How To Win The MSRP Game

Many of us dread the storm on the horizon when driving onto the auto dealership lot to buy a new truck. What you know can save you big bucks.

The excitement of buying a new vehicle is often overshadowed by the knowledge that we might be walking into an ambush where we'll be pressured, lied to and likely leave wondering if we got a good deal.

Buying your next hunting rig can be a much better experience if you go in prepared. The salesman is hoping you'll go shopping without knowing how much the dealership paid for the truck you want, how much others are paying for similar models, whether any discounts are available or how much you should pay for a loan.

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Without that information, you could end up paying thousands more than you need to. Before getting into any negotiations, decide which truck you want and how much you can spend. All new trucks come with a Monroney sticker that tells you how the truck is equipped and the manufacturer's suggested retail price (MSRP).

This number is good to know when you're comparing different trucks of the same year, make and model. Use a copy of this window sticker to do your homework at or Enter all the information you're asked about engines, cab configurations, accessories and even the color into the price calculators, which help you price the truck you're considering.

You can also build a truck from the ground up with the exact equipment and option packages you (1) must have (2) want to have and (3) would like to have, but it's not a deal breaker. Your goal at Edmunds or Kelley Blue Book is to find three prices. First is the MSRP, which should be very close to the suggested retail price on the sticker.

If it is, then you know you've put in all of the right information. Next is the invoice price. This is the price the dealer paid for the vehicle. Finally, look for the fair market price. Edmunds calls this "What Others Are Paying"and Kelley refers to it as "The New Car Blue Book Value." It should be somewhere between the retail and invoice prices.

Keep in mind that this fair market price is based upon the actual pricing information for the exact truck in your area. Another way to double check this figure is to consider the profit the dealer should make. A good number is $500-700 over pure dealer invoice, sometimes called the triple net invoice, which factors in hold back, advertising and flooring credits.

Rebates and cash back can be great ways to save you money. Find them in the incentives info section at, which will not only tell you the programs available to the buyer, but also what dealer incentives are available for that particular truck. For example, a Ford F150 might have a $2,500 rebate to the buyer and also have an additional $2,000 in "dealer cash." Always include the dealer cash when calculating what the dealer is actually making from the sale.

Get your financing options figured out well in advance of visiting the dealer. A recent survey of major lenders showed the average annual interest rate for 36-,48- and 60-month auto loans is right at 4 percent. Check online to see whether any rebates or low-cost financing options are available on your truck. Pick a bank or finance company offering one of the best deals. You can usually apply online and be approved within hours, if not minutes.

Showing up with your own loan protects you from one of the most expensive traps in the auto dealer game: finance charge markups. When customers don't know how much an auto loan should cost, dealers can add 3 percentage points or more to the interest rate its lenders are willing to charge. The dealer and lender split the extra profit, and the practice is legal. Dealers are not required to inform you that you can get a lower interest rate.

The average truck deal in the United States nets the dealer a profit of $2,800. Of this profit, $1,000 comes from financing and the sale of back-end products such as extended warranties. You can usually buy an extended warranty from your credit union for about 50 percent of the dealer's price, and although the salespeople might try to pressure you into buying this warranty at the point of purchase, it can be bought anytime prior to the factory warranty expiring.

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