MSRP and Invoice price do not apply to used cars

hot rodIt’s easy to get confused by car industry jargon.  One mistake I often witness is people mixing up new and used car terms. 

For example, I’ve had several people tell me something like,  “I can get this USED car for $3600 below MSRP, sounds like a great deal…right?” 

Unfortunately for them, this can be an expensive mistake.  Both MSRP and invoice price only apply to new cars.  As soon as you take the car off the lot, these terms mean nothing.  If you compare the price of a used car to MSRP, you won’t account for mileage, depreciation, and the current market value of the car.

MSRP (Manufacturer’s Suggested Retail Price) is the retail price displayed in the window of all NEW cars.  

Invoice Price (or dealer cost) is the amount paid by a car dealer to buy a NEW car from the manufacturer.   

What you'll pay for a new car is usually somewhere between MSRP and invoice (however, you can occasionally buy a car below invoice).  When discussing NEW cars, it’s acceptable to say “I got the car for $300 over invoice” or “I was able to negotiate $1800 below MSRP”.  But never use these terms for USED cars.

Once a car becomes used, the only term you should consider is the car's market value: how much people pay for a car on average in the used car market.  You can easily lookup market value using Edmunds True Market Value.  

While you’re here, why not check out posts from a few friends: 

Want to buy a car near (or below) dealer cost?

Get the free 10-Day Car Buying Expert Email Course

For each of the next 10 days, I'll send you a powerful car buying technique that could save you big money on your next car purchase.You'll learn that the key to getting a good deal is to get car prices online and negotiate everything BEFORE going to the dealership.
how to buy a car onlineInternet car buyerYou'll learn:
  • How to buy a car at the best possible price (by making dealers compete)
  • When is the best time to buy a car?
  • How to find the best financing available (by making lenders compete)
  • How to sell or trade-in your car for maximum value
You'll also get instant access to your free personalized car buying strategy guide.

 Your NameYour Email We respect your email privacyPowered by AWeber Autoresponder