How is MSRP calculated?

What factors go into calculating MSRP? I see it all the time in stores and car dealerships and want to know what really goes into it.

“This is a common question for a lot of us, so thanks for asking!
MSRP stands for Manufacturer’s Suggested Retail Price. MSRP is calculated based on how much it costs for a product to be:
  • Manufactured
  • Distribute
  • Sold
MSRP is calculated so that manufacturers, distributors, and retailers still earn a profit for the product. This recommended price is also designed to appeal to consumers, so the price can’t be too high or consumers won’t purchase the product and manufacturers, distributors, and retailers won’t make money.
A lot of retails refer to the MSRP as the sticker price and you’ll hear these used interchangeably, especially at retailers where negotiating price is common practice, like at a car dealership. Car dealerships have room to negotiate because they can legally list a car above the MSRP.
That’s why whenever you’re on the market to buy a new car, you should always do your research and be prepared to negotiate price to help you save money.
You can also save money on your car insurance, though you can’t negotiate rates. Instead, you can save money on car insurance by shopping around and comparing rates. The Jerry app makes comparison shopping easy by pulling quotes from the top providers and delivering the best deals to your phone in minutes for free.”
Rachel Juillerat
Answered on Sep 10, 2021
Rachel Juillerat has her Master's in Publishing & Writing from Emerson College. You can view her work in the Independent, Cupid's Pulse, and the Penmen Review. She has worked in personal finance for five years before transitioning to insurance. She lives in Boston, where she spends her time exploring small New England towns, learning new skills, and napping through her cat's zoomies.

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.
Let Jerry’s experts help you find savings on your car insurance!
No long forms or spam · Get quotes from 40+ carriers
Find insurance savings (100% Free)
4.7/5 Rating on App Store