Manufacturer’s Suggested Retail Price — also known as “sticker” price – is basically a recommended selling price that automakers give a new car. The MSRP is used by dealerships as a price to sell vehicles and is different from invoice price.
MSRP isn’t a set-in-stone figure — hence “suggested” — and you can often negotiate the selling price. In turn, dealers aren’t obligated to sell a car at this price, either, and depending on demand and availability of the vehicle in question they can adjust their selling price. When dealerships mark up a hot new car it can sometimes inflate the price thousands of dollars above MSRP.
You may be asking, “Then what should I pay for the car?” Cars.com’s Smart Target Price takes MSRP, invoice, demand and availability into consideration and will give you an idea of where to start negotiations. We list the Smart Target Price when you build a new car at Cars.com, as well as in our Side-by-Side Comparison tool.
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Tony,
That's what Cars.com's Smart Target Price does. We show invoice, MSRP and a SMTP that takes into account what each model is selling at (not including cash back offers) and adjusts the price accordingly.
I just want to comment that I think it's unreasonable to expect dealers to sell cars at cost. We don't expect Best Buy to sell LCDs at cost yet we want car dealers to make less than Best Buy makes on a $1,000 TV. If you really knew what the markup was in things you would shocked. Often, it's at least 100% if not double or triple. Think of a fountain soft drink that costs McDonald's $.04 to make yet you pay $1.59 for. We don't go into McD's and offer $0.59 even though they'd still make a huge profit and the sale.
On the flip side, we all berate dealers as having bad service and being rude...how would you react to someone coming in and yelling at you for another $500 off your house or some other product you were selling? You'd get pretty rude pretty fast. If you pay full price for something you should expect better service, and dealers will typically bend over backwards of you let them make a profit.
So, the point is. If you want to haggle and argue don't expect gold-standard dealer service. You really do get what you pay for.
LM
Not true.
I paid close to MSRP for my car and let them rip me off on the accessories. Yet, they are still being a--holes to me.
Hi Everyone,
You can pretty much write off LM's comments as he's obviously a dealer owner or car salesman. Yes, dealers deserve a profit on their service, however, they don't deserve the right to rip you off and deceive you. Assume they get the car between 5 and 10% off invoice. I start negotiations at 5% off invoice and work from there. AND, if I bought $50000 worth of pepsi soda from McDonalds I WOULD be haggling them. Don't compare apples and oranges LM.
Tata,
Skip
Hi Everyone,
You can pretty much write off LM's comments as he's obviously a dealer owner or car salesman. Yes, dealers deserve a profit on their service, however, they don't deserve the right to rip you off and deceive you. Assume they get the car between 5 and 10% off invoice. I start negotiations at 5% off invoice and work from there. AND, if I bought $50000 worth of pepsi soda from McDonalds I WOULD be haggling them. Don't compare apples and oranges LM.
Tata,
Skip
You are all right in a way. I do sell cars and the whole issue is trust. Selling a car cheap is never a problem if you ask for it. However the issue usually is trade. If you expect a wholesale price for the car you are buying expect a wholesale price for the car you are tradeing in. Remember you can buy a car anywhere. Find a dealership you like and a saleman you can trust. Skip, lots of people have bought $50,000 of coke from mcdonalds they just don't know it. I agree with compareing apples to apples though. In the end salesmen don't mind a smart customer. They are usually an easy sell.
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I today's economy you can easily get most cars for invoice price minus all factory rebates and discounts.
Really, if you can dig somehow info of how much dealer paid for a car or what his manufacturer bonuses for selling it are (which is almost impossible to get unless you have inside info), you can offer dealer some money on top of that and prove to them that sellin one to you for less then usual is still better then not selling one in general.
But all of the above doesn't apply to some models