How to Read a New Car Sticker

Fifty years ago the Federal government passed legislation requiring all U.S. dealers to attach labels to every new car listing essential information about the vehicle’s pricing. Today, ironically, those same window stickers are regarded as somewhat baffling, and are largely ignored by most buyers. But the Monroney sticker, named after the Senator who introduced the legislation, carries valuable information from which to draw upon when negotiating the price. It also provides a way for dealers to showcase their products and services. What follows is a detailed explanation of the contents of the sticker, plus pointers on how to work the information into pricing negotiations.

Vehicle Description
This section contains all the basic information about the car including the Vehicle Identification Number (VIN), which should match the VIN on the driver’s side dashboard at the base of the windshield. It lists the color, make and model, what type of transmission (automatic or standard) and the type of engine (V6, V8, and so forth).

Standard Equipment
Standard Equipment refers to all the features that are included with the vehicle at no extra charge. That means if it lists, for example, passenger side air bags or automatic braking system, those items are considered a part of the Manufacturers Suggested Retail Price (MSRP). The vehicle’s trim level will also be listed. Most automobiles are equipped with different trim levels, with more expensive versions having more features, upgraded engine, and enhanced interiors. Sometimes features listed as standard can be traded for those listed as optional and may be incorporated into pricing negotiations. Warranty information will also be included here which tells the number of years or miles the warranty will last, power train coverage (engine, transmission and axles), comprehensive (parts and labor), corrosion (rust damage).

Pricing
Perhaps the most important section on the sticker, this section lists the charges that make up the dealer’s asking price, including MSRP, Optional Equipment, and Destination Charge. The MSRP is the base price without optional equipment or the destination charge and represents a certain percentage over the dealer’s invoice price (the invoice price, incidentally, is higher than the actual cost to the dealer). The dealer can list the car for more than the MSRP and that amount will appear in the Dealer Markup Section. Pricing negotiations should settle somewhere between the invoice price and the MSRP, and can depend largely on how eager the dealer is to get the car off the lot. One exception is the Saturn. General Motors will allow dealers to deviate from their MSRP, but do not encourage it because they adhere to a “no haggle, no hassle” pricing policy.