Question regarding Auto pricing?
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Suzuka Master
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Question regarding Auto pricing?
Someone is trying to tell me that by adding OPTIONAL features to a a vehicle, the base price will also increase. For example, if they add optional heated seats to Mustang, the base price would increase. This makes no sense at all.
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This is how they tried to explain it:
Okay let me explain this to you. When you add an option to a vehicle, the manufacturer has to have additional people on the assembly line, additional machinery on the line, additional space on the line, and typically the more options you have on a particular vehicle it slows down the production line to a certain extent. All of the above things cost money. Rather than lump all those costs into just the option as well having a built in profit for it, which would typically push the price of that option out of reach for what someone is willing to pay for it, they spread it out over the entire line and bump up the MSRP. This way they can keep the price of the option lower and entice more to purchase it. Also by doing this, if the popularity of the option is less than expected, it's not a total loss since part of the cost has already been covered by the car itself.
Okay let me explain this to you. When you add an option to a vehicle, the manufacturer has to have additional people on the assembly line, additional machinery on the line, additional space on the line, and typically the more options you have on a particular vehicle it slows down the production line to a certain extent. All of the above things cost money. Rather than lump all those costs into just the option as well having a built in profit for it, which would typically push the price of that option out of reach for what someone is willing to pay for it, they spread it out over the entire line and bump up the MSRP. This way they can keep the price of the option lower and entice more to purchase it. Also by doing this, if the popularity of the option is less than expected, it's not a total loss since part of the cost has already been covered by the car itself.
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Are you talking about a new or used car? Generally when buying a new car, you do have to pay extra for options, it gets added to the MSRP and the Invoice. It depends if the parts are factory installed or dealer installed. Factory installed (or port installed) options will be shown on the window sticker and added to the MSRP and invoice, but you won't see the invoice price on the window sticker, obviously. Dealer installed options/accessories will not be shown on the sticker, it would be added to another paper that they usually tape to the window next to the sticker to show what was added. It's not that hard to understand, really..
Ed
Ed
#10
I love cars!
But this person is saying that along with the increase due to the option price, there's an additional bump in the base price (as opposed to the MSRP which includes any charges for options)
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Options have invoice price and MSRP just like the 'base price' of the car. You can find the markup for each option on Edmunds. Typically, the markup % is quite a bit higher on options that the base price of the car.
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