Getting the best price on your new car is easier than you might think. Here’s what you should learn before visiting the dealership.
Wanting to save as much as possible on a new car is not uncommon. Knowing your way around the prices, however, can be tricky, with all the dealership jargon out there. That being said, getting familiar with some of the pricing terms can help you understand what to expect when it comes to striking a deal — while saving a great deal of money in the process.
What Is Your Car’s MSRP?
Short for the manufacturer’s suggested retail price, MSRP is the price that car manufacturers recommend dealerships charge for their vehicles — not including the destination fee. It is essentially the amount you see in advertisements as well as car reviews. The dealer ultimately chooses how much to price the cars at.
In many cases, the MSRP of a new car appears on the window sticker. Keep in mind, however, that it's not the final price, but often a starting point for negotiations. For instance, you could be paying the full MSRP — if not more — should the car model you’re interested in being in high demand. Then again, it’s almost always possible to negotiate with the dealer. Websites like iMotors can provide the MSRP of any car you’re looking to buy.
What Is the Invoice Price of Your Car?
Also referred to as the dealer cost, the invoice price is essentially the amount that the dealership pays the manufacturer for the vehicle. It normally consists of the vehicle’s base price as well as additional expenses — such as advertising — paid by the manufacturer. The difference between the invoice price and the final selling price is the profit earned by the dealer.
It helps to know the invoice price of the car you’re shopping for since you’ll have an idea of the possible discount range. That being said, the price you end up paying typically falls somewhere between the dealer cost and the MSRP.
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How Much Can You Negotiate off the MSRP?
The amount you can negotiate off the MSRP largely depends on how fast the car is selling. Naturally, you would have more leverage if the car you’re shopping for is in low demand. A couple of hundred off for a car that’s selling fast, however, is quite decent for a discount. Be that as it may, knowing what the dealer paid for the car will give you extra leverage during negotiations.
The dealership will normally use the MSRP as a starting point when negotiating a final price. But the trick is to start from the dealer cost and work your way up instead of going from the MSRP downwards. This is because, in many cases, the price set by the dealer may already be less than the MSRP.
It pays to get insider information from comparison sites to help you before shopping for a new car. You'll be better equipped to negotiate the best price possible, once you've found the car you're looking for at your local dealership.
Start Here to Find the MSRP Pricing for Your Car >>
Your local dealerships may have additional discounts and incentives.
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