What is MSRP?
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MSRP stands for Manufacturer Suggested Retail Price, and means just that —- a suggested selling price for the retailer. It is a term used mostly in the car industry; otherwise the term list price is more commonly used.
MSRP is sometimes called the "sticker price," as dealerships used to place the MSRP of each new car on a large sticker on the windshield as a way to advertise to passing traffic. This practice has been largely replaced with a spec sheet on the side window that notes the MSRP. Some dealerships leave the MSRP off the spec sheet of certain models that are in demand, hoping to negotiate the best price possible. If the MSRP is posted, potential buyers might immediately expect to pay less than the dealership knows the market will bear. If the buyer has to ask for the MSRP, the dealer can talk about it along with various "extras" the vehicle has, starting the negotiations from a higher price.
The MSRP of a vehicle does not include taxes, registration, transportation to the dealership and other miscellaneous fees. While most people expect to get a discount off the MSRP, when all of the extraneous charges are added in, the price "out the door" might be close to, or even higher than, the MSRP. In fact, MSRPs used to be set fairly high, which allowed a good-sized discount, but in recent years the trend has tended towards setting the MSRP closer to the actual market value. Depending on the model and the demand, it is not unusual today to pay full MSRP at a dealership, plus the miscellaneous charges.
MSRP originated as a method of standardization and fair trade to protect small businesses and consumers alike. Prior to laws that enacted MSRPs, retailers were free to charge wildly different prices for the same product —- not just among different outlets, but to different customers at the same outlet. This was not only unfair to consumers, but made it difficult for smaller businesses to compete with large-volume dealerships. With a MSRP, all businesses and customers start off with the same set prices across the board and negotiate from there. MSRP does not eliminate free market trade, but attempts to put everyone on an even playing field.
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Discuss this Article10
I think the MSRP is generally similar between dealers of the same brand, similar location etc. but when you buy the car there is additions such as air tax, etc which are not covered in MSRP... - anon32382
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The only thing about MSRP is that not all dealers or stores say that they are sold products (cars) in bulk at a lower than MSRP price to sell at the MSRP to make themselves a nice little profit. Forget about that sticker price it's how bad they want to sell you the car at your price. It's best just to not even think of leaving with a new car that day walk away without one. The price of the vehicle can also depend on where the dealership is located and that doesn't mean state. A dealership out in the middle of nowhere doesn't pay as much compared to one in the city therefore the first dealership would most likely have a better price than the city. - james74
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Anon16054 - no the msrp will not change. store A and store B will both have the same msrp but they may purchase the item at different prices because they may have different distributors this is a reason you might see different prices in different stores. and also one store may want to make more on that product than another company this is another reason you may see different pricing in different stores. - anon17123
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Can the "MSRP" be different in different stores? For example, if the MSRP is $25 in Store A, could the MSRP for the same item in Store B be $30, if the Store B location was 30 miles distant from the Store A store? - anon16054
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The MSRP for software, dose it work in the same way as described above? - davidlowe
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