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  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, powertrain 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.

OPTIONAL EQUIPMENT: Features that do not come as standard equipment are listed here along with the additional costs associated with them. Some vehicles are "loaded" with additional features, but the price of the car increases accordingly. Often equipment is bundled into packages that generally costs less than they would purchased separately. Look these packages over closely since a package might contain many features you do not really want. If the features you want add up to less than the package, it will be cheaper to buy them separately. As mentioned earlier, the dealer may agree to trade options with those listed as standard. It won't hurt to ask.

DESTINATION CHARGE: This charge corresponds to the cost of shipping the vehicle from the plant to the dealer and is rarely negotiable. This charge will be included in the final price of the car.

DEALER MARKUPS: When an automobile is particularly popular the dealer can increase the costs of an automobile above the MSRP. In this instance you may want to check with other dealers to determine whether this extra charge is reasonable. The markup is also negotiable.

ADDITIONAL INFORMATION: Occasionally dealers will install their own options such as luggage racks or upgraded audio systems and generally appear on a separate sticker. These added features may, in fact, be covered by a different warranty. In addition, some of the add-ons are designed to enhance profits or recoup advertising expenses. Think about whether the increased costs for things like rustproofing, undercoating, and extended service contracts are important enough to you. Generally these additional enhancements are not necessary and should be viewed with a critical eye.

ASSEMBLY INFORMATION: If nothing else, this section will underscore the global nature of the auto industry. Here you will find the location of the assembly plant, the engine and the transmission parts. Domestic parts and cars include the U.S. and Canada, while all others are considered imported. It may sometimes provide a breakdown by percentage of domestic and foreign parts as well. Sources in the industry claim all cars sold today include at least some non-domestic parts.

FUEL ECONOMY: The EPA has mandated that all stickers include fuel economy information, or how many miles to the gallon a given vehicle type averages annually including city, highway and combined conditions. There has been, however, some concerns by dealers and consumer groups alike that these figures do not accurately reflect real driving conditions. Nonetheless, you can get a general idea of the car's fuel consumption by reviewing the "actual mileage" section which tends to provide more realistic information.

There is no hard and fast rule about where this information appears on the sticker. You will likely need to review how the information is arranged. Moreover, as you negotiate for the price for the car the dealer needs to make a profit or she will not want to sell you the car. Propose a price slightly below what you would be willing to pay, and you can probably come to an acceptable agreement. Bear in mind a reputable dealer wants to keep your business, not just sell you a car. Be reasonable and realistic and negotiations will likely yield a much more desirable outcome.