What Is MSRP?

2021 Honda Pilot on the Beach

During your Sharon car-shopping spree, you’ve probably heard the term “MSRP” a lot. But, what does MSRP mean? MSRP stands for “manufacturer suggested retail price”, and it’s the number that the manufacturer recommends a dealer sells a certain vehicle for. Learn what determines the MSRP and what it means for you with the finance center at Shenango Honda. 

What Does MSRP Mean?

The MSRP is the price for which a manufacturer recommends that a dealer sells a certain vehicle. Other terms you might run into related to MSRP could include invoice price, base price, and transaction price, which are all used to determine the MSRP. Here are some other things you should know about MSRP: 

  • A vehicle model should have the same MSRP across all Sharon dealerships since the MSRP is determined by the manufacturer. 
  • The MSRP is the same for each vehicle model but not every vehicle type. For example, trucks will have different MSRP values than sedans. 
  • You can find the MSRP of a certain vehicle by visiting the manufacturer’s website or even the dealer’s website. 

What Determines MSRP?

You know what MSRP is, but how does the manufacturer determine the MSRP? They use information like sales data, manufacturing costs, average markups in certain areas, and other data to ultimately determine the MSRP. Here are some other things that contribute to a vehicle’s MSRP: 

  • The MSRP determines the vehicle’s base price, not including additional features or accessories. 
  • The more features you want or the higher the trim level you choose, the higher the cost of the vehicle. 
  • Just because the MSRP is determined by the manufacturer doesn’t mean it’s the price at which the dealership has to sell the vehicle. 
  • The invoice price is the price the dealership paid for the vehicle. This price could determine whether the dealership lowers or raises the price of the car. 
  • Another factor that plays a role in vehicle cost is demand. A popular model is usually sold at a dealership much closer to the MSRP than less-popular models, which are usually sold at a discount. 

Getting a Fair Price

What does MSRP mean for you and getting the right price for a car? The MSRP is set by the manufacturer but isn’t what the dealership has to sell the vehicle for. Here are some tips to help you negotiate a better price during your Mercer car-buying experience: 

  • Research the value of the vehicle online to see what it’s going for in other areas. You can easily find the trade-in value of a vehicle with our value your trade tool at Shenango Honda. 
  • When negotiating, start below the MSRP so that you have some room to meet in the middle with the dealership.
  • Ask to see the invoice price, but just know that dealerships aren’t obliged to show you. Since the difference between the MSRP and invoice price, the price the dealership paid for the car, is usually several thousand dollars, the dealership will still profit by selling below the MSRP. 
  • Shop at multiple dealerships to compare offers and see which one is the most affordable. 
  • Even if you lease, you can still negotiate the MSRP as the monthly payment costs are determined by the final price. 

Now that you know what MSRP is, you can be better prepared to negotiate for the right price, so you can get the vehicle you want with confidence. See how you can get an even better deal with our new vehicle specials at Shenango Honda. 

Find Your New Vehicle at Shenango Honda

What does MSRP mean for you? Knowing the MSRP can help you get the best deal on a new car you want. Contact us to explore our inventory and see how you can get a new car for your Hermitage commute at a price you’ll love.

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