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A: The sticker price is the manufacturer’s suggested retail price, which is required by law to be displayed on new cars being sold. You should also see transport charges and the cost of the options installed on the car.
The dealer would be very happy if you blindly accepted this price and plunked down your hard-earned cash. The markup between the invoice price (what the dealer supposedly paid the manufacturer for the car) and the sticker price is usually between seven and 20 percent, according to the American Automobile Association. And the options listed on the sticker can be marked up by 25 percent or more. Both of these prices are prime negotiating territory. Think of the sticker price as the start point and negotiate your way from there.
To get the best deal, go online before you set foot on the dealership and research the car you’re interested in. Many sites list the MSRP as well as the net price, so when the dealer says that he can’t go any lower you’ll know if he’s telling you the truth. Many sites will also give you information on manufacturer rebates and discounts that slash the dealer’s net cost even lower and can translate into bigger savings for you if you’re aware of them.
The sticker price is not always negotiable. Some carmakers state that their MSRPs are set to make buying less of a hassle. If haggling isn’t for you, look for one of these dealers.
There are some cases where you may have to pay the sticker price or higher if the car you want is in demand. This was the case when BMW released the Mini Cooper and when Chrysler’s PT Cruiser was put on the market. So it’s smart to know about supply and demand for your desired car as well.
Mark Bryant
Director, Auto Product Management