Basic car price terminology

Basic Car Price Terminology

Basic car price terms

If you’re in the market for a used car (or maybe even a new one) there’s a lot of terms that get thrown around that can get really confusing really fast. Asking price, trade in price, retail price, MSRP can all get thrown out there, but how many of us actually know what they all mean when we start shopping? Here’s a quick and easy primer on basic car pricing terminology¬†that you may run into in your search.

Trade-in Price

The trade-in price is what the dealer is willing to give you for your old car when you are getting a new one. This price can be bargained up (or down!) but is will be close to what the car would sell for if you brought it to an auction.

Private-party price

In contrast to the trade-in price, the private-party price is what you could expect to get for the car if you sold it privately. This number is always higher than the trade-in price.

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Asking Price

The asking price is what a dealer would like to sell the car for. When you hear that something is the asking price, keep in mind that you can negotiate and try to bargain it down a little. In this it’s good to check out some of our basic car buying tips to be prepared.

Dealer Retail Price

The dealer retail price is the number you will see on the car when it is in the lot. This may or may not be the asking price.

MSRP

The MSRP is the manufacturer suggested retail price. This is what a manufacturer like Ford or General Motors recommends a dealership price a vehicle.

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Invoice price

When it comes to new car shopping, the invoice price is how much the car dealership paid the manufacturer or distributer for the vehicle on its lot. No dealer will sell a car for less than what they paid for it.

Wholesale price

This term applies only to used cars. Like the invoice price, this is how much the dealer paid for the car.

Book price or book value

The book price or book value are how much the car costs according to a reputable external car listing organization. The Kelley Blue Book is one of the most popular, but other organizations exist that might be cited.

Hopefully this brief glossary of new and used car-buying vocabulary helped clear up a few terms that you might see or hear on your car buying journey. Good luck, and let us know if we can help you find what you are looking for!