Dealers charging thousands over MSRP - scammers

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The days of negotiating with dealers for $5,000 less than sticker price are over (at least for now). It's simply supply and demand. Dealer inventory is incredibly low and as long as there are people willing to pay $5,000 over MSRP for a vehicle, they will charge that amount. It's not sleazy - it's what the market is like right now. Are homeowners sleazy when they sell their homes for more than what they're appraised for? Are bars and restaurants sleazy because they charge $40 for a bottle of wine you can buy at the store for $20, or $8 dollar for a beer you can get for $3?

You used to be able to buy cars for less than MSRP primarily for two reasons - either the dealer received a rebate from the manufacturer that allowed the dealer to buy the vehicle from the manufacturer for a price less than MSRP that the dealer then flowed down to you, so you were also able to buy the vehicle for under MSRP, or the dealer was willing to "take a loss" on an individual vehicle that they sold to you at less than what the dealer paid the manufacturer because they received incentives from the manufacturer for exceeding certain sales targets (i.e. they would take a $1,000 loss on an individual car if that sale pushed them over the hurdle that got them $10,000 from the manufacturer). Neither of these things exist right now in this market - manufacturers don't need to provide incentives right now to move their inventory due to the supply/demand of the market.

In terms of them selling cars they don't yet have on their lot, I'm not sure I understand your complaint there. It's not like dealers are taking customer's money for cars and then not delivering the vehicles. Dealers have lists of vehicles that are in-transit and arriving at their dealership. Some will let customers reserve these cars by putting down a deposit so that they can come in and buy the car once it arrives on their lot. No one is getting scammed by paying for a car that never arrives. And if a customer was actually dumb enough to pay cash for a car that is not on the lot and that they've never seen, then shame on them.

You sound like a car salesman justifying your dishonest ethics. Do I think that the car dealers and oil companies jacking up the costs of cars and gas is just good business and the same as a restaurant marking up a bottle of wine? No. It's more like grocery stores marking up baby formula just because they can. It's just greed and taking advantage of people in a crisis. The won't forget the greed of the car dealers.

DP here, but you are forgetting that the dealership is selling fewer vehicles overall because the supply is so limited. They still have to cover their overhead costs and salaries even though they don't have as much product to sell. A markup helps cover that. Is a $5K-$10K markup reasonable and necessary? Maybe not, but there are considerations other than pure greed for marking over MSRP. You can always choose to just buy a different car or drive your current car for longer.

Dealership profit centers are not in new car sales. Generally new cars account for about 60% of sales but only 25% of gross profits even after taking into account F&I products (loan rate markups, etc.) and dealer add-ons. Used vehicles account for about one-third of sales and another 25% of profits. Servicing vehicles/parts accounts for the other 50% of profits. Marketplace adjustments are just a cash grab by dealerships when MSRP is already roughly 4-9 percent over invoice. Average dealer profit per vehicle (PVR) on new cars has doubled since the start of 2021, and roughly tripled since 2019. It is now over $5200 — up from about $2100 — with scant inventory. Overall dealer profits have more than doubled since 2020. So it’s got nothing to do with “covering overhead.”

The average price for a new car purchase is in excess of $47,000, with a 67 month loan, which is more than a $636 monthly payment. None of this is sustainable economically for consumers. Look for used car prices to drop significantly as we see a wave of defaults and repossessions due to upside down loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We bought a car in March slightly under MSRP. Buy the last day of the month or quarter for a better deal.

That only works if they need to move cars to hit manufacturer incentives. In this climate, everything already sells, so they aren't under any pressure

It also works because sales generate commissions and those are important when your salary depends on this.

[Anonymous]

Anonymous wrote:Were buyers “greedy” for trying to pay less than MSRP before the pandemic?

This is silly. It was a different model. Manufacturers provided cash on the hood in the form of rebates and incentives to consumers. They also provided holdback, dealer cash and many types of incentives directly to dealers. You sometimes could negotiate downward from supposed “invoice” depending on incentives. It was in the dealer’s interest to sell the vehicle at a discount as opposed to “punching” it to be used as a loaner snd sold as used with a few hundred miles to make incentives or allocation based on sales quotas.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought a car in March slightly under MSRP. Buy the last day of the month or quarter for a better deal.

That only works if they need to move cars to hit manufacturer incentives. In this climate, everything already sells, so they aren't under any pressure

It also works because sales generate commissions and those are important when your salary depends on this.

Sales only occur if the sales manager signs off on the price. They have almost no reason to give end of the quarter deals now

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought a car in March slightly under MSRP. Buy the last day of the month or quarter for a better deal.

