Understanding the differences between invoice price vs. MSRP is essential when you are preparing to purchase your new vehicle. There are countless different prices that can be quoted for a single vehicle; you need to know which prices to focus on.
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Invoice pricing and the MSRP are usually the lowest values you will find for a new vehicle. It is always smart to research these prices before visiting the dealership.
These two prices can be up to thousands of dollars less than the sticker price. However, the difference in price between the MSRP and invoice price can also be hundreds or even thousands of dollars. Knowing how to distinguish between these two prices can save you a large amount of money.
The invoice price of a vehicle represents the amount a dealership pays for it. Dealerships buy their vehicles in bulk amounts directly from the factories that build them. As a result, the manufacturer is able to offer the dealerships discounted pricing on the fleet of new cars.
This discounted price is the invoice price. Out of all prices, the invoice cost best represents the true value of a vehicle. As a buyer you should try to pay as close to invoice price as possible.
The MSRP or “manufacturer’s suggested retail price” is a value issued to each car by the manufacturer. As the name suggests, this is a suggested price and not an actual price that has to be used. Manufacturers label each car with an MSRP to give dealerships an idea of what they should charge for that vehicle.
To determine this price the manufacturer considers how much it cost to build the vehicle and destination charges to get the vehicle to the dealership. The manufacturer also factors in a certain amount that allows the dealership to make a profit on the sale of the vehicle.
This extra amount that the manufacturer adds to the cost of the car is what makes the MSRP different from the invoice price.
To find real time dealer pricing, MSRP, and true invoice prices request a free, no obligation price quote. Use your knowledge of the differences between prices to pay the lowest amount possible for your new car or truck.
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