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What Does MSRP Mean When it Comes to Buying a Car?

What Does MSRP Mean When it Comes to Buying a Car?

Have you heard of MSRP? Heard it discussed when researching new cars? See it mentioned in dealerships? It’s one of the many terms that can confuse shoppers and that’s something our Copetown car loan team will address today.


So, what is MSRP and how does it factor into a car loan?




MSRP stands for Manufacturer’s Suggested Retail Price. It’s also referred to as the sticker price. It’s the price a car manufacturer suggests as reasonable for that particular make and model.


The clue is in the name though, ‘suggested’. The manufacturer will suggest a minimum price but it’s up to the dealership how much they sell the car for.


Some halo cars and special editions will include a condition from the manufacturer to not sell below MSRP, but these don’t apply to the majority of purchases. Some manufacturers value their MSRP more than others so you may find differences between brands and their willingness to negotiate.


You will also find it difficult to negotiate below an MSRP for new models or cars in high demand. If there is a lot of demand in the market for a particular car, the dealer has much less incentive to offer a discount.


One thing to know about MSRP except that it’s a suggested price is that it doesn’t include taxes, registration or any extra fees that are usually part of the deal. The MSRP is purely for the car.


How Does The Suggested Retail Price Impact A Copetown Car Loan?


MSRP will influence the overall cost of the car, so will influence the amount you’ll need to borrow with the car loan.


You don’t have to pay MSRP. Much will be up to your negotiating skills. If you’re a good negotiator and shop at the right time, you could pay less than MSRP. This will reduce the amount you’ll need as a car loan.


As above, you may have difficulty negotiating for new cars, halo cars or in demand cars. It’s entirely down to your negotiating skills though.


While the two aren’t directly related, one definitely impacts the other.


Combined with a down payment and trade in, the MSRP is the other big influence into the size of your Copetown car loan.


You take the retail price of the car you want to buy, deduct the down payment and approximate value of your trade in if you have one. The remaining figure is what you’ll need for your car loan.


Remember, MSRP is the value of the car only. It does not include taxes, any destination charges or delivery, does not include any dealership fees, registration or local fees. Make sure you know exactly what you’re paying for when you’re doing the deal!


When you’re ready for a car loan, get in touch with the Copetown auto loan experts at Northway Ford for great deals on auto finance.


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