MSRP: What It Means When You Are Looking To Buy A New Vehicle

You see this on every vehicle on a dealer's lot: MSRP. Most people do not even know what these letters stand for, nor that it can mean a better deal if they try. It helps if you start by learning a few things about MSRP, and then you can get a great deal when you buy a new vehicle


MSRP stands for the manufacturer's suggested retail price. Every price sticker you see on every car at every dealership has "MSRP" on it, but it really does mean that the manufacturer is making a real suggestion on what a dealership should charge for each vehicle. This is why you may see the same car for less at another dealership, and why it is priced higher at another dealership. The suggested retail price is just that; a suggestion. It gives the dealers something to start with, and a savvy car shopper knows that he/she has room to haggle. 

Haggling with the MSRP

You can absolutely haggle the MSRP on the car's sale tags. The price is there to give you an idea of what the manufacturer thinks the dealer should get for the car, but what the dealer wants maybe something else. As the buyer, you want to offer less than what the manufacturer or the dealer wants to sell the car for. You can haggle the price down, but on a new car, you should not expect the price to drop more than a few hundred to a couple of thousand dollars. More than that and the dealer would not turn a profit because all the profits would go to the manufacturer of the vehicle. 

"New This Week" and MSRP

If a dealer gets in a load of vehicles, and you walk in two days or three days after the vehicles have been unloaded onto the lot, do not be surprised if it is harder to haggle. Newer models and vehicles that are "new this week" to the dealership are going to sell closer to the MSRP because of their extreme newness. Take a look at a new vehicle that has been sitting on the lot for a few months and is taking up valuable "real estate" for other, newer vehicles that the dealership wants to put there. Then you can haggle away to get a deal on a car. 

Haggling the MSRP and Bonus Features

A different approach to haggling is to haggle for extra features. If the dealer wants to sell the vehicle at the MSRP price, bargain to get extras. Free oil changes for a year, extra cup holders installed, free tire replacements in a year, etc., are all examples of things you can haggle over if the dealer does not want to go below the MSRP.