What is the difference between reference price and manufacturer's suggested retail price?
2 Answers
Automobile reference prices are lower than the manufacturer's suggested retail prices, which are set by the manufacturer. It is more appropriate to purchase a car based on the reference price, as the actual transaction price is usually close to the reference price. Specific details are as follows: 1. Manufacturer's Suggested Retail Price (MSRP): The MSRP is the price set by the manufacturer, and in principle, 4S stores are required to sell at this price, which includes the manufacturer's profit beyond the cost. 2. Reference Price: The reference price is a suggested purchase price provided by automotive websites after compiling quotes from various dealers. The websites imply that selling at this price is reasonable. In actual car purchases, you need to negotiate the price with the dealer, and the final ex-factory price may be lower than the reference price. Some popular models may even be sold above the MSRP. Most prices, however, are below the MSRP.
The terms 'reference price' and 'manufacturer's suggested retail price (MSRP)' often confuse car buyers, and I didn't understand the difference myself before. Simply put, the reference price refers to the average market price, like the data you see on websites, reflecting actual transaction prices; while the MSRP is the suggested retail price set by the manufacturer, usually displayed on the car window. When buying a car, the MSRP is more like a starting point, with dealers using it as a baseline to mark up the price; the reference price, on the other hand, is used for bargaining. I checked various platforms and found that it could save me thousands. During promotional seasons, the reference price fluctuates significantly, while the MSRP remains fixed, reminding me to compare more before making a purchase. In short, understanding this difference can help avoid being ripped off and make car buying smarter.
