What is MSRP?

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Are you shopping around for your next vehicle in the Phoenix area? While researching models, you’re probably going to see prices listed with “MSRP” at the end. What does MSRP stand for? MSRP is an acronym for “Manufacturer Suggested Retail Price.” The deeper MSRP meaning is that it’s the price at which the original manufacturer of a particular vehicle suggests dealerships should sell that vehicle for. However, Glendale dealerships don’t have to follow the MSRP and may set their own prices. 

A Closer Look at the MSRP Meaning

You now know that MSRP is what a vehicle’s manufacturer recommends dealerships should sell it for, but if new car dealerships in Tempe aren’t necessarily following the MSRP, how can you purchase your next vehicle while feeling confident in the price you pay? Keep these tips in mind:

  • The MSRP for any one vehicle doesn’t vary between dealerships. A vehicle delivered to a dealership here in Arizona will have the same MSRP as the identical vehicle delivered to an Eastern or Midwestern state dealership.
  • The MSRP for a particular model will remain the same, but different vehicles from a manufacturer will have different MSRPs. For example, if you were shopping with Honda, the Honda Civic doesn’t have the same MSRP as the Honda Accord. 
  • The MSRP is available on the manufacturer’s website as well as on dealership websites. Sometimes, it’s a helpful negotiating tool if a dealership is selling a vehicle above MSRP. 

What is MSRP Based On? 

How exactly do manufacturers set the MSRP for their vehicles? The following factors are taken into account:

  • The MSRP reflects the base price for a model’s most entry-level build, meaning there are no additional features or accessories on it. 
  • As you move up the trim levels for a specific model, the MSRP will increase because additional features are being included as standard. 
  • Dealerships are not required to adhere to the MSRP when they price their vehicles. Once they receive a vehicle and are preparing it for sale, they may raise or lower the price based on what theypaid for the vehicle, also known as their invoice price. 
  • If a vehicle is in very high demand, it may be priced closer to the MSRP. If the vehicle isn’t very popular among shoppers, the lower demand may lead to a sticker price that’s below MSRP.

Comparing MSRP vs. Invoice

Another term you might come across while searching for a vehicle is “invoice price.” Compare MSRP vs. invoice below to learn what they mean for your negotiating power:

  • The price a dealership pays the manufacturer to acquire a vehicle is known as the invoice price.
  • The MSRP is the price designated for you, the customer. It’s also known as the “sticker price.”

If you’re able to obtain the invoice price for a vehicle you’re interested in and compare it to the MSRP, you may be able to use that knowledge to your advantage when negotiating. 

Secure a Great Price for Your Next Vehicle

Knowing that a dealership doesn’t have to sell a vehicle at the MSRP already puts you ahead of the game when it comes to securing a favorable price on your next purchase! Utilize these additional tips for even more buying power: 

  • Check websites like Kelley Blue Book and Cars.com to research what other shoppers in your area have paid for the same vehicle you’re looking at. 
  • When you start negotiating, list your price below the MSRP so that you and the associate have to work up toward the MSRP. This will lower your chances of ending up above the MSRP.
  • Don’t be shy about asking to see the invoice price for a vehicle. The dealership doesn’t have to oblige, but it never hurts to inquire. 
  • Shop around with different dealerships in your area so you can compare their best prices. 

Avoid MSRP Negotiations by Shopping Pre-Owned! 

Rocky's Auto Credit has an extensive pre-owned vehicle inventory that makes it easy to save on your next vehicle upgrade! Avoid the hassle of researching MSRPs and negotiating with new car dealerships by paying us a visit. We can help you find a late-year pre-owned vehicle with the modern features you desire, at a price you’ll feel confident about! We also offer flexible finance solutions for all types of credit. It’s our goal to see you drive home happy in a vehicle you love!

Contact Us with Questions

If you would like to learn more about the benefits of used vehicles, contact us at your convenience to start a conversation. Our team provides trusted car-buying tips to help you on your journey. If you’ve browsed our inventory and found a vehicle you like, you can fill out a pre-approval application to start the next steps today!

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