Sticker prices

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Updated: 3/28/2003 1:53 pm
There are four main prices that apply to a new vehicle. In ascending order, these are the invoice price, the base price, the Monroney (mon-ROH-nee) sticker price, and the dealer sticker price. The invoice price is the sum of money paid to the manufacturer by the dealer, including freight charges, but not including discounts, rebates or other incentives that the manufacturer may credit to the dealer. The base price is the price of the vehicle with the manufacturer's warranty, but without any optional extras that the dealer may choose to install on the vehicle. According to federal law, a new vehicle must display a sticker showing the manufacturer's suggested retail price, or MSRP (M-S-R-P), together with freight costs and information about fuel economy. By law, only the purchaser of the vehicle can remove this so-called Monroney sticker after purchase. The dealer sticker shows the price that the dealer is asking for the vehicle, and contains information concerning options and other features added by the dealer to the basic vehicle. The dealer sticker price may also include additional warranties or other dealer-specific options. The profit a dealer makes on the sale of a new vehicle is usually between 10 and 20 percent and is based on the difference between the invoice price and the MSRP plus the price of any optional features. Dealers can sometimes accept a price lower than the MSRP, thus settling for a slightly lower profit in return for making the sale. For this reason, it's always a good idea to shop around when you're in the market for a new vehicle.

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