What is the difference between MSRP and Invoice?

MSRP is the manufacturer suggested retail price which is displayed by car dealers inside the car through stickers. It is only the retail price suggested by auto dealers, and the dealer can sell the vehicle for higher or lower than this. Invoice is the actual price paid by the auto dealer to the manufacturer, and it is more economical than what you see on that MSRP. There is also another benefit in the form of holdback (2-3% of car value).

Your target number should be as close as possible to the invoice price. The difference between the MSRP and invoice price is the car dealer’s potential profit.