MSRP vs RETAIL Price

 Ok, Here is a thing I deal with every day. MSRP vs RETAIL (or as is it referred to in the industry ADDENDUM). 

Customer comes in and looks at a car and drives it, falls in love, and wants to know the price. I take them to the window sticker and show them.  It's then that the majority will look at the MSRP on the factory sticker and assume that it the price (Plus Tax and finance).  I point out the retail price which (at EVERY dealership you visit) is where the market adjustment, and dealer options are listed.  So, let's say the MSRP on a car is $24,445. MSRP stands for Manufacturer SUGGESTED Retail Price.  Keep in mind that the manufacturer does not sell cars. They get paid by the dealership (invoice) who puts the car in inventory to sell.  Many consumers are under the false impression that the retailer has thousands of dollars between invoice and MSRP. I know with Kia it's about 800.00.  Any dealership that sells for MSRP will go broke in a short time.  

Think of it this way. When you go to XYZ big box store to buy a TV, there is a retail price on that TV. Let's say $2300.00.  You go in and pay $2300.00 plus tax. No haggling.  What you don't think about is the fact that Big Box paid, let's say $1700.00 for it invoice. The MSRP may be $1850.00.  The Big Box adds a market adjustment to bring the retail amount to the $2300.00 that you see. They have a sale, and the 30% off comes out of profit margin, not off MSRP.  This is BASIC BUSINESS.  Jewelry, furniture, electronics, phones, everything you buy has a mark-up retail. Ask a Mom and Pop business. When I sold Concrete statuary, my markup was almost 150% of wholesale. It's what the market would bear, and I was competitive with other dealers. It was more than just what I paid vs. what I was selling for. I had delivery expenses, insurance and time and labor. It's the way retail works. If I bought a piece for 30.00 and sold it for 35.00 I would be broke in a month. If I sell that piece for 100.00, I stay in business. 

Car dealerships are, under law, required to show you the MSRP. No one else in the Big Box retail industry has to disclose their MSRP.  So when a car buyer says they are not paying that "bullshit" mark-up price, I tell them to go to Big Box store and tell them you are not paying the $2300.00 for the TV. The store will tell you to have a nice day.

 A dealership will negotiate price, but it will be off retail price. That's the way car sales works. Everyone wants to pay rock bottom for a car. Granted. We understand that. We will work with you. Consumers have to understand that retail is retail. It's what the car sells for to be competitive in the market. YES, it is a profit margin. We are not trying to hide that. 

So, cut a little slack. It is not the sales person trying to screw you, it's not the dealership trying to screw you, it's not the manufacturer trying to screw you. It's just the cost of doing business and keeping the lights on. I have been the buyer many times, and I too try to get a discount of some kind. I know that anything they give me comes out of profit. Again, that's business. I also know that the sales guy has to eat too.  If you don't want to pay retail, stay in the car you have. Right now with inventories suffering worldwide, priced and "markups" are higher. Businesses have a monthly expense "nut". (just like you having to pay rent. It needs to be there).  The only way to do that selling less units is to ask more for the car. You will either pay it or not. Up to you. We still have to keep the lights on. 

I hope this clears a few thing up. Bottom line is, we want YOU to be happy and WE need to be happy too. 

Have a KIA Day!