Difference between MSRP and Invoice Price

What is the difference between the MSRP and the invoice price? The MSRP is the manufacturer’s suggested retail price which is also known as the “sticker price.” It is essentially the “suggested” retail price but it isn’t necessarily the price that dealers use as the selling price for their cars. Depending on various factors such as demand and availability, the actual selling price could be higher or even lower than the MSRP.

The invoice price is simply the price that dealerships pay for cars. The invoice price is significantly lower than the MSRP, but how much lower depends on the make and model of the vehicle. Many car buyers today look up the invoice prices for the cars that they are interested in purchasing or leasing so that they have an idea of how much the MSRP can be negotiated without reaching a price that is lower than the invoice. In some cases, dealers will even offer a deal where the selling price is lower than the invoice price.