How a New Car Is Priced

June 3rd, 2016 by

New Cars

How does a dealer come up with a car’s price?

The recommended price of a new vehicle is usually determined by the automaker. The MSRP (Manufacturer’s Suggested Retail Price) is the price estimate that the automaker publishes for any given model and trim line. Since it is just a suggestion, dealers can sell a vehicle for more or less than the MSRP.

The “base price” excludes any options or other fees and is the initial figure you’ll find on pricing websites, in pricing guides, and in most car reviews. The “total MSRP” is commonly called the “sticker price” since it’s the number that you’ll see on the new car’s window sticker. The sticker price is the base price plus any options, option-package discounts, and destination charges. Unless the vehicle you’re looking at is in very high demand, you can generally buy it for less than the listed sticker price.

One way to get a discount on a new vehicle’s sticker price is to check for manufacturer rebates. This is a direct-to-the-buyer payment from the manufacturer to encourage you to buy a particular vehicle. Many buyers use these rebates as part of the down payment to reduce the amount that needs to be financed. Rebates can be offered nationally and regionally and are usually promoted by the dealership or manufacturer. Feel free to browse our new inventory online or stop by one of our dealerships to check out hundreds of new cars we have available right now!