MSRP and Dealer Invoice: Know the Difference Between Suggested Price Tags and the Actual Value

by Darwin on June 12, 2018

When you’re ready to buy a new car, the key to negotiating a great deal is knowing the invoice price. Unfortunately, this is easier said than done. Often finding the right invoice price to base your negotiations on can get confusing. When it comes to car prices, there are generally two: the factory invoice and the dealer invoice. Knowing the difference between these two prices can give you a stronger and more accurate position when negotiating.

Dealer Invoices

When it comes to pricing, the dealer invoice is the price the dealer is charged by the car manufacturer for the vehicles they purchase to sell on their car lots. This price includes any options that the cars are equipped with. Essentially the amount of the dealer invoice is the cost the dealer incurs and is not generally shared with the customer. All dealerships pay the same general price when purchasing a vehicle from the factory. The price on the dealer invoice doesn’t include any of the individual fees that tend to vary from dealer to dealer.


The MSRP or manufacturer’s suggested retail price is the price that car manufactures suggest dealers charge for the vehicles they sell. Some of the factors that influence this price are, what it costs to make the vehicle, the trim options on the car, and where the car is being sold. If a vehicle is more popular in one region of the country, the MSRP will be higher, according to the experts at Cars Direct. The auto manufactures determine the MSRP ahead of time and is only a suggestion or a guideline as to where car dealers should base their starting asking price. All new cars, by law, must have an MSRP sticker prominently featured on the window, according to the writers at

Sticker Price

The sticker price is where the difference in pricing is the most noticeable and relevant to the consumer. The sticker price is the amount the car dealer is looking to get from the sale of the car. Often dealers will list the invoice price along with the sticker price to show potential buyers that their prices are reasonable, as well as featuring the MSRP to show that they are offering the car for less. Many buyers will feel like they are getting a good deal if they see a sticker price lower than the MSRP. However, this can be deceiving. Often dealers will sell their vehicles for less than the MSRP and still come out ahead based on their dealer invoice price. Often, because many customers say they won’t purchase a car above sticker price, manufacturers and dealerships will artificially increase the sticker price and then offer discounts on the car.

Knowing the difference between the various prices of new vehicles can help you to get the best price on your new car. The easiest way to check if the invoice price includes all the factory to dealer rebates and incentives is to ask to see a copy of the invoice.

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