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What Does MSRP Mean?

Man test driving a car

The first thing you may be thinking about when buying a new vehicle is the MSRP. So what does MSRP mean and how is it determined? MSRP stands for Manufacturer Suggested Retail Price and is a number that the manufacturer recommends a Hicksville dealership sells a vehicle at. The manufacturer determines this based on the market information on the popularity of the vehicle, the materials that go into building it, and more. This is also known as the list price. Learn more about what MSRP means and how you can use it to get a fair price on your next model! Our finance team at Platinum Volkswagen can help you find the right model at the right price.

What is MSRP?

The MSRP, or Manufacturer Suggested Retail Price, is a recommended price for dealers to sell the vehicle at. And typically this is accompanied by other automotive terms like base price, invoice price, and transaction price. Each of these terms is used to determine the value of the MSRP. Still wondering about what an MSRP is? Take a look at some more information on this subject below:

  • The same vehicle model should share the same MSRP across all dealerships since it’s set by the manufacturer. 
  • While the MSRP is the same for each vehicle of the same model, it won’t be the same for every vehicle the manufacturer sells. For instance, SUVs will have a different MSRP than a sedan or a truck. 
  • Car shoppers can find the MSRP on the manufacturer’s website or the dealer’s website, and they can use it when negotiating the price of their new vehicle. 

How is the MSRP Set?

Now that you understand what MSRP is, how does the manufacturer determine the MSRP? Using information like manufacturing costs, sales processes, and average markups by other Bayside dealers with live and historical market data is how the manufacturer determines what the vehicle’s MSRP should be. Read below for more information on how an MSRP is set:

  • The MSRP sets a vehicle’s base price at its entry-level configuration without additional features or accessories. 
  • Additional features and higher trim levels will raise the cost of the vehicle accordingly. 
  • While the MSRP is recommended by the manufacturer, it’s not necessarily the price the dealership will choose to sell the vehicle at. 
  • Depending on the invoice price for the vehicle – the price the dealership paid for the vehicle – the dealer may raise or lower the price of the car for Hempstead shoppers.
  • Demand also plays a role in how much a vehicle costs. A popular model will most likely be sold closer to the MSRP, while a less popular model may be set at a discount. 

How Do I Get a Fair Price?

While the MSRP is the price the manufacturer recommends for the vehicle, it isn’t the price you necessarily have to pay for the vehicle. Most times, the difference between what the dealer paid for the vehicle and the MSRP is several thousand dollars. This means that even if you buy the car at a price lower than the MSRP, the dealer will still be making a profit. Here are a few tips to getting a fair price at the dealership:

  • Do your research by checking what other Hicksville drivers have paid for the same model on sites like Kelley Blue Book, Edmunds, or
  • Start your negotiation below the MSRP, and work your way up from there – keeping in mind any additional features you want and what they may cost. 
  • Some dealers may let you see a car’s invoice price if you ask, however they are not obligated to. The invoice price can help you determine where you should start your price negotiation.
  • Shop at multiple dealerships until you find the one that can get you a price you are happy with.
  • If you plan to lease you can still negotiate the MSRP since the price you and the dealer agree on will determine your monthly payment costs. 

Get Your Next Volkswagen Vehicle at Platinum Volkswagen!

Once you speak with our finance team and reach a fair price that both you and our dealership are satisfied with, we can help you find new vehicle specials to help you save more. Before you come in, you can even apply for financing online from Hempstead! Have questions in the meantime? Don’t hesitate to contact us!

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