What is MSRP?

If you are searching the Forest Grove market for a new vehicle, you likely have a lot of questions about the car buying process. One common question we hear from our Aloha customers is, “What does MSRP mean?” MSRP stands for Manufacturer Suggested Retail Price and essentially indicates the figure auto manufacturers believe a vehicle to be worth. Also referred to as the list price, the manufacturer sets the MSRP based on market information, a vehicle’s popularity, the build materials, and more. Learn more about what is MSRP with Tonkin Hillsboro Chrysler Jeep Dodge RAM below!

What is MSRP?

So, what is MSRP? The Manufacturer Suggested Retail Price (MSRP) is the price recommendation handed down from the automaker to the dealerships. Most of us in Beaverton will only encounter the term MSRP when shopping for new vehicles. Along with MSRP, you may see terms like base price, invoice price, and transaction price. Each one of these terms is used to determine the value of the MSRP to both buyers and dealers. Discover more of what does MSRP mean below:

• The same vehicle model should have the exact same MSRP, regardless of which dealership you buy from since it’s set by the manufacturer. 
• The MSRP is universal for a specific model, but the MSRP will not be the same for each vehicle. For instance, a base sedan may have a very different MSRP than a fully-loaded truck. 
• You can find the MSRP listed on the manufacturer’s website to ensure you are getting a fair price when shopping. 

How is the MSRP Set?

Now that you understand what MSRP is, you likely want to know how automotive manufacturers determine that price. Manufacturers use information like production costs, sales processes, and even the average markup set by dealerships to settle on an MSRP. Through both live and historical market data, car manufacturers can set a fair MSRP for each vehicle they make. Learn more about how each MSRP is set below:

• The MSRP determines the base price at the entry-level of a vehicle without any additional features or upgrades. 
• Added features and specs on higher trim levels will raise the cost proportionally.
• While MSRP is the recommended price, it is not necessarily the figure a dealership will charge for any given vehicle. 
• Depending on what the dealership paid for a vehicle (invoice price) the dealership may adjust the price accordingly.
• The market plays a huge role in setting vehicle prices. A popular model will often sell for close to the MSRP, while a less popular option may be offered at a discount. 

How Do I Get a Fair Price?

As the name implies, MSRP is a suggestion, not the price you are bound to pay. In many instances, the difference between the invoice price and MSRP can be a few thousand dollars, so there may be more wiggle room than you think. Here are a few tips to bring with you to the negotiating table:

• Conduct some local research to see what other local drivers have paid for the same model. You can check sites like Kelley Blue Book, Edmunds, or Cars.com.
• Start your negotiation with an offer below MSRP, you can work your way up from there based on any feature upgrades. 
• You can always ask to see the invoice price of a vehicle, while the dealer is not obliged to provide you with that information, many will share that figure. 
• Shop around at multiple dealers to find an offer that suits your budget best. 
• If you plan to sign a lease, you can still negotiate the MSRP since the price you and the dealer agree to will set your monthly payments. 

Upgrade Your Vehicle at Tonkin Hillsboro Chrysler Jeep Dodge RAM!

When you secure a fair price, you can head home to Hillsboro knowing your newest purchase is loaded with value. Learn more about the MSRP of each model that catches your eye with our finance team, and apply for financing when you find your fit! We’re here to help you discern which vehicle is right for your budget and lifestyle. For personalized car buying advice, contact us today!