What is MSRP?

Hands Holding Car and Money

If you’re familiar with dealerships and shopping for a new car in Bay Shore, you’ve seen MSRP attached to the vehicle price, but what is MSRP? MSRP, or Manufacturer Suggested Retail Price, is the price recommended by the manufacturer for a dealership to sell a vehicle. The list price is another term for MSRP, and it is determined by the manufacturer based on various factors, including the popularity of the vehicle in the market and the materials utilized to produce it. Learn more about the MSRP meaning and the difference between MSRP vs. invoice at Habberstad BMW of Bay Shore.

MSRP Meaning

When you’re looking up information on the BMW 3 Series or the all-electric BMW i7, you’ve likely seen MSRP next to the listed price. MSRP is the price that is recommended by the manufacturer that dealerships should sell the vehicle at. Here are a few notes that can help you understand the MSRP meaning:

  • Since the price is set by the manufacturer, the same MSRP for the vehicle will be listed across all dealerships in the Babylon area and across the country.
  • While the MSRP is the same for each model in the vehicle lineup, the suggested retail price varies with each vehicle. That means sedans by the same brand can have a different MSRP from each other.
  • The MSRP can easily be found on the manufacturer’s website or the dealer’s website. The price listed can be used to negotiate the price of a new vehicle when a model has caught your eye.

What Determines MSRP?

Now that you know what MSRP is, what goes into determining the manufacturer price?

  • The MSRP reflects the base price of the vehicle without any additional features or accessories.
  • As the vehicle adds features and configurations, the cost of the vehicle rises accordingly.
  • Although the manufacturer recommends the sale price, it may not be the price the dealership chooses to sell the vehicle at.
  • The dealership can choose to raise or lower the price based on the invoice price. The invoice price is the price the dealership paid for the vehicle.
  • The popularity of a vehicle can also affect its sale price. It’s more common that a popular model will be sold at a price closer to the MSRP compared to a less popular model that is sold at a discount.

What is MSRP vs. Invoice Price?

The term “invoice price” can be commonly heard at the dealership, so what’s the difference between MSRP vs. invoice price?

  • The term “invoice price” (or sometimes called “dealer price”) refers to the price that a dealer pays to the manufacturer
  • MSRP is the “sticker price” that you pay to the dealer

Negotiation is common when buying a new car. MSRP is the “suggested” retail price and knowing the MSRP vs. invoice price can be helpful when settling on a fair price.

Negotiating a Fair Price

The MSRP may be the price the manufacturer recommends for the vehicle, but it is not the price you have to pay for a vehicle.

  • Take the time to look into what other drivers in your area paid for the same model on sites like Kelley Blue Book, Edmunds, or Cars.com.
  • Begin the negotiation at a price lower than the MSRP and work your way up. Be sure to factor in the cost of any additional features and performance capabilities you need for West Islip drives.
  • Dealers are not obligated to show you the car’s invoice price, but they may share it if you ask. Knowing the invoice price can help you determine where to start your haggling.
  • Get an idea of the vehicle price at several dealerships in the area until you find the price that fits your budget.
  • Even if you plan on leasing, you can still negotiate the MSRP to find a price that’s right for you. From there, the dealer will agree on monthly payment costs.

Shop for a New Vehicle at Habberstad BMW of Bay Shore!

Understanding the MSRP meaning can help you find the right price when shopping for a new car. In addition to your negotiating, save on the model you love by valuing your trade and exploring our new vehicle specials. If you have any questions, don’t hesitate to contact our team at Habberstad BMW of Bay Shore.

 

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