What is MSRP?
This is part of our Car Buyer's Glossary series breaking down all the terms you need to know if you're buying a new or used car from a dealership.
When shopping for a new car, you'll likely run across the term MSRP in reference to pricing. In fact, MSRP is an abbreviation for «manufacturer's suggested retail price.» It's an apt name, as it is simply the price that the manufacturer suggests the dealer asks for the car. It's also referred to as the sticker price. You'll see it on the Monroney (aka window sticker) while perusing any dealership shopping for cars — it's the law to have it there.
However, the dealership doesn't have to charge that price at all and in fact rarely does. It's only «suggested,» after all. Most of the time buyers will drive away having paid less than the MSRP lists, but the dealership can also mark the price up when there is heavy demand for a particular car. Historically, this has meant recently introduced cars that have captured the attention of car enthusiasts or even the general public. However, supply shortages can lead dealers to mark up even relatively mundane new cars, as happened during the COVID-19 pandemic.
This price is determined by a manufacturer by adding up the base price, destination charges and options on the car. The base price is typically what the car costs without any of the aforementioned charges included. Put everything together, and you'll be looking at the MSRP.
No. Remember, the «S» in MSRP stands for suggested. It's basically a starting point for negotiations
The MSRP, also known as the sticker price, is most likely the biggest factor in what you end up walking out the door paying. Of course, you can negotiate a cheaper price if the dealer is willing to negotiate. Dealerships will always try to get you to pay that full MSRP, but more times than not, a deal is struck below said value.
No. Sales tax and registration fees are not included in the MSRP. If there is a gas guzzler tax on a particularly inefficient car, however, that will be included in the sticker price.
The invoice price is the amount the dealer pays to the manufacturer, which is usually hundreds or thousands less than the MSRP. The difference between
