,” which should be the actual final price.



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