Why You Shouldn’t Negotiate Based on the Sticker Price

When buying a new car you always hope to get a good deal and the best price possible. So make sure to do your homework and research for the price you can expect to pay. When you walk into that dealership they will usually point to the sticker price of the car as the price, but don’t be fooled. The sticker price on the front window of a new car represents the manufacturer’s suggested retail price, or MSRP. There will also be another sticker, called the Munroney sticker that will show the base price, the MSRP, transportation charges from the factory and fuel economy mileage. The dealer’s sticker is what the dealer actually wants to get. It is the base price plus about 23%.

The third price you may come across is the base price. This is the price for the no-frills model – no extras, no options, though it still includes the warranty. If you don’t want or need the many extras offered, say so and save yourself a lot of money.

The factory invoice price is not necessarily what the dealer paid the factory for the car. So don’t feel guilty at trying to get it for this price – or less. The factory often offers many incentives for the dealer that reduces the cost of the car well below the invoice price. But this is a good starting point for the buyer to bargain from. Many buyers these days get deals of over one thousand dollars less than the invoice price. This information can be found online at many websites. If you go prepared with information such as this, you will be less likely to pay more than you need to.

Name your lowest offer and bargain up, but don’t add anything else until you have a response from the dealer. If you must go up, then do so only in small amounts and when you get to the highest amount you intend to pay, be firm about it. There are plenty more dealers to buy from.

So what is the best price to pay for your new car? What you decide you want to pay and can get. If you hate haggling and confrontation, consider buying from a no-haggle type dealership. You might consider it worth a few extra dollars not to have to haggle. Consider buying online, a popular option these days and very often the cheapest way – but watch out for scams.


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