My Thoughts on MSRP

[JBryant]

There always seems to be hot-button issues on the forum, one of which is paying over MSRP. While negotiating the purchase of a 2023 Maverick Hybrid XLT that someone had ordered and did not take, I got to thinking about MSRP and why people get so bent out of shape. Here are my simple and hopefully logical thoughts.

• What is MSRP? Manufacturers SUGGESTED Retail Price. It is not a set in stone price, just one suggested. Up until a couple of years ago, there were ads everywhere indicating $3K, $5K, even up to $10K off MSRP on certain vehicles, but not on all vehicles, the difference being the demand. BTW: Have you ever suggested your kids do a certain thing, and they do not follow your suggestion?
• It totally depends on what the market calls for. Have you noticed things discounted at various places? Most often, these are things that are slow sellers, so stores drop the price. Obviously, the Maverick is not a slow seller.
• As long as the supply and demand issue continues, we will see such things. There will probably come a day when you can buy Mavericks below MSRP, but that will come about when there are lots of them on dealer lots, which obviously is not now. As a side note, I never thought I would have to pay $125 an hour for an electrician, but that is going rate where I live based on supply and demand.
• My modus operandi is as follows – buy what you can afford, buy what you need if you can afford it, buy what you want if you can afford it and justify it.
• Make your own decision about what you are willing to pay, and do not criticize those who are willing. It is not your money; it is theirs.

No, I am not a dealer, do not work for a dealer and have no relatives that work for one. I am just a simple man, business owner who will be buying my 101st new vehicle this weekend (many for business and some for personal).

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[MaverickCruiser]

I think what causes heartburn for some people is you rarely see other retailers (e.g. jewelers, clothing stores) charge the MSRP let alone charge above it. Because of this MSRP has come to be assumed by society to be an inflated price nobody actually pays.

 

[bearsfan647]

There always seems to be hot-button issues on the forum, one of which is paying over MSRP. While negotiating the purchase of a 2023 Maverick Hybrid XLT that someone had ordered and did not take, I got to thinking about MSRP and why people get so bent out of shape. Here are my simple and hopefully logical thoughts.

• What is MSRP? Manufacturers SUGGESTED Retail Price. It is not a set in stone price, just one suggested. Up until a couple of years ago, there were ads everywhere indicating $3K, $5K, even up to $10K off MSRP on certain vehicles, but not on all vehicles, the difference being the demand. BTW: Have you ever suggested your kids do a certain thing, and they do not follow your suggestion?
• It totally depends on what the market calls for. Have you noticed things discounted at various places? Most often, these are things that are slow sellers, so stores drop the price. Obviously, the Maverick is not a slow seller.
• As long as the supply and demand issue continues, we will see such things. There will probably come a day when you can buy Mavericks below MSRP, but that will come about when there are lots of them on dealer lots, which obviously is not now. As a side note, I never thought I would have to pay $125 an hour for an electrician, but that is going rate where I live based on supply and demand.
• My modus operandi is as follows – buy what you can afford, buy what you need if you can afford it, buy what you want if you can afford it and justify it.
• Make your own decision about what you are willing to pay, and do not criticize those who are willing. It is not your money; it is theirs.

No, I am not a dealer, do not work for a dealer and have no relatives that work for one. I am just a simple man, business owner who will be buying my 101st new vehicle this weekend (many for business and some for personal).

that’s cool and all but it has never worked that way and these are just excuses to justify it.

 

[Flight Test]

Well said. I have not paid MSRP since my very first new car when I learned more about the process and how cars are priced. I buy based on my wants and needs, never buying more than I need. Do I WANT a $70K F150 Platinum, sure. But I don't NEED a $70K F150 Platinum, even though I could easily afford one. The Mav fits my needs quite well. I am lucky my dealer accepts X-Plan. Would I pay MSRP, no I would not. I get the supply/demand condition. The dealer needs me more than I need him. Folks will pay what they want to get what they want. As you said, it is their money.

 

[Old Ranchero]

I think what causes heartburn for some people is you rarely see other retailers (e.g. jewelers, clothing stores) charge the MSRP let alone charge above it. Because of this MSRP has come to be assumed by society to be an inflated price nobody actually pays.

MSRP doesn't come into play with your examples. Few, if any other industries use MSRP as a starting point for negotiations. It was only created in the auto industry to equalize the starting point across all regions and dealers so there is some baseline number to work from. It's not set in stone.

 

[shadowthrone]

MSRP is the retail price the manufacturer wants to see on the shelf to ensure that it sells close to 100% of what it produces. This already includes a profit margin for the retailer, which varies GREATLY based on the product. It's typically seen as a "fair" price where both manufacturer and dealer make a profit and consumers see clearly defined price levels for goods.

People really get upset because it's such a limited supply truck and folks were scalping them and Broncos over the last year or two.

 

[Maverstang]

The acceptance of MSRP may apply to Japanese manufacturers who have long priced and sold their cars at or near MSRP. But the Big Three Detroit manufacturers have a long, long, long tradition of jacking up MSRP to inflated values and offering big rebates and discounts to court customers.

