Gas prices where they are means it’s time to go all motorcycle and 65 mpg
My car got fucked and it was either buy a new one or pay a premium for a used one. It was a shit sandwich either way.
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Yeah when ya get forced into I get it. Anyone buying on by choice is crazy. I did sell our minivan and pocketed the cash
There can certainly be some bad apples in the car business…trying to force sell things you don’t want. Not a good business practice either but that’s not the same thing as just inflating a markup on the price of the car. For clarity…your “excessive market adjustment” causing price inflation concern is off base in that regard.
New car pricing is more fixed due to the standard invoice/MSRP markup…which is typically somewhere around $2000-$3000 (5%-12% based on the price range of the car). It’s used cars that are selling for way more than they should…but the dealers are paying that same premium to get them on the lot… So the THEIR cost and YOUR price are both higher than they should be but the % of markup between the cost and the price is still the same $2000-$3000/5%-12% range.
Similar to the housing market right now. Houses that were worth $250K 2 years ago are worth $400k now. There’s no Housing Dealer marking up houses indiscriminately…it’s supply and demand setting the market price. You get more for selling YOUR house but you pay more buying another house…and Covid has affected building materials making building a house ridiculous as well.
It’s supply and demand…and Covid supply chain issues driving higher prices…nothing else.
A market adjustment is just a markup for no reason. A special edition Rousch Mustang where only 1000 are made will still have a standard Invoice/MSRP markup of 5%-12%. But a dealer slaps an additional $5000 on the price for Market Adjustment because of the low supply and high demand (maybe your Telluride issue is similar to this). No products are associated with it…just a markup because they can. That’s a Market Adjustment and that is NOT what dealers are doing today. Not at all.
A dealer sells a lot of aftermarket products to make money: GAP Insurance, Warranty, Lowjack, Etch, Paint Protectant, Fabric Protectant, Tire & Wheel protection, key replacement, Maintenance Packages…you can say no to all of them. But they are all products that the dealer pays for and If they are being offered to be added to the car and you say “no”…that’s not gouging or forced Market adjustment. That’s them trying to sell you more products.
Dealer addendums are similar too and have been around for decades…they weren’t invented to solely markup prices during a Covid induced supply shortage. If a car is delivered to a store and that store wants to add some sizzle to it to help it sell more quickly, they may add tinted windows, alloy wheels, a tow package, a Navigation system, pinstriping, a spoiler…whatever. But you will sometimes see an “addendum” on a Window sticker that breaks this down. But it is not a “Market Adjustment” it is a cost breakdown for real products they added to the car…yes with some profit built in. Is there ANYTHING that ANYONE sells you without profit built in?? Profit is not a bad word…especially when a typical markup/profit for a dealer is 12% or less on average, yes, even today. Furniture markup is 100%…Jewelery can be up to 300%…cars are typically at 10%…and are closer to 12% today.
I service 120+ dealers between Fort Mill and Winston Salem and I see 4-6-8 dealers every day of every week and have done so for 30+yrs…and all I do is talk business with these guys. Kia stores, Chevy stores, Ford stores, Hendrick stores, Sonic stores, Lexus stores, et al…and again none of them are using this crisis to gouge customers…they just aren’t.
I literally just had this conversation with one of the stores you mentioned you visited above…and they are 100% not upcharging the price of their new cars with a market adjustment as you claimed. No store today wants to risk being on Dateline or Action 9 or whatever…especially corporate groups like Hendrick, Sonic, AutoNation, etc). Do they have addendums on some cars…yes. Will they offer aftermarket products like I mentioned above…yes. But they are not just adding hundreds or thousands of dollars to car prices for no reason other than because they can.
Here’s some additional perspective on new cars…2 stores today for me confirmed they have less than 10 new cars on the ground. They used to carry 100+. They used to sell 100+ new cars per month and now sell about 50. Again, markups for new cars is still about $2000-$3000 regardless of price of the car (5%-12%)…before and during Covid…that has not changed. Pre-Covid, selling 100 cars per month and having PLENTY of inventory and having to aggressively price for competition over the internet, they were having to negotiate off of MSRP and sell cars at low margins making maybe $500-$1500 per car. TODAY, they are selling half of the cars but now with no negotiating below (but also at no more than) original MSRP which again is a markup of maybe $2000-$3000. So, the dealer is only making marginally more (maybe 5%-7%) per car…but while selling selling 30%-40% less cars overall!!
