Thinking of buying a new car, but wondering what the difference is between the invoice price and the base price? Want to know what MSRP means?

We asked the Federal Trade Commission for definitions and distinctions, so that you can be better informed the next time you’re ready to visit a car dealer.

We know: How to Read a New Car Invoice

What is the INVOICE PRICE?

The invoice price is the manufacturer’s initial charge to the car dealer. In general, this number is HIGHER than the dealer’s cost because the dealer usually gets rebates and discounts subtracted from this price. If you’re buying a car based the invoice price (i.e. at invoice or 2 percent below invoice, etc.) ask whether the destination and delivery charges are included and don’t let the dealer add another destination and delivery charge again in the sales contract.

What is the BASE PRICE?

This is the cost of the car without options. It includes standard equipment and factory warranty. It’s printed on the Monroney sticker (read below).

What is the MSRP?

The MSRP is the Manufacturer’s Suggested Retail Price, also called the Monroney sticker price. By federal law, the Monroney sticker or label must be affixed to the car window. It shows the base price, plus the manufacturer’s installed options with the manufacturer’s suggest retail price. It also includes the transportation charge and the fuel economy or mileage.


This is the MSRP or Monroney sticker price plus the suggested retail price of dealer-installed options, such as additional dealer markup (ADM) or additional dealer profit (ADP), dealer preparation, and undercoating. It’s usually on a supplemental sticker.

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