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The Manufacturer’s Suggested Retail Price of a new vehicle.

The Manufacturer Suggested Retail Price, or MSRP, represents the manufacturer's recommended selling price for a vehicle and each of its options. It's also another term for list price or sticker price. List price is the recommended selling price for a vehicle and each of its optional features as defined by the manufacturer.

Factors that influence selling price

There are a number of factors that influence the final selling price – what other buyers are paying, incentives offered by manufacturers (to dealers and / or consumers), the demand for that model, and other issues.

Negotiating Selling Price

There is nothing that requires car buyers to pay the suggested retail price. In most cases, it is expected that buyers will negotiate with dealerships – trying to pay as little as possible, while dealers try to get as much as possible for a car.

When you have found the car you want to buy, you will probably need to do some price negotiating.  You should prioritize the features and extras that are offered with the vehicle so you know what you need and want, and what you are willing to forgo in case there is a considerable hike in price for these options.

Before you start negotiating with the dealer, take a look at different dealerships and see what prices they are asking.  Then look at the list price, or MSRP, for the same car and see how the numbers compare.  The difference between the dealer’s numbers and the list price, plus the cost of the extra features you want, should be a good framework for how much you can negotiate on the price of the car.

Reaching an agreement

Also, don’t get frustrated if you and the dealer can’t reach an agreeable price on your first visit.  Many experts recommend that car buyers should not agree to the first numbers a dealer presents.  Instead, shop around and compare offers so you can see how close to the MSRP you can get.