Shopping for a new or used car can be challenging when a lot of unfamiliar terms and phrases are being thrown at you.
You might be asking yourself, “what’s this word, why do I need to know it, and what difference does it make in my car-buying decision?”
Knowing some of the pricing terms before you go car shopping will help you feel better about your purchase by knowing exactly where your dollars are going.
One of those terms is MSRP.
What Does MSRP Mean?
“The MSRP of this car is $40,000, but we’ll give it to you for $37,999!”
You’ve heard and seen the phrase time and time again in everything from television commercials to print ads, but if asked what it stands for, you may be at a loss.
And you wouldn’t be alone. So what does the abbreviation mean?
Manufacturer’s Suggested Retail Price
Put another way, it’s the amount that the manufacturers say the vehicle should sell for. They made it, so they should know, right?
But, as the term says, it’s just a suggestion. Ultimately, the dealer can sell the vehicle at any price.
Then What’s the Invoice Price?
This is the amount of money the dealership paid the manufacturer for the vehicle.
For example, the car mentioned above with an MSRP of $40,000 may have an invoice price of $35,000, meaning that’s how much the dealership paid to get it.
So if the dealership sells the car to you for $37,999, they’ve made a profit of $2,999.
And it’s well within your rights to try to negotiate the price down a bit, but don’t expect the dealer to go too far below the invoice price, if at all.
And the Base Price?
The base price is the vehicle’s price without any added trims or options, or the lowest price available for that vehicle.
Using the example above, a car with an MSRP of $40,000 may have a base price of $33,000, meaning there are $7,000 of added extras on that particular car.
So there you have it. When shopping for a new or used vehicle, it helps to know the MSRP, invoice, and base prices so that you know exactly what you’re paying for. Don’t be afraid to ask any questions about pricing – this is your hard-earned money being spent.
Know that the staff at Bryant Motors understands this and we welcome your questions. If you’re ready to shop for a new or used car, stop by or check out our online inventory today!