How much you should pay? What is MSRP?

MSRP stands for the Manufacturer's Suggested Retail Price. You wouldn’t want to

pay at this price certainly, but a fact taken from Realcartips.com shows that 1 of 10 car

buyers don’t have the knowledge that you can negotiate below the MSRP, and a much

bigger percentage don’t have any idea how much lower you can go below MSRP. MSRP stands for the Manufacturer's Suggested Retail Price. You wouldn’t want to

pay at this price certainly, but a fact taken from Realcartips.com shows that 1 of 10 car

buyers don’t have the knowledge that you can negotiate below the MSRP, and a much

bigger percentage don’t have any idea how much lower you can go below MSRP.

MSRP is also called the “sticker price”, which is put on every new vehicle’s window in

any dealerships. It includes all standard features and all factory options that come with

the car. It also has the information about the fuel economy of the cars and destination

charge.

That being said, MSRP does not include all taxes, license, registration, or any other

fees. So, you may at the end pay higher than the sticker price, especially when demand

is higher than the supply.

So, what to do? You obviously want to negotiate the price. How much? Find out what

people are paying for the car, but in most cases, you should be able to negotiate about

$1500 to as much as $5000 off the sticker price.

However, sometimes dealerships don’t really give you enough room to negotiate.

Solution? Waiting for a few months is a good strategy because it can save you a couple

thousand dollars, or perhaps try this new car buying platform called Nabthat, which

allows you to submit a car bid that is sent to many dealerships at once.
Let’s make this very clear up front, the invoice price is NOT the dealer's actual

cost of the vehicle. In fact, usually the vehicle’s real cost is about $750 - $10,000

under the listed invoice price (higher for leftover or slow-selling models). In other

words, not only are new car prices determined by MSRP and invoice, but also by

incentives beyond the invoice.

How? Glad you asked, because manufacturers pay dealerships after each sale

for various reasons. Here are some of the ways in which they do it.

Hidden Dealer Incentives

These incentives are similar to the cash back rebates that we are all familiar with.

What’s different is that these go to the dealership instead of the consumers.

"Stair-Step" Incentives

These are similar to the idea of performance bonuses. They are given to dealers

when they hit certain sales goals. For instance, a dealership may get a $250

bonus for each vehicle sold if they hit the monthly sales goal of 50 cars and

maybe $500 per car once they manage to move 100 cars.

Credit vouchers

In some cases, about a dozen credit vouchers are given by manufacturers to

help dealerships close deals. These vouchers can be used on any customer

throughout the month.

Holdback

Finally, dealers can also get reimbursement for their financing costs through what

is called holdback. The holdback is paid on a quarterly basis and is usually 1-3%

of the invoice price. In practice, the holdback amount will likely go over the actual

cost of financing so the excess becomes extra profit for the dealership.

So the next time you are comparing new car prices remember that there is more

to it than just the MSRP and the invoice price, just drop these terms and see the

facial reactions you get.

Good luck!


By: Zcodia technologies

However, sometimes dealerships don’t really give you enough room to negotiate.

Solution? Waiting for a few months is a good strategy because it can save you a couple

thousand dollars, or perhaps try this new car buying platform called Nabthat, which

allows you to submit a car bid that is sent to many dealerships at once.

Article Directory: https://www.articledirectoryusa.com

Source: http://www.articledirectoryusa.com/article/category/vehicles/car-buying/how-much-you-should-pay-what-is-msrp/

Article Tags: best cars to buy in LA , new car prizes ,

Submitted On Jun 11, 2014. Viewed 294 times.

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