In 2022, purchasing a car might be a major hassle. Dealer markup is a problem, and some cars are not only difficult to find at all since dealers sell out of popular models. When a dealer sells a vehicle at a price higher than the MSRP (Manufacturer’s Suggested Retail Price), this occurs. This typically takes the form of a “market adjustment,” which can range in value from a few thousand dollars to, in certain more extreme circumstances, up to double the price of the car.
Since years, this has been a contentious practice, with some dealers arguing that it’s required to make up for losses on other transactions (or, more recently, to make up for a lack of volume owing to chip shortages), and customers feeling as though they’re being taken advantage of (because they actually are being taken advantage of).
Selling required “protection kits” for the automobile that offer little to no protection for the accessories, seats, or glass is another shady practice by dealers. They’ll either say it’s “already installed” or they’ll refuse to sell the car to you without the “protection,” which is a cruel joke on non-automotive savvy individuals.
Buyers can typically turn to the used market for relief when new car prices with markup and “protection packages” are too high, but in 2022 even that will be difficult. The demand for used automobiles is extremely high right now because new cars aren’t easily available to buy off the lot and drive away from. As a result, the price of a used car is frequently more than the price of a new car of the same make and model.
How therefore can consumers combat dealer markup?
There are numerous approaches. Customers can first conduct their homework in advance and find out the MSRP of the car they’re interested in. They can be certain that they aren’t being mistreated in terms of pricing in this way. To explore whether they can locate a better value, consumers might also shop around at various dealerships. This is frequently challenging because there are numerous dealerships selling the same automobiles for the same high costs, but it’s important to consider all of your options before making a decision.
Last but not least, customers might consider aftermarket choices like purchasing a car directly from a manufacturer or via an online car buying service. Although visiting a nearby dealership is more convenient, these alternatives frequently provide better rates and a wider range of selections.
However, dealers have found out how to make using the internet to research cars difficult since they are aware that this is where purchasers will look for information. Many dealer websites withhold the markup information, saving you from the unpleasant discovery when you visit the dealer with a pre-approval and are prepared to make a purchase. Or the website might not even mention a price at all, but state “call for price,” leaving you in the dark until you get at the dealer.
How some consumers are retaliating There is now a new website that’s trying to help car buyers fight back against dealer markup . Customers can report dealers that raise prices far above MSRP on the website simply named Markups.org.
According to the site’s About Us page, it was founded to compile markup information on a range of products offered by dealers and merchants. In order to gather information on different Toyota 4Runner and new-generation Tundra dealers who were inflating prices to take advantage of those who actually wanted those vehicles, the project started as a group of Google Docs pages in the middle of 2021. As a result, information on markups for Ford Raptors, Ram TRX trucks, HD pickups, and other vehicles was manually gathered.
Later, connections to its spreadsheets and papers were published in a sizable Toyota-focused newspaper, which generated a lot of attention and traffic. The Google Doc sheets have been combined and grouped on the brand-new Markups.org website. Additionally, they assert that they use web crawlers to compile and automatically add the markup data to their website from a variety of freely accessible, non-copyrighted user contribution lists.
The website’s user interface is really straightforward, but don’t let this fool you into believing that it doesn’t provide useful information for prospective car purchasers. I made the decision to look for Chevy Bolt EUVs, a vehicle I’d like to replace my Nissan LEAF with, in order to try it out. I haven’t had much luck so far in trying to find one for sale, much less get one for a fair price (even if I were to order one in).
It not only identified the worst offenders, who marked up their Bolts by thousands of dollars over MSRP, but it also identified some dealers that don’t mark up their Bolts at all. Several AutoNation dealers, I found, had extremely little markups of only a few hundred dollars, which is far more agreeable than the $5,000 markup some other dealers are attempting to extort from customers.
When I looked for a different car that I truly wanted, presuming I could find one for a reasonable price, it returned both positive and poor results. Sadly, I doubt I’ll ever be able to buy a Jeep Wrangler 4xe, but at least I’d know where to go to order one and avoid getting taken advantage of.
JUST BUY A TESLA, PLEASE. When the subject of dealers and markups is brought up on social media, I frequently see the suggestion that customers should only think about purchasing a Tesla. Tesla may simply increase the manufacturer’s pricing (which isn’t a suggestion) since it is the manufacturer selling directly to customers and does not engage in MSRP markups like “market adjustments” and “protection plans” the way dealers do.
I simply cannot afford a Tesla at the current pricing, and many other automobile buyers feel the same way. They once sold a $35,000 Model 3, but it was a basic car and is no longer provided, save possibly as a used car; nevertheless, they are now selling for more than the new ones. So asking angry customers to simply buy a Tesla has a lot in common with Marie Antoinette’s famous phrase, “let them eat cake.”
Therefore, resources like Markups.org are essential for those of us without access to a Tesla, even if we desired one.
Harry Wormwood from the 1996 film Matilda is the featured image. (Commentary, Fair Use)
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