It's not just supply and demand, because the manufacturers have been pissed at the dealership markups, because it makes them look bad. And the manufacturers can't do anything about it because of state enforced middlemen in the car sale process.
And it's not scare quotes, I'm just using the phrase that they used, which I had never heard of before.
And, it was unreasonable, because of some details which I did not include, which is that the specific vehicle was listed as for sale on their website for $40k, but only when I called did they say that it was actually only for sale for $55k. That's a bait and switch.
Well there are destination charges/dealer prep/paperwork etc. I recently had to buy a car. And by all indications low-mileage used are hot tickets right now. Had to pay something like $500 in dealership charges which is more than I've paid in the past I'm pretty sure but not highway robbery.
Didn't even try to negotiate the sticker price but, to my surprise, was about to get the price for some "factory installed options" (which included a first aid kit!) added to my trade-in. So the used car situation cuts both ways.
I was probably pretty lucky to get the car in "only" six weeks.
Sure. One is clearly padding. The other is we're going to add a massive surcharge and if you don't pay it someone else will. I actually consider myself lucky getting a semi-reasonable deal in a not too extended timeframe on something I'm happy with in a supply-constrained environment.
>Do your scare quotes mean you think it's unreasonable? It's supply and demand, isn't it?
No, it's not reasonable when you're forced to go through a middleman who adds little to no value to the transaction and wants to take a massive cut. Ford is legitimately worried about dealership greed jeopardizing the success of the F-150 Lightning[1] and EV's in general, so they're moving towards direct to customer online sales for their EV's[2]. They've arguably been burned by greedy dealerships in the past with the Focus RS[3].
Some fees recoup costs. Some are explicitly for the purpose of getting more money from the buyer without putting it in the list price, and aren't a cost to the dealer at all.
No, I don't think they are. For example, a credit card processing fee doesn't raise the price of a gallon of gasoline.
There is supposed to be a difference between markup and a fee. We don't have to hash out what exactly the difference is, just observe that there is a difference.
It's a common grift to hide part of the price in unadvertised "fees" so that consumers will have a harder time comparing options but it is just that, a grift. It's deception.
Uh, despite the best attempts of credit card companies to hide the fact, their card processing fees do raise the price of gasoline. Before they held as much power over gas retailers, gas stations used to list a cash price and a credit price. The cash price was usually around a nickel cheaper. But now the merchant card agreements prevent having dual pricing (though some businesses try to get away with dual pricing).
I think we only care about the presentation of fees to consumers assessed separately from the advertised price. Countless costs of doing business (and markup) are built into the advertised price. At least it is very simple for the consumer to compare prices.
A per-transaction credit card fee doesn't raise the unit price. Getting hung up on the evolving details of gas stations and credit card processing isn't the point.
Don't forget that they'll advertise it as "15k off!" on their website but really they're just taking off some other market adjustment. It's ridiculous. Dealers cant go away soon enough.
Something being "supported by market conditions" is not a valid test for reasonableness. During disasters for example, all manner of unethical practices can be "supported by market conditions". Yet we enact laws against those things for good reason.
You also seem to forget the fact that much of those market conditions are a result of anti-competitive and anti-consumer laws guaranteeing their the status a middle men by force.
If for example consumers were able to buy directly from manufacturers but chose to pay more at a dealership because they thought the extra cost was worth some surplus value provided then you might have a point.
When market conditions dropped the price of gas in 2020 to record levels because demand was so low and supplies were high, I didn’t see people claiming we shouldn’t let gas stations do that because it enticed people to buy gas.
You seem very intent on defending this sort of behavior. I wonder why?
In my not so humble opinion, while the used market can do what it may, MSRP is MSRP. This goes for GPUs as much as it goes for cars. I understand shortages. I am ok with waiting lists. I do not appreciate profiteering. Any dealership that tried to stick me with such a markup not only would blow the sale, but would not get my business in the future.
I guess I don't get why people think they should be immune from paying a market price.
When you negotiate salary do you go for the most you can negotiate? Or do you accept minimum wage because someone somewhere suggested it to you? Why do you think any other transaction should be different? It's a brand new luxury SUV, it's not baby milk.
> MSRP is MSRP
Guess what... the MSRP includes profit (gasp!). As much profit as they thought they could get away with when it was set.
> Any dealership that tried to stick me with such a markup not only would blow the sale, but would not get my business in the future.
Ok so great this already limits how much they can charge. I guess someone else somewhere is willing the pay the price though, or they wouldn't charge it.
I think your logic is basically 'I don't want to pay that much'. Ok well they don't want to sell it for less, and it's their property. You'll have to go elsewhere. Sounds like you're happy with that so what's the problem?
> Any dealership that tried to stick me with such a markup not only would blow the sale, but would not get my business in the future.
Which is a completely valid reaction and the risk the dealership takes, and ultimately when the price rises to the point where they no longer attract buyers, the market corrects. That will be soon as the fed raises interest rates.
Market conditions explain the higher price, but why does the extra money go to the dealership rather than the manufacturer? I think something other than the market is at work here.
It's because they're collecting rents from having state legislation pretty much guarantee they're the only way to buy a car brand (other than Tesla). And though collusion might be hard to prove, it's pretty obvious to a shopper that the price transparency from the Internet is just as potent a weapon for dealers as it is for shoppers.
People are also buying up all the inventory of available cars and flipping them at CarMax for a profit. Look on CarMax and you see loads of brand new cars with 3-6K markup. That's who the dealerships are competing with.
The market conditions are set by the number of people trying to buy the cars and how much they're willing to pay.
The dealership meets the market price, not sets it. If their fee was unreasonable people would buy other cars until the dealer dropped their prices to something reasonable.
People don’t want to buy other cars just because the dealers are colluding and raising the prices despite adding no value.
When they do decide to avoid a car just because of the leeching dealerships, it hurts the manufacturer too
A major part of passive aggression is being subtle with hostility to avoid being exposed. If anything calling it out is poetic justice, but you’re welcome to just let it happen.
And it's not scare quotes, I'm just using the phrase that they used, which I had never heard of before.
And, it was unreasonable, because of some details which I did not include, which is that the specific vehicle was listed as for sale on their website for $40k, but only when I called did they say that it was actually only for sale for $55k. That's a bait and switch.