When you walk into a dealership, the sticker price on the window isn’t the starting point. It’s usually somewhere in the middle. Dealers pay one price for a car and charge you another, and sometimes padded with extras you never asked for.

Here’s a breakdown of how new car pricing actually works, where markups stand today, and how to use that knowledge to your advantage.

Invoice Price vs. MSRP: What’s the Difference?

Every new car has two key prices worth knowing.

The invoice price is what the dealer paid the manufacturer for the vehicle. It’s not a secret, but dealers rarely advertise it. CarEdge publishes free invoice prices because we believe buyers deserve to know what they’re negotiating against.

The MSRP (Manufacturer’s Suggested Retail Price) is the sticker price. It’s set by the manufacturer and already includes a built-in profit margin for the dealer. Most buyers think of MSRP as the ceiling of negotiation. In reality, it’s often just the floor.

On top of the MSRP, many dealers add on extras — paint protection packages, wheel locks, nitrogen-filled tires, window tinting — that cost them very little but get bundled into the deal for $500 to $2,000 or more. Always ask for an itemized breakdown before you sign anything, and check out our guide to dealer add-ons to watch out for. 

Where Do Markups Stand in 2026?

Across the board, new cars are selling for roughly 3% to 5% over invoice price in 2026.

For mainstream brands like Toyota, Honda, Ford, and Chevrolet, most models are sitting around 3% over invoice. High-demand models like the new Toyota RAV4, a Honda Civic, or a top trim of the Ford F-150 can push that closer to 5%.

For most new cars, that equals between $1,000 and $4,000 over invoice to land at the advertised MSRP, assuming there are no dealership add-ons. More on that in a bit.

Luxury and sports cars are a different story. Brands like BMW, Mercedes-Benz, and Volvo tend to land at 5% over invoice or higher, and because the base prices are already elevated, the dollar amounts get significant fast. We can also see higher markups for high-end trucks like the F-150 Raptor, Ram 1500 TRX, or any model listed over $80,000.

CarEdge Concierge Jamer Heasley sees this play out regularly: “It’s common to see new cars priced $2,000 to $3,000 over MSRP. For luxury brands like Volvo, Mercedes-Benz, and BMW, 5% over invoice is common, and with higher prices, that often ends up in the $4,000 to $6,000 range.”

Not Every Car Is a Tough Negotiation

Here’s the part most buyers don’t hear: plenty of new cars are sitting on lots, and dealers with slow-moving inventory are often willing to deal.

CarEdge co-founder Ray Shefska, who spent years on the dealer side before starting CarEdge, puts it this way: “For the slowest-selling cars in America, it’s common to negotiate well below MSRP. A great deal is anything close to invoice price, or for last year’s models, even below the invoice price.”

A good indicator of how much leverage you have is Market Day Supply. MDS is a measure of how long current inventory would last at the current sales pace. A car with 90-plus days of supply is one where you hold the cards. A car with 20 days of supply? The dealer knows you’re competing with other buyers.

How to Negotiate Below MSRP

The best negotiators walk in knowing more than the salesperson expects. Here’s how to get there.

Know the invoice price. CarEdge publishes invoice data for free. See your invoice price here. Start every negotiation with that number in mind, especially for slower-selling models, or any car that’s been sitting on the lot for months.

Check Market Day Supply. Before you fall in love with a specific car, look up how it’s selling nationally. High supply means more room to negotiate. Low supply means you may need to adjust your expectations or consider alternatives. CarEdge Pro makes it easy.

Make dealers compete. Contact multiple dealers and let them know you’re shopping around. Email works well here — it keeps things documented and removes the pressure of a showroom.

Separate your trade-in. Dealers often blend the trade-in and new car numbers to obscure what you’re actually paying. Negotiate the new car price first, then talk trade. Take our trade-in checklist with you.

Watch for add-ons and fake fees. If a dealer says certain packages are “already installed,” ask for an itemized list and push back on anything you didn’t request. Here’s what to watch out for. 

If you’d rather skip the back-and-forth entirely, CarEdge Concierge handles the negotiation for you. Jamer and the team work directly with dealers on your behalf to secure below-MSRP pricing, saving buyers $2,200 on average.

Schedule your free Concierge consultation today

The Bottom Line

In 2026, dealers are marking up new cars 3% to 5% over invoice on average, with luxury and high-demand models pushing higher. That gap is real money — often thousands of dollars. But it’s also negotiable, especially if you know the numbers going in.Check invoice prices and Market Day Supply for free on CarEdge before your next car purchase. Or let our Concierge team handle it for you.