Written by Lee Wyatt (last updated February 21, 2009)
The other day I was out looking at new cars, and looking at those price stickers that you see on the cars, a thought came to me. Why do the dealers make those blasted things so hard to understand? Personally, I think that they make them as difficult to read as possible, that way they can look like they are giving you a good deal when in reality, they are not. This has driven me nuts for a long time, and I could never really seem to understand what each part of the sticker was meaning, and how they all played a part with each other.
Since I got tired of not knowing what was being said on the sticker (or by the dealer) I decided to educate myself. As I was educating myself I learned that there are four things that add up to the total sticker price. The four things that add up to the total sticker price are the manufacturer's suggested retail price, optional equipment, market adjustment, and destination charge. Each of these parts play an integral part to the sticker price, and are what the dealer uses when "fiddling" with the final price he offers you.
Manufacturer's Suggested Retail Price (MSRP): This is the base price that the manufacture suggests that their dealers sell the vehicle for. This price is what is listed without any optional equipment, destination charge, market adjustment, or...well, you get the idea. Keep in mind the second word of this part, which is suggested. Since this is only a suggestion, this is the one part of the sticker price that is most often played with by the automobile dealers, and as such they can mark it up or down as they see fit.
Optional Equipment (Options): As the name implies, this is all optional. This is the one portion of the sticker price that you, the purchaser, have the most control over. The more equipment that you choose, the higher the price is going to be, and conversely the fewer options that you choose the lower your total price is going to be. There are certain options that you can get that typically come at no charge, so if you see a price listed for them, be sure to ask what is going on. Those options are paint, interior and transmission types. Typically there is room for negotiation on the options, just be sure that you know what you are getting
Market Adjustments: This is a fee that some dealers tack on to high demand cars to try and make more of a profit. You can attempt to negotiate this part of the sticker with the dealer, but since this is usually only added onto vehicles that are moving quickly, dealers typically won't budge on it.
Destination Charge: The destination charge is what the dealers use to cover the cost of delivering the vehicles from the manufacturer. This is the one, absolutely non-negotiable part of the sticker price. But on the plus side, this fee is typically the same for all models within a certain make, so don't worry too much.
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