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List Price
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List Price

The list price is the cost of a vehicle as suggested by its manufacturer.

More On List Price

Definition

The list price is the cost of a vehicle as suggested by its manufacturer.

List Price Explained

Another term for manufacturer's suggested retail 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.

Another term for manufacturer's suggested retail 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.

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.

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.

Negotiation

Negotiating price is one of the most intimidating steps in the car buying process.  If you aim too low, you may get your offer rejected, but if you aim too high, you run the risk of spending more money than necessary. 

Influencing Factors

There are a number of factors that can help you get the price you want to pay for a car.  Before you even put in an offer, you should prioritize the features based on what you find essential and what you just find attractive.  You may have to forgo the features you want in order to stay at the price you want to pay.  Or you may decide that the extras are worth the added cost.

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.

When you are ready to start negotiating, don’t forget that it may take a few visits to the dealership to arrive at a price which is agreeable to both the buyer and seller.  Most experts agree that you probably should not accept the first numbers that the dealership presents.  Come prepared with competitors prices and your own number in mind before you sign the papers.  That way, you can get the car you want at a price that you can afford.