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Pricing Basics for First-Time Car Buyers

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Shopping for your first vehicle can be exciting, but it can also be overwhelming. From financial jargon to cryptic terms the salespeople use, the auto industry definitely has its own vocabulary. Make the process a bit easier, by reviewing these five commonly-used pricing terms.


MSRP simply stands for the manufacturer’s suggested retail price. The MSRP of a vehicle is the price tag that an automaker has given a specific model and trim line. The actual price that a dealer will sell a vehicle for can be a bit higher or lower than this amount.

Sticker Price

Also known as a vehicle’s “total MSRP,” this phrase refers to the bottom-line figure on the window sticker of a vehicle. The sticker price includes the model’s base price as well as any destination charges, add-on fees, and package discounts.

Invoice Price

This term refers to the amount printed on the invoice a dealer obtains from the automaker for a particular car. At many dealerships, the salespeople will usually show you the invoice for a vehicle you’re considering buying. It’s wise to review the invoice to see the price the dealer paid the manufacturer for the vehicle, as well as any additional fees like regional costs and advertising that the dealer paid for to purchase the model for their inventory.

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Kelley Blue Book Price

If you’re shopping for a used car, you’ve likely heard someone refer to a vehicle’s “Kelley Blue Book Price,” or its “blue book value.” This phrase just means the price tag that Kelley Blue Book has assigned to a certain model based on its unique criteria.

True Market Value

Like its name implies, True Market Value (TMV) is the market average of what other consumers are paying for the same model in your geographical location. Per Edmunds, the TMV price tends to be in between the sticker and invoice prices.

Good luck on finding your first vehicle! For more tips on financing your new ride, check out this article.

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News Sources: Edmunds, Consumer Reports