Looking for MSRP vs invoice price comparison information?
Keep reading to learn more about the differences and some ways you can get a better price on your next purchase.
Everyone likes to think they got the best price possible on their latest car purchase. Feeling like you aced the negotiation will make you feel better as you drive off the lot with your car.
However, how do you really know if you got the best deal on your new car? Understanding the difference between MSRP vs invoice pricing can help you negotiate for the best price for your car.
MSRP vs Invoice –> What is MSRP?
MSRP is the suggested retail price from the manufacturer. This is also known as the sticker price.
MSRP -which stands for Manufacturer Suggested Retail Price- is simply what the car is worth on the open market. At least what the company thinks it is worth.
However, it is important to understand that this not what the dealer pays for the car nor what all car buyers must pay for the vehicle.
It is important to know that you are giving the dealer extra profit if you fail to negotiate the price to something below the sticker price.
MSRP vs Invoice –> What Is Invoice Price?
The invoice price is the wholesale cost of each car that you see in the showroom. Dealers generally get discounts off the wholesale price of the car. Invoice is generally $2,000 or so less than the sticker price.
This is why dealers are open to haggling on the price of the car. Keep in mind that a car that is high demand may cost more to the dealer which eliminates a lot of haggle room.
There have been situations where dealers have increased the price of a car in high demand to far above retail though so in certain situations that should be kept in mind.
The thing is that generally if a dealer is able to do this there are enough other eager buyers that you probably won’t be able to convince them to sell at a far lower price point.
Other Fees Related To Buying The Car
Other fees may be associated with purchasing your new car. Some dealers are going to charge you a destination fee on your vehicle. This is the cost of actually bringing the car to the dealer from the factory. Destination charges are usually not open for discussion.
Other dealers may not pass on all of the factory rebates that they receive. These discounts typically add even more profit for the dealer. It is another reason why you should hold firm when negotiating a final purchase price on your vehicle.
Patience Can Get You A Lower Price
Negotiating a lower price on your car is easier to do when you are patient. Never go to a dealer if you are not able to wait on a car purchase. This means you shouldn’t head straight to the dealer after your old car breaks down. Borrow a car if you can for the time being.
Patience helps you because the dealer is going to do everything they can to make the sale. The salesman is mostly concerned with his commission. He is not going to let a few hundred dollars get in the way of his getting paid.
Bring A Trade-In
Having a car to trade in can lower the cost of your new purchase. Looking up the value of your used car is as easy as a Google search. Many sites are willing to appraise your used car.
Going online can also help you determine the MSRP vs invoice cost of most new cars. Negotiating the value of your current car is also something that can require patience. Holding out on a deal for an extra day or two can get you maximum value for your trade.
When Should You Consider Buying A Slightly Used Car
New cars can be quite expensive. However, a used car could be within your price range.
You might be thinking that a used car is going to be some old rust bucket that is going to break down on you. This is not always the case with a used car.
Used cars are defined as anything that is not part of the new model year.
Even a car that has not been owned is generally labeled as used if it is part of an old model year. Waiting until the new model year can save you thousands of dollars on what is technically now a used car.
For example, holding out until the 2013 model year cars roll out could get you a 2012 model year car for closer to invoice cost. Dealers are simply trying to get cars off the lot at this point.
Knowing the MSRP vs invoice price on a new car helps you negotiate from a position of strength. The dealer is less likely to negotiate as hard if you know how much the dealer actually paid for the car.
At the very least, you can get the dealer to drop the price a little bit further than they are willing to go. Remember that it is in your best interest to be patient whenever you are buying a car. You always gain leverage in negotiations when you are willing to hold your ground or walk away from a potential deal.
For more about buying new and used cars check out the MSRP vs Invoice blog page right here…Happy shopping!