MSRP vs. Invoice Price: What is the Difference?

January 27, 2012

MSRP vs. invoice; how to distinguish the two. When you walk into any car showroom, the first thing you see on the vehicle is the MSRP. This stands for Manufacturers Suggested Retail Price. This is the price that the maker of the vehicle has suggested to all its dealers around the country. The invoice price, is the price the car dealer pays the manufacturer to purchase the car for resale. The difference between the MSRP and the invoice price is the car dealer's potential profit. Of course, operating costs must be deducted. In addition to the margin between the two prices, there can be additional incentives of varying amounts on different models to entice the dealer to sell these vehicles. Basically, their potential profit lies between the MSRP vs. invoice.

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