Glossary

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MSRP

The Manufacturer Suggested Retail Price, or MSRP, represents the manufacturer's recommended selling price for a vehicle and each of its options. 

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.

One of the tools to keep in mind when negotiating the price of a car is the manufacturer suggested retail price, also known as MSRP.  This is the cost at which manufacturers recommend selling the car, but dealerships are allowed to set their own prices.

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.

 

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.

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