The US manufacturers have done it to themselves by training us to expect discounts on a regular basis. I don’t trust the Maverick MSRP, and the fact I can buy one at below “invoice” (another price inflation game) from places like Granger just reinforces the fact it IS a game.

Only a fool pays more than MSRP in the auto game (even at MSRP may be foolish in many cases). But as someone pointed out, there are no shortages of people who are foolish with their money.

 

[Maverick2023]

I paid way too much in taxes and nobody complained about that on my behalf. Sheesh…butt out if it ain’t your money.

 

[The Weatherman]

https://www.cnn.com/2023/01/19/business/new-car-prices/index.html

 

[thevol]

When Granger offered $3k off MSRP I did a doubletake and basically bought without thinking lol. Would have even been a decent deal in the good ol days, thats around 15% off MSRP on the base models. This ADM stuff happening these days is not something I hope to ever be a part of... of course they will just jack up the MSRP and start doing rebates again and most will never know the difference.

 

[Darnon]

The acceptance of MSRP may apply to Japanese manufacturers who have long priced and sold their cars at or near MSRP. But the Big Three Detroit manufacturers have a long, long, long tradition of jacking up MSRP to inflated values and offering big rebates and discounts to court customers.

The US manufacturers have done it to themselves by training us to expect discounts on a regular basis. I don’t trust the Maverick MSRP, and the fact I can buy one at below “invoice” (another price inflation game) from places like Granger just reinforces the fact it IS a game.

Granger and the like are a little bit different because they're leveraging losing/breaking even on the front end of individual sales and making up for it with the manufacturer volume or allocation incentives. Or calculating a certain number of buyers won't take delivery resulting in units that can be marked up.

Inflated MSRP coupled with big rebates also works as a convenient fib by manufacturers to massage the loan-to-value numbers facilitating consumers cycling negative equity or slightly marginal credit/debt-to-income.

 

[Drkuhar]

Isnt the bank loan structure and insurance price based around mrsp. if so what does does above mrsp sales do to those items and does it trickle down to those only paying msrp

 

[Dechion]

One of the issues that I've heard voiced about paying over MSRP based on market conditions is that with the length of time people are waiting for their Mavericks the market is changing.

As a for instance, I ordered a hybrid lariat lux with sunroof back in the fall of 2021 and was told it would be about 32K (I had the exact number but don't have it on me).

I put down a deposit and waited.... and waited... like most of us here. I'm still waiting, but at least its finally been built.

Anyhow, when I ordered I was told 32K. Its now up to 35k. The private offer basically means thats a wash, so no complaints.

If my dealership were to decide its not going to be 35k, but 40k upon arrival (knowing that if I back out it goes on the lot and someone will give them 45k for it before sundown) I think I'd be justified in being pissed off.

It hasn't happened to me, but I've read of several folks it has happened to.

I don't have a problem with dealerships selling for what the market will pay, though I think the loss of goodwill might be bad for them in the long run.

I do have an issue with dealerships that try jacking up the price once someone's order has arrived.

 

[OrangeBlue]

You know why MSRP exists?

Because before the Monroney sticker was mandated in 1958, dealers would make "the list" price whatever they thought they could get away with.

I'm guessing that little old ladies got their pocketbooks cleaned out regularly. It's a starting point, people. I've paid MSRP and over MSRP when I had to, to get what I wanted.

Supply and demand, for better or worse, it makes capitalism work.

 

[Timothyd]

There always seems to be hot-button issues on the forum, one of which is paying over MSRP. While negotiating the purchase of a 2023 Maverick Hybrid XLT that someone had ordered and did not take, I got to thinking about MSRP and why people get so bent out of shape. Here are my simple and hopefully logical thoughts.

• What is MSRP? Manufacturers SUGGESTED Retail Price. It is not a set in stone price, just one suggested. Up until a couple of years ago, there were ads everywhere indicating $3K, $5K, even up to $10K off MSRP on certain vehicles, but not on all vehicles, the difference being the demand. BTW: Have you ever suggested your kids do a certain thing, and they do not follow your suggestion?
• It totally depends on what the market calls for. Have you noticed things discounted at various places? Most often, these are things that are slow sellers, so stores drop the price. Obviously, the Maverick is not a slow seller.
• As long as the supply and demand issue continues, we will see such things. There will probably come a day when you can buy Mavericks below MSRP, but that will come about when there are lots of them on dealer lots, which obviously is not now. As a side note, I never thought I would have to pay $125 an hour for an electrician, but that is going rate where I live based on supply and demand.
• My modus operandi is as follows – buy what you can afford, buy what you need if you can afford it, buy what you want if you can afford it and justify it.
• Make your own decision about what you are willing to pay, and do not criticize those who are willing. It is not your money; it is theirs.

No, I am not a dealer, do not work for a dealer and have no relatives that work for one. I am just a simple man, business owner who will be buying my 101st new vehicle this weekend (many for business and some for personal).

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