Ridiculous Dealer Markups!

[Basil]

Back in October 2020, we found ourselves in need of a new SUV (our 2007 Santa Fe gave up with a busted timing chain tensioner after 318,000+ miles). The car we decided on was the new KIA Telluride. Unfortunately, KIA had underestimated the demand for this car and as a result they were very hard to come by. For example, only one dealer in New Mexico had a Telluride on the lot but that was already sold (but at least we could look at it). I called one of the dealers closest to us and asked about ordering one. Sure, no problem - the model / trim level we wanted was "only" $12,000 over MSRP! Yikes! Thanks, but I'll pass on that great deal!

More recently (last week), I saw a Telluride on another local dealer's lot that had a $5,000 mark up (at least it has come down a bit since last October). Anyway, this is why I was willing to order from a dealer in Texas and get a one-way rental car and drive 10 hours to pick it up in order to get a car under MSRP.

Well, just when I thought dealer markups couldn't get any crazier, someone posted this on a Kia forum - a "chain" dealer, Greenway, in Nashville adds an $18,000 "Adjusted Market Value" PLUS another $2000 "Lux Care" package (probably a coat of wax) so that they are selling the Telly for $20,000 over MSRP! Yikes!

I have never paid MSRP for a car in my life, let alone a ridiculous markup over MSRP!

 

[JPSmit]

Welcome to Covid! I have been watching this conversation elsewhere and there is a massive semiconductor chip shortage leading to production of vehicles being halted. (something like 700000 fewer cars.) This due (apparently) to underestimating the number needed and manufacturers being too conservative in ordering and the HUGE demand of every other electronic device on the planet. I also read that a new semiconductor factory costs in the neighbourhood of 15 BILLION to build. One of my guilty youtube pleasures is Hoovie's garage - he bought his wife a 2016? Land Rover last year and I think he said he could get 15k more for it today than he paid a year ago. He was also saying that apparently Porsche dealers have been assigned one car each this year. He drove past another dealer and said literally all the cars were preordered.

Anecdotally, my nephew spent the winter on Vancouver Island where he had a pickup that was a piece of cr*p. It finally died, and my sister was working with said nephew to buy something decent. The closest thing they could find was an overpriced pickup. The dealer himself said that normally he would have thirty trucks on the lot. Now he had 2 - one new and one used.

You may recall that my Kia died 2 weeks into Covid - I have no incentive to look and even less looking at the prices. (and so very happy my Midget has no semiconductors) Or at least the closest I have to a semiconductor is Lucas wiring.

 

[Gliderman8]

As with anything for sale, they can only get extra $$ if and only if people are willing to pay for it.

 

[Basil]

I'm sure that is a factor, JP, but there are still many dealers around the country selling Tellurides without the huge markups. Dealer markups have always been around in areas where the dealers feel people will pay. When I bought my Corvette, the dealer had a Vette on the floor with a $5000 markup. I went to the sales manage (a guy I actually knew) and said "I'm ready to factory-order a Corvette today, but I'm not going to pay a $5000 markup." I told him straight up, "I know what I can order this car for at other dealers around the country, so tell me what your best deal is and, if it's the right number, I'll write you a $10,000 check right now to place the order." I said I didn't care where I bought my Vette, but I'd like to keep my business local, but I'm not going to pay more than I have to. - I ended up getting the car at $3000 Under MSRP.

 

[NutmegCT]

Yep - there'll always be someone who says "buy it now, regardless of price! It's the one to get!". Same thing is happening with homes all over the USA. Potential buyers bidding up home prices, as owners triple last year's asking price "because they're hard to find".

A Kia Dealership Thinks Demand For The Telluride Means They Can Sell It For Nearly $80,000

The Kia Telluride (and its Hyundai Palisade cousin) have been hot sellers since their debut. Over 75,000 were sold last year. Some buyers were waiting months to get theirs because the factory literally couldn’t make them fast enough. None of that justifies dealer markups though. As Motor1...

jalopnik.com

yeesh

 

[Basil]

Yep - there'll always be someone who says "buy it now, regardless of price! It's the one to get!". Same thing is happening with homes all over the USA. Potential buyers bidding up home prices, as owners triple last year's asking price "because they're hard to find".

yeesh

My local dealer wanted $12,000 over MSRP. I called dealers all over the country and found one in Plano TX willing to order exactly what I wanted and, with my KIA military discount, I ended up paying $400 under MSRP. It was worth the 10-hour drive and 10 hours back to save several thousand dollars.

They originally told me it could take up to 6 months for them to get the car. We lucked out and it ended up only taking 53 days from order/deposit to delivery so I was happy!

It’s hard enough to pay close to MSRP for a car - I would never pay thousands over!

 

[LarryK]

Had a lady on my mail route who retired from a dealership. She did the books. She said she retierd early as she could no longer stand the salesmen bragging on the money they could get on both new and used cars. She said it was awful that people would fall for their BS and pay exhorbant prices. This particular dealership gave her full pay in retirement and threw in a brand new Buick.

 

[mikephillips]

I'd looked up what the 202 Corolla I bought was MSRP so knew walking in about what to expect. Glad I had decided on buying when I did, about 3 months before the pandemic really starting kicking in. Who knows what I might have been charged otherwise...

 

[pdplot]

When I bought my Corvair Monza coupe back in 1962, the CT dealers all had a 6-month wait. I thought "What's the crappiest town around here" and came up with Portchester, NY, just a few miles away. I walked into the showroom and