What Is MSRP?

Tiny car with coins and finance paperwork
 

In the market for a new Honda sedan, SUV, or pickup truck? As you look over your options, you’ll run across four letters that stand out related to what you could pay for your new vehicle. Look for “MSRP” on the vehicle’s listing.

 

 

What is MSRP? MSRP stands for Manufacturer Suggested Retail Price. It’s a figure the manufacturer recommends to the dealer as a price to sell the vehicle on the lot.MSRP is also known as the list price.

Automakers determine this price based on market information, the vehicle’s popularity, the materials that go into building it, and other considerations. Find out more about the meaning of MSRP as well as the difference between MSRP vs. invoice price with our guide from Dick's Hillsboro Honda! We’d love to put you behind the wheel of a new Honda today!

What Is MSRP?

Want to know more details about what MSRP means? The MSRP is the recommended price at which dealers should sell a vehicle, usually set by the automaker when the dealer takes delivery. Let’s dive into what an MSRP is so you can feel confident before shopping for a new vehicle near Beaverton! 

  • A specific make, model, and year has the same MSRP across all dealerships, as the price is set by the manufacturer. But the final sale price may differ from dealer to dealer.
  • While the MSRP is the same for each vehicle of the same model, it won’t be the same for every vehicle the manufacturer sells. SUVs will have a different MSRP than sedans or pickup trucks. 
  • You can find the MSRP on the manufacturer’s website or the dealer’s website. You’ll also see it on the documentation affixed to the new vehicle’s window as you look over what’s on the lot. Dealers use the MSRP when negotiating the price of their new vehicle. 

How Do Manufacturers Set the MSRP?

  • The MSRP sets a vehicle’s base price at its entry-level configuration without additional features or accessories. 
  • Additional features and higher trim levels will raise the cost of the vehicle accordingly. As you add more features to them for a factory order, it will raise the MSRP.
  • While the MSRP is recommended by the manufacturer, it’s not necessarily the price the dealership will choose to sell the vehicle. There is room for negotiation from the MSRP.
  • Depending on the invoice price, or the price the dealership paid to have the vehicle delivered to the lot, the dealer may raise or lower the price for Tigard shoppers.
  • Demand also plays a role in the final price you pay for a vehicle. A popular model will most likely be sold closer to the MSRP, while a less popular model may be set at a discount. 
  • Another factor is when new model years arrive on our Dick's Hillsboro Honda lot. Every August through October, you might see lower prices compared to the MSRP because new car dealers want to make room for the next model year. You could still get a great new vehicle at a cheaper price! For example, a 2023 model year vehicle might cost less when the 2024 model years arrive versus the price for the same 2023 model when they first showed up.

MSRP vs. Invoice Price

You may hear the term “invoice price” while car shopping. How do you differentiate between the MSRP vs. invoice price?

  • Invoice price (or dealer price) refers to the amount a dealer pays the manufacturer to have the vehicle on the lot. 
  • MSRP is the amount the manufacturer recommends the dealer should sell the vehicle.

Keep in mind that the MSRP is suggested. There’s room to negotiate most of the time. Knowing the MSRP vs. invoice price will help you determine what a fair price will be. Rarely will dealerships sell below the invoice price, but it could happen.

How Do I Get a Fair Price?

The MSRP may be the price the manufacturer recommends for the vehicle. But it may not be the final price you pay to take it home with you!

  • Do your research by checking what other Hillsboro drivers have paid for the same model on sites like Kelley Blue Book, Edmunds, or Cars.com.
  • Start your negotiation below the MSRP, and work your way up from there. Keep in mind any additional features you want and what they may cost. Adding features will raise the MSRP. 
  • Some dealers may let you see a car’s invoice price if you ask. However, they are not obligated to. The invoice price can help you determine where the lower end of the negotiation will be. Another thing to remember: dealers probably won’t go below the invoice price because they are a company that makes money on sales.
  • Shop at multiple dealerships until you find the one that can get you a price you are happy with for your car, truck, or SUV.
  • If you plan to lease, you can still negotiate the final price since the price you and the dealer agree on will determine your monthly payment costs. 
  • Remember the overall costs of ownership as you look to pay for a new vehicle. EVs may cost less to maintain while fuel-efficient vehicles have lower fuel costs.

Learn More About the Meaning of MSRP With Dick's Hillsboro Honda! 

Now we’ve answered, “What is MSRP?” You also understand the difference between MSRP vs. invoice price. Getting behind the wheel is the next step! Contact us or call 503-735-7310 to schedule a test drive. 

While you’re here, look over our payment calculator to see what budget can fit your West Portland lifestyle. Discover our car-buying tips to shop like a pro. We’re happy to help in any way we can!

 

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750 SW Oak St., Hillsboro, OR, 97123
Dick's Hillsboro Honda 45.523949, -122.989738.