What is the difference between the manufacturer's suggested retail price and the ex-factory price?
2 Answers
The differences between the ex-factory price and the manufacturer's suggested retail price are as follows: 1. The manufacturer's suggested retail price is the official quoted price. Generally, dealers will offer a floating price based on this when selling. Additionally, the suggested retail price serves as an important basis for paying the purchase tax. It is a reference price for the buyer, not a strict quotation displayed by the seller, but rather for the buyer's reference. 2. The ex-factory price refers to the actual price of the vehicle itself, simply put, it is the real price of the car, excluding any other fees. Typically, the ex-factory price still requires payment of additional costs such as purchase tax, license plate registration, insurance, etc. The purchase tax is a tax levied by tax authorities on the acquisition of relevant properties within the scope of the purchase tax system.
The manufacturer's suggested retail price (MSRP) is the recommended selling price set by automakers, essentially the official price tag, similar to a store's marked price. The base vehicle price refers to the quoted price from dealerships excluding any add-ons like navigation or leather seats. Simply put, MSRP represents the ideal starting point while the base price serves as the actual negotiation baseline. When helping family members car shop, I always remind them not to fixate on MSRP - dealers often discount base prices to attract buyers, but watch for hidden fees calculated from this base price (like insurance and taxes) which can yield significant savings. The key is negotiating from the base price and avoiding upsell traps, ensuring a truly cost-effective purchase. Car buying is an art - understanding these two price distinctions prevents unnecessary spending.