But while dealers will try to sell you a whole lot of stuff you don’t want…yes, especially when their car sales are down 30%-40%…but they are NOT price gouging or adding on blanket market adjustments to the prices of their cars…it’s just not happening.
That’s a whole lot of typing in defense of price gouging.
According to the National Automobile Dealers Association, the average U.S. dealership recorded a net pretax profit of about $3.4 million through October — more than double the $1.6 million reported for the first 10 months of 2020
And it surpassed the $2.1 million in net pretax profit recorded for the average dealership for all of 2020, which itself was a record annual profit
https://www.autonews.com/dealers/nada-forecasts-record-2022-profits-car-dealers
Also they absolutely are handwriting price markups on window invoices. I didn’t take any pictures, but I saw them with my own eyes. “Market adjustment $9995”, etc. Go look. They’re still doing it today.
The bubble is a real concern that’s being talked about from both the dealer side and banking side.
Some dealers I talked to this week agree that when the chip shortage is resolved…that the manufacturers need to be SLOW about increasing inventory supply just for that reason. A huge immediate influx of inventory will drive down prices so quickly that the bubble will burst quickly in a big way. But if they slowly reintroduce the inventory levels, that will ease the prices back into normal ranges over a longer period of time that can allow the market to adjust without the bubble bursting.
But again…we’re due for another recession so maybe the bubble bursting is inevitable.
Next 2-3 years will be interesting.
Lmfao. That is only about protecting Dealer profits. Nothing more.
Absurd.
clt says jordan brand is the biggest joke. charge a premium for a football glove with a basketball player logo.
NOPE
I’m in them every day…and I literally haven’t seen one. Again…unless the Telluride is different…I don’t do much business with many Kia stores. And there could be some very select low production/high demand units that they exist on at some dealers…but it is rare. Even the new Broncos…some Ford stores are adding adjustment on them but a lot are not. The wait list even to order one of those is over 6mos long in some cases!
Other than that…I have been in 25+ stores over the last week…Lexus, Toyota, Chrysler, Chevy, Ford, Sonic, Hendrick…and I haven’t noticed any store with a widespread policy of adding market adjustment to their cars.
And…Profit in selling the car is not where the dealers make the bulk of their money. Record profits are more due to the service dept, backend products, rate markup, etc than front end pricing. The biggest jump in dealer profit that I have seen is in backend products and rate markup because the customers aren’t arguing about any of that (including rate) anymore because they just want the car. Dealers make way more money on rate markup and selling backend products (warranty, Maintenance, GAP, etc) than they do on the front end sales price.
Take an economics course one day. Flood the market with inventory and yes…the bubble where people own cars they paid $25k for is now worth $15k overnight and that’s a real problem.
You can laugh if you want.
I would but I already took a bunch of them in college. Sorry.
I’m still amazed someone would defend price gouging in any market / industry. It’s unconscionable, and in some cases illegal.
But I guess this just proves the point that there is always someone.
Is it price gouging with something like cars? Things like gas or food i get, but with something like cars?
Video about Manufacturers stepping in to end the price gouging:
https://www.autonews.com/dealers/ford-works-limit-dealership-markups-f-150-lightning-ev
I could do this all night. There are almost endless examples.
Also, ask @Niner_National about the markups he saw on the EV6. Those were particularly laughable.
Really the fact that Manufacturers are sick of how much it is damaging their brands is proof enough that its happening. Though there is plenty of visual, anecdotal, and reported evidence.
Did you really just spend all that time making personal attacks because I provided evidence?
And then said I have emotional problems?
yeah. I am out of this convo.
I guess since I am a mod I am supposed to look the other way on the incessant personal attacks.
Instead, I am going to offer this list that folks are keeping of Ford Dealerships that are not charging markups. Just in case someone needs a car or just wants a Bronco:
I know Hyundai dealership I went to told me they were adding $2000 on every car they sold. I didn’t check any other cars at the Kia dealership because I peaced out as soon as I saw the ev6 markup of $10,000.
I don’t recall seeing any markup on town and country ford window stickers when I went there to get a trade in value for my Escape.