Car Pricing: MSRP/Sticker Price

The MSRP, or Manufacturer’s Suggested Retail Price, is the amount car manufacturers recommend that car dealers use as the selling price for a vehicle. It is always higher than the dealer cost and it never varies from dealer to dealer.

The MSRP concept applies to all products that exist in today’s market, so this is not something that dwells strictly  in the automotive industry. As the word "suggested" implies, this retail price is just a suggestion, which means that vendors are not obligated to use the number. As a result, many car dealers often lower the suggested price to entice more buyers, resulting in what some refer to as the “sticker price.”

The sticker price is arguably more important than the MSRP because it is the price a dealer would expect them to pay. Since sticker prices are set by dealerships, they often vary from one location to another. Like the MSRP, this number is usually higher than the invoice price for the sake of profitability,but it can go below that on rare occasions.

Keep in mind that dealers can still profit from low sticker prices because manufacturers tend to offer them a fair compensation in return, like the Dealer Holdback or Dealer Cash Incentives.

For more information on how various incentives can affect the sticker price of a specific vehicle, be sure to consult Unhaggle’s free dealer cost report or contact our customer service team.