If you're in the market for a new car, you've probably come across the terms MSRP and base price. While they may seem interchangeable at first, there are some key differences between the two. In this article, we'll explore what MSRP and base price mean, and why understanding these terms is important when buying a car.
What is MSRP?
MSRP stands for Manufacturer's Suggested Retail Price. It is the price that the manufacturer recommends the dealer charge for the vehicle. MSRP includes the cost of the car, as well as any manufacturer-installed options and features. This price does not include any additional dealer fees or taxes.
In other words, the MSRP is the price the manufacturer recommends the dealer sell the car for, and it's typically the highest price you'll see listed for a car. However, it's important to note that this is only a suggestion - dealers are free to charge more or less than the MSRP.
What is the base price?
The base price is the cost of the car without any options or features added. It's the starting point for the price of the vehicle. The base price is typically lower than the MSRP and may be used as a bargaining point when negotiating with the dealer.
Why is it important to understand the difference?
Understanding the difference between MSRP and base price is important when you're shopping for a new car. Here are a few reasons why:
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Negotiation: Knowing the base price of a car can be useful when negotiating with the dealer. If you know the base price, you can use that as a starting point for your negotiation.
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Comparison: When you're comparing prices for different vehicles, it's important to compare the base price rather than the MSRP. This will give you a better idea of the true cost of the vehicle and allow you to make a more informed decision.
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Financing: If you're financing your car, the lender may use the MSRP to determine the value of the vehicle. However, the base price may be used instead, depending on the lender's policies. It's important to know which price your lender is using so you can ensure you're getting a fair deal.
The MSRP and base price are two important terms to understand when shopping for a new car. The MSRP is the manufacturer's suggested retail price, which includes the cost of the car and any manufacturer-installed options. The base price, on the other hand, is the cost of the car without any additional features. Knowing the difference between these two prices can help you negotiate a better deal, compare prices between vehicles, and ensure you're getting a fair deal when financing your car.
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Jim Hinshaw
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Homer Skelton CDJR
