With plenty of different pricing figures floating around for new vehicles, knowing which ones are the most important is helpful. Understanding MSRP vs. invoice pricing can help save you thousands of dollars at the dealership.
MSRP
MRSP stands for “Manufacturer’s Suggested Retail Price.” This is a suggested price that the manufacturer sets as a guideline for what the new vehicle can be sold for. The MSRP can easily be found on the list price sheet in the window of a new vehicle, usually.
Dealerships are not required to sell vehicles at the MSRP. Once a dealership purchases a new vehicle from the manufacturer they are free to adjust the price as they see fit and often they will raise the price higher than the MSRP because they want to earn as much profit as possible.
If a dealership does tell you the manufacturer’s suggested retail price for your new car or truck, they usually discuss it along with add-ons so that they can throw more money into the pot. This allows them to start negotiations out at a higher pricel.
Invoice Price
The invoice price is the actual cost of the vehicle. While the MSRP reflects what the dealership might sell the new car or truck for, the invoice price reflects what the dealership actually paid for it.
Dealerships are offered discount prices from the manufacturers because they buy in bulk amounts directly from the factory. These invoice prices are often as close to the sale price as the MSRP is. In other words, the price you pay for a car often falls between MSRP and invoice price. Occasionally, you can get a car for less than the invoice price!
Why it Matters
When purchasing your new vehicle you should stay focused on finding the price that the dealership paid for it, which is the invoice price. The fastest way to uncover invoice pricing is by requesting a free, no obligation price quote for your new car or truck. Request a quote and you will receive the Buying Advice Team’s Insider Report for New Car Buyers. The report is a valuable resource and guide for drivers in need of vehicles. Click here to get your quotes and resources.
