Should you pay MSRP for a new car?

When buying a new car, it's common practice to negotiate down from the car sticker price, or MSRP, but it's not always possible. You can expect to pay MSRP for a new car that's in high demand, or if you're shopping in a location without much competition. If you're purchasing a car released in the past few months, you aren't likely to negotiate a price reduction, especially if the new release was a highly anticipated model. Demand drives the price, and if a car is selling out as soon as it comes into stock, there isn't likely to be any reduction in the MSRP or car sticker price.

Demand drives price, so popular new cars often sell for MSRP.

Geographically isolated areas might charge MSRP due to demand. If people who live in a specific area aren't willing to travel farther away to find better deals, lack of competition allows dealerships in that area to charge more.

You should also expect to pay full price if you're looking for hard-to-find features of a specific car make and model. For example, if a specific car model uses automatic transmission, you may have to search far and wide to find one with manual transmission. If you know how hard the car is to find, the dealership probably does too, and they can charge accordingly.

Finally, some dealers have policies that dictate when they charge car sticker price or MSRP. The dealership's policies will trump what individual salespeople can do for you. If you know a dealership has a policy of charging full price, you may want to consider searching elsewhere for your new car.

There's nothing wrong with paying full price for a new car, especially if it meets all your needs and you can afford it. If you're looking for something on a tighter budget, consider buying a used car or looking at a common model that might have a more negotiable price.

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