What the price tag really means
For the uninitiated, new vehicle pricing can seem like a foreign language. In this section, we'll help you unlock the mystery of automotive prices.
- MSRP - The MSRP or "Manufacturer's Suggested Retail Price", commonly known as the window sticker, is the recommended selling price set by the manufacturer. The key word here is "suggested"; your transaction price could be more or less depending on the options that you choose.
- Dealer's selling price- Often, you will see the dealer's selling price in their ad or on a car window on the lot. This price is often broken down into components, so you can "see" what you're being charged. The dealer's selling price can be less than the MSRP and is typically comprised of the following:
- The dealer's cost for the vehicle
- Freight & PDI
- Air and tire levies
- OMVIC fees (Ontario only)
- The price paid by the dealer
- The dealership's profit margin used to pay for overhead expenses (utilities, salaries, taxes, etc.) as in any other business
- "Starting at..." - If you see references to "starting at", this simply means the price of the most basic model, with fewer options or features added than a more popularly equipped version.
- Manufacturer incentives - Many manufacturers will offer additional incentives to the consumer. Usually advertised in the media, these discounts can consist of low rate financing/leasing rates, such as 1.9% APR, cash incentives, such as $1,000, or no-charge options, such as a no-charge sunroof. See GM's current offers.
- The extras - Finally, here's one important tip about pricing to bear in mind: whenever a dealer quotes you an amount, find out exactly what is included. Items which you typically have to add to the stated cost include:
- Dealer Fees
- Registration fees associated with filing at moveable property/PPSA administration fees
- Other miscellaneous fees (sometimes referred to as an Administration fee)
- Some dealerships charge customers for vehicle administration fee
Remember, you will also be responsible for the upfront costs of licensing and insuring the car.