That only works if they need to move cars to hit manufacturer incentives. In this climate, everything already sells, so they aren't under any pressure

It also works because sales generate commissions and those are important when your salary depends on this.

Sales only occur if the sales manager signs off on the price. They have almost no reason to give end of the quarter deals now

Depends on the car model, how long it’s been on the lot and if the manager gets a taste in the form of commission.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought a car in March slightly under MSRP. Buy the last day of the month or quarter for a better deal.

That only works if they need to move cars to hit manufacturer incentives. In this climate, everything already sells, so they aren't under any pressure

It also works because sales generate commissions and those are important when your salary depends on this.

Sales only occur if the sales manager signs off on the price. They have almost no reason to give end of the quarter deals now

Depends on the car model, how long it’s been on the lot and if the manager gets a taste in the form of commission.

Nothing desirable spend more than a week on the lot now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The days of negotiating with dealers for $5,000 less than sticker price are over (at least for now). It's simply supply and demand. Dealer inventory is incredibly low and as long as there are people willing to pay $5,000 over MSRP for a vehicle, they will charge that amount. It's not sleazy - it's what the market is like right now. Are homeowners sleazy when they sell their homes for more than what they're appraised for? Are bars and restaurants sleazy because they charge $40 for a bottle of wine you can buy at the store for $20, or $8 dollar for a beer you can get for $3?

You used to be able to buy cars for less than MSRP primarily for two reasons - either the dealer received a rebate from the manufacturer that allowed the dealer to buy the vehicle from the manufacturer for a price less than MSRP that the dealer then flowed down to you, so you were also able to buy the vehicle for under MSRP, or the dealer was willing to "take a loss" on an individual vehicle that they sold to you at less than what the dealer paid the manufacturer because they received incentives from the manufacturer for exceeding certain sales targets (i.e. they would take a $1,000 loss on an individual car if that sale pushed them over the hurdle that got them $10,000 from the manufacturer). Neither of these things exist right now in this market - manufacturers don't need to provide incentives right now to move their inventory due to the supply/demand of the market.

In terms of them selling cars they don't yet have on their lot, I'm not sure I understand your complaint there. It's not like dealers are taking customer's money for cars and then not delivering the vehicles. Dealers have lists of vehicles that are in-transit and arriving at their dealership. Some will let customers reserve these cars by putting down a deposit so that they can come in and buy the car once it arrives on their lot. No one is getting scammed by paying for a car that never arrives. And if a customer was actually dumb enough to pay cash for a car that is not on the lot and that they've never seen, then shame on them.

You sound like a car salesman justifying your dishonest ethics. Do I think that the car dealers and oil companies jacking up the costs of cars and gas is just good business and the same as a restaurant marking up a bottle of wine? No. It's more like grocery stores marking up baby formula just because they can. It's just greed and taking advantage of people in a crisis. The won't forget the greed of the car dealers.

This is a ridiculous comparison. The shortage of cars is not at all the same as the shortage of baby formula. What an entitled whiner you are. I am not a car dealer btw. I am someone who is aggressive about saving money when I buy a car. I would never whine about the prices. There is a shortage of cars, thus the prices have gone up. I'm not a communist like you.

[Anonymous]

some dealerships do this. some do not.

don't buy from the ones that do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The days of negotiating with dealers for $5,000 less than sticker price are over (at least for now). It's simply supply and demand. Dealer inventory is incredibly low and as long as there are people willing to pay $5,000 over MSRP for a vehicle, they will charge that amount. It's not sleazy - it's what the market is like right now. Are homeowners sleazy when they sell their homes for more than what they're appraised for? Are bars and restaurants sleazy because they charge $40 for a bottle of wine you can buy at the store for $20, or $8 dollar for a beer you can get for $3?

You used to be able to buy cars for less than MSRP primarily for two reasons - either the dealer received a rebate from the manufacturer that allowed the dealer to buy the vehicle from the manufacturer for a price less than MSRP that the dealer then flowed down to you, so you were also able to buy the vehicle for under MSRP, or the dealer was willing to "take a loss" on an individual vehicle that they sold to you at less than what the dealer paid the manufacturer because they received incentives from the manufacturer for exceeding certain sales targets (i.e. they would take a $1,000 loss on an individual car if that sale pushed them over the hurdle that got them $10,000 from the manufacturer). Neither of these things exist right now in this market - manufacturers don't need to provide incentives right now to move their inventory due to the supply/demand of the market.

