Why Car Prices Vary Between Dealerships

It may seem odd to see a car that you want being sold at one dealership at one price but at a wildly different price point just a few towns over. It’s the same car, so why would it have such a drastic price difference? Well, it technically is the same car, but there seem to be other factors involved in the pricing process. This article will help you discover what goes into pricing new vehicles and why each dealership has a different price for the same model.

New Vehicles Have Different Prices from Used Ones

The first thing to keep in mind is the condition of a vehicle: Is it new, or is it used? The price of a new Volkswagen for sale, for example, will be the highest it will ever be for that model but will decline as it ages and with use. Used vehicles can cost much less, making them the better deal between the two. You get what you pay for, so expect to pay high prices for the newer versions.

Manufacturer’s Suggested Retail Price

The Manufacturer’s Suggested Retail Price (MSRP) is the price at which the car manufacturer advises dealerships to sell a newly-built vehicle. Of course, this value is simply a suggestion and not set in stone, so it may not be the final selling price to a customer. You can use the MSRP as a baseline price for the amount that you can expect to pay for the automobile, wherever you decide to go while shopping.

How a Dealership Decides on a Price

The MSRP is the baseline price for a new car that’s straight from the factory, but the dealership will typically take this price and tack on whatever extra fees were needed to bring in and store the car on the lot before you arrive. The sticker price will reflect the additions to the original MSRP before any final closing fees are brought in.

Typical extra fees could include, but are not limited to:

·        Destination Fees

·        Documentation Fees

·        Sales Tax

·        Title Fees

·        Registration Fees

·        Dealership Fees

It’s not uncommon for a car to be priced thousands of dollars higher than the original MSRP due to the inclusion of these fees.

Can You Negotiate the Purchase Price?

The selling price of the car is negotiable, so you can try to bring it down before signing the contract. How much the dealer is willing to drop the sale price depends on how much you’re asking for, the profit margins, and anything else that could impact their bottom line. It’s a good idea to do your research ahead of time to get a general price range, then practice your bargaining skills in front of a mirror or with a friend. If all goes well, you could snag huge savings and walk out feeling satisfied.

Find the Right Car Price for You

You might think that the price of a vehicle should be the same across each dealership, but the prices can vary widely. The vehicle transportation fees, government fees, and anything else that can raise the price will be tacked on to the original MSRP. In the end, it’s up to the dealer to decide on the final price for the sticker, which can be quite different from dealer to dealer.

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