What is the MSRP Sticker?
When shopping for a car, you will see the MSRP sticker on the car window. MSRP is short for manufacturer’s suggested retail price. MSRP is also referred to as the Monroney, the name of the U.S. senator who sponsored the law that requires auto manufacturers to disclose a vehicle's features and associated pricing, from model information, the vehicle’s standard equipment, warranty information, to optional equipment, parts content, and vehicle safety rating.
MSRP is the price that a manufacturer recommends a vehicle be sold for. The price is set so the manufacturer, dealer, and intermediaries can make a profit. Although listed, the MSRP is merely the “suggested” price. A vehicle can sell for less than MSRP if the car has sat long on a dealer’s lot and the dealership needs room for new inventory. If a vehicle model is in high demand, its price could go above MSRP.
Currently, due to low inventory caused by the global microchip shortage and labor changes, dealerships are taking the opportunity to make an extra profit and adding a "market adjustment” and raising the prices of vehicles. CNBC reports recent data from Edmunds indicates 89 percent of shoppers are paying more than sticker price or within 5 percent of it. The average transaction price for a new car was $46,426 in December 2021, up $5,850 or 14 percent from the prior year.
While the MSRP is usually the starting point for negotiations, obtaining the invoice price, which is what the dealer actually pays the vehicle’s manufacturer, could give you a range for negotiating. Although the invoice price can also include hidden discounts given by the manufacturer to the dealer, negotiating a price between the MSRP and invoice price could bring a buyer closer to a fair deal.
Used cars or certified used cars do not have an MSRP. Dealerships can mark up used vehicles as they please, typically 10 to 15 percent. Edmunds’ data shows used car buyers are paying an average $29,011, up 27.9 percent from a year ago. This makes the average three-year-old used car cost $30,334; five-year-old used car cost $25,106, and nine-year old car cost $14,124.
More than relying on the MSRP, invoice price or used car sticker price, when shopping for a new or used vehicle, it is best to research the true market value of a vehicle by visiting trusted vehicle listing websites. For used vehicles, Investopedia suggests:
- Best for Mobile: Autolist
- Best for Cheap Cars: CarGurus
- Best for Comparing Options: AutoTempest
- Best Auction Site: Cars & Bids
Pay attention to the vehicle’s mileage, vehicle history report and features. If you are able to negotiate at market value or close to it, then you will be in line with what others have paid.
When in the market for a used car, stop by Carousel Preowned. Carousel Preowned serving Iowa City, Cedar Rapids, Davenport, North Liberty, Marion, and Coralville, IA, is proud to be an automotive leader in our community. We do our best to ensure your complete satisfaction every time you step into our car dealership. This is why we offer the widest selection of used and pre-owned cars, trucks, and SUVs and provide true ease of purchase in Iowa.