In terms of them selling cars they don't yet have on their lot, I'm not sure I understand your complaint there. It's not like dealers are taking customer's money for cars and then not delivering the vehicles. Dealers have lists of vehicles that are in-transit and arriving at their dealership. Some will let customers reserve these cars by putting down a deposit so that they can come in and buy the car once it arrives on their lot. No one is getting scammed by paying for a car that never arrives. And if a customer was actually dumb enough to pay cash for a car that is not on the lot and that they've never seen, then shame on them.

You sound like a car salesman justifying your dishonest ethics. Do I think that the car dealers and oil companies jacking up the costs of cars and gas is just good business and the same as a restaurant marking up a bottle of wine? No. It's more like grocery stores marking up baby formula just because they can. It's just greed and taking advantage of people in a crisis. The won't forget the greed of the car dealers.

Do you understand that car dealers are in the business of making money? Do you think they should make less money because you have the sadz over car prices?

You are like a coworker I had who heard that I was preparing to sell my house. He bugged me every time he saw me at work about giving him the first chance at my house. What does that even mean? It was a hot market and I had a great house in a great location. Every day he complained about not being able to afford anything in this area and how small and crappy his townhouse was and how he needed a break because his wife wanted a house. His wife did not work and they could not afford to buy my house. The gall of this guy thinking I would take less money for my most valuable asset just to make him happy was beyond. The guy is an entitled babyman. My house sold well over asking and I never contacted him.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The days of negotiating with dealers for $5,000 less than sticker price are over (at least for now). It's simply supply and demand. Dealer inventory is incredibly low and as long as there are people willing to pay $5,000 over MSRP for a vehicle, they will charge that amount. It's not sleazy - it's what the market is like right now. Are homeowners sleazy when they sell their homes for more than what they're appraised for? Are bars and restaurants sleazy because they charge $40 for a bottle of wine you can buy at the store for $20, or $8 dollar for a beer you can get for $3?

You used to be able to buy cars for less than MSRP primarily for two reasons - either the dealer received a rebate from the manufacturer that allowed the dealer to buy the vehicle from the manufacturer for a price less than MSRP that the dealer then flowed down to you, so you were also able to buy the vehicle for under MSRP, or the dealer was willing to "take a loss" on an individual vehicle that they sold to you at less than what the dealer paid the manufacturer because they received incentives from the manufacturer for exceeding certain sales targets (i.e. they would take a $1,000 loss on an individual car if that sale pushed them over the hurdle that got them $10,000 from the manufacturer). Neither of these things exist right now in this market - manufacturers don't need to provide incentives right now to move their inventory due to the supply/demand of the market.

In terms of them selling cars they don't yet have on their lot, I'm not sure I understand your complaint there. It's not like dealers are taking customer's money for cars and then not delivering the vehicles. Dealers have lists of vehicles that are in-transit and arriving at their dealership. Some will let customers reserve these cars by putting down a deposit so that they can come in and buy the car once it arrives on their lot. No one is getting scammed by paying for a car that never arrives. And if a customer was actually dumb enough to pay cash for a car that is not on the lot and that they've never seen, then shame on them.

You sound like a car salesman justifying your dishonest ethics. Do I think that the car dealers and oil companies jacking up the costs of cars and gas is just good business and the same as a restaurant marking up a bottle of wine? No. It's more like grocery stores marking up baby formula just because they can. It's just greed and taking advantage of people in a crisis. The won't forget the greed of the car dealers.

This is a ridiculous comparison. The shortage of cars is not at all the same as the shortage of baby formula. What an entitled whiner you are. I am not a car dealer btw. I am someone who is aggressive about saving money when I buy a car. I would never whine about the prices. There is a shortage of cars, thus the prices have gone up. I'm not a communist like you.

You seem quite agitated.

[Anonymous]

So, who can recommend a dealership in the DMV or maybe farther west in Maryland that isn't charging over MSRP? I'm going to start looking at Hondas and Hyundais soon. I have a 10-year-old Honda now, and will keep it if I must, but would like something with more safety features.

[Anonymous]

Simple economics 101. Supply and demand. When more people wants something there isn’t enough of, prices go up.

[Anonymous]

Dealers are outdated and should be cut out

[Anonymous]

All the “factory” and “MSRP” prices are made up. Ignore them, figure out the car you want, and draw a circle on a map of how far you want to drive. Then call all the dealers in the circle for a quote.

[Anonymous]

You can’t just ignore MSRP or invoice under any circumstance. Dealers hold all the leverage right now and they know it.