The MSRP is the Manufacturers Suggested Retail Price and is reflected on the window sticker of the car (the sticker is government mandated). You can also find it out on Web sites such as Edmunds.com.
The word "suggested" is important, because dealers negotiate price in every transaction and that MSRP price is nothing more than a guide for the consumer, a jump-off point for starting negotiations.
Knowing the MSRP before going to the dealer will let you know what that car should cost, according to the manufacturer.
All itemized options for the vehicle must be listed, too, so it gives the consumer a way of comparing various cars on a lot without relying solely on what the salesman says.
For example, you may see a car with 4-wheel drive that is offered in 2-wheel drive as well. The MSRP will reveal the prices for both options. There are cases where the salesman might misrepresent the vehicle as having options such as a V8 engine, which is usually a higher-cost item when, in fact, the car has a smaller engine.
Because there is no shortage of mistakes made in car sales transactions by dealers, the consumer should always know the MSRP and compare prices and options only by using the MSRP. Consumers should be able to purchase for a price under the MSRP, especially at this time of year. If a dealer is unable to go under the MSRP, walk out.
KNOW YOUR CREDIT RATING
Buying a car is an expensive proposition.
Most consumers finance their purchases by taking out a bank loan. The problem is that banks lend money based on each individual's credit score. If your credit score is excellent, banks will lend money at the lowest interest rate available, and not just one bank, but any bank. A low credit score means that it is riskier for banks to lend money, and those great interest rates won't be available. The difference between a low interest rate and a high one can double or triple interest payments.
Consumers should know what to expect before shopping. Before even going to look at a car, buyers should visit their bank or go directly to GMAC, Ford Credit, or any other large lender to find out how they shape up. They should learn what their credit score is, and what the lowest interest rate they qualify for is, over the span of time they want to pay off your purchase. Consumers also have to see if the best rates apply to what they want to buy, and for how long the lenders want to finance the purchase.
Most consumers aren't aware that the dealer makes a large portion of its profits on the interest rate if you finance through the dealership. The higher the rate, the greater the profit. Knowing ahead of time what you qualify for will enable you to negotiate with the dealer and demand that you get the rate that you were expecting and no more. If the dealer won't give you the lowest rate, either go to another dealership, or finance through the lender that told you in the beginning of the process what you qualify for. You could save thousands of dollars. This is a consumer alert because, in many states, dealers do not have to disclose that they are making money on the financing. So do your homework.
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