What Does MSRP Mean?

Car dealer giving car key to buyer

If you’ve been shopping for a new vehicle in the Madison area, then you’ve more than likely come across the term ‘MSRP.’ What is MSRP, and what does MSRP mean? MSRP stands for Manufacturer Suggested Retail Price, and it’s the number that the manufacturer recommends a Jackson dealership sell a vehicle at. Also referred to as the list price, the manufacturer determines this price by factoring in market information on the vehicle’s popularity, the materials used to manufacture the automobile, and more. Delve into the ins and outs of what MSRP means with Herrin-Gear INFINITI as we go over how it’s set, as well as how you can use it to get a fair price on your next car!  

All About MSRP: What is it?

We often get asked by Brandon drivers, “what is MSRP?” The MSRP–or the Manufacturer Suggested Retail Price–is the recommended price for dealers to sell a vehicle at. You’ll likely come across this term when shopping for a vehicle, and it will often be accompanied by other automotive terms such as base price, invoice price, and transaction price. All of these terms are used to determine the value of the MSRP to the buyer and the dealership. Check out some more MSRP facts, below: 

  • The MSRP for the same vehicle model should remain consistent across all dealerships since it’s established 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 that the manufacturer sells. For example, SUVs will have a different MSRP than a sedan or truck. 
  • You can find the MSRP on the manufacturer’s website or the dealer’s website, and you can also use the MSRP when negotiating the price of your new vehicle. 

How is the MSRP Set?

Now that you know what an MSRP is, you’re probably wondering how the manufacturer goes about setting this price. The manufacturer uses information such as manufacturing costs, sales processes, and even the average markups by Ridgeland dealerships with live and historical market data to determine what a vehicle’s MSRP should be. Read on for more information on how an MSRP is set: 

  • The MSRP sets a vehicle’s base price at its entry-level configuration. This doesn’t include any additional features or accessories. 
  • If you opt for additional features or a higher trim level, this will raise the cost of the vehicle.
  • Even though the MSRP is recommended by the manufacturer, this does not mean that it’s the price the dealership will choose to sell the vehicle at. 
  • Depending on the invoice price for the vehicle–which is the price the dealership paid for the vehicle–the dealer may raise or lower the price of the car. 
  • Demand also affects how much a vehicle costs. A popular model will more than likely be sold closer to the MSRP, while a vehicle that’s less popular may be sold at a discount.

How Do You Get a Fair Price on a Vehicle?

Even though the MSRP is the price the manufacturer recommends for the vehicle, it is not the price that you have to pay for a vehicle. Oftentimes, the difference between what the dealer pays for the vehicle and the MSRP is several thousand dollars, meaning that the dealership will still make a profit even if you buy the car at a price lower than the MSRP. Take a look at some of our tips for getting a fair price at a dealership:

  • Find out what other Jackson drivers have paid for the same model by checking sites like Kelley Blue Book, Edmunds, or Cars.com.
  • Start negotiating below the MSRP and work your way up from there. You’ll want to keep 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, but they are not obligated to do so. The invoice price can help you gauge where to start negotiating your price. 
  • Shopping around at multiple dealerships is a great way to find the price that you want. 
  • Even if you intend on leasing, you can still negotiate the MSRP since the price you and the dealer agree on will determine your monthly payment costs. 

Shop with Herrin-Gear INFINITI for Your Next Vehicle!

If you still have any questions about MSRPs or how you can secure a fair price, contact us today. Or, stop by our showroom in Jackson to consult with one of our finance center experts about your best buying options. We’ll help you get the best price for the vehicle you want!

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