What Is MSRP?
Commonly referred to as the sticker price, MSRP stands for Manufacturer’s Suggested Retail Price. It’s the price the manufacturer suggests the dealer sell a car for. The MSRP may also be referred to as the car’s recommended retail price, suggested retail price, or list price.
Is Sticker Price the Same as MSRP?
Yes. It’s called a sticker price because federal law requires that dealers post a document somewhere on the window or windshield that contains the car’s MSRP. That document, which details the cost breakdown of the car’s features, is called a Monroney sticker. It’s named after Senator Mike Monroney, who sponsored the bill requiring dealers to disclose pricing information on new cars.
A vehicle’s MSRP is typically the starting point in your price negotiations with the dealer, as it’s higher than the invoice price, the amount the dealer paid the manufacturer for the car.
Buyers should also be aware that dealers can get other incentives from automakers that reduce the price of the cars they buy. Car dealers can get bonuses for hitting sales goals, which helps reduce the cost for new vehicles.
Negotiating on MSRP to Get a Lower Price
Dealers are usually willing to reduce the selling price of a car below its MSRP by offering discounts, cash-back rebates, or other promotions. However, the dealer may be unwilling to drop the price below MSRP for high-demand or limited-edition models.
What Is a Destination Charge?
A destination charge is a fee that an auto manufacturer charges the dealer to deliver the vehicle from the factory to the car dealership. Dealers pass on this fee to their customers, and it is usually not negotiable. The destination charge is not included in the MSRP.
A destination charge is sometimes called a delivery charge, freight charge, or transportation fee.
MSRP and Used Cars
How does a car’s original MSRP affect its price once it becomes used? The original MSRP plays a role when determining what you’ll pay for a used car, but several other factors also weigh in.
Carfax determines the value of a used car based on its history. With our History-Based Value tool, Carfax looks at factors including the:
Number of previous owners
Accident history
Service and maintenance history
Recalls
Year, make, and model
Standard and optional features
The price you’ll pay for a used car may also depend on how it was previously used. A vehicle may have experienced more wear and tear as a rental car operated by multiple drivers compared to a one-owner car. How the car was treated and who drove it can directly impact its value and, ultimately, how much you will pay for it.
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