How to Obtain a Reasonable Price for a New Car

Purchasing a new car is one of the most significant financial decisions one can make, and it requires adequate research and strategy. While the internet is filled with valuable information, sifting through it can be a daunting task. To take the stress out of car shopping, follow our guide on how to get a fair price for a new car.

What Makes a Car's Price "Fair"?

A car's price is generally considered "fair" when it's below the market value. A fair car price is something similar to what other people pay. It's essential to understand what all the various pricing terms mean to determine what a fair price is. These pricing terms include MSRP, invoice, selling price, and sticker price.

Understand Pricing Terms

As you start researching cars online, you'll find an abundance of prices and pricing terms. The three main ones to focus on are MSRP, invoice, and selling price. The manufacturer's suggested retail price (MSRP) is the price that the car maker recommends the vehicle be sold for and is often seen as the starting point for negotiation. The invoice price is the price the dealer paid the manufacturer for the car, while the selling price is the actual price the car sold for. Another pricing term you may see or hear is the sticker price, which is the price on the vehicle's window sticker, including MSRP, destination fee, options, and any other charges.

Tips to Negotiate a Fair Car Price

The following tips will help you negotiate a fair price effectively:

Know what you're comfortable with and your willingness to spend extra time going to different dealerships to get the absolute lowest price possible.

Get an Even Better Deal with Incentives and Rebates

There are various incentives and rebates available, such as cash rebates, military car buying programs, college graduate programs, special lease offers, and more. Knowing where to look can save you a significant amount of money.

Purchase with Confidence

Today, getting a fair price on a vehicle isn't about who is the better salesperson or bringing your dad to the dealership. Instead, shoppers can get a fair price by understanding the current market conditions and identifying when a deal is good or not-so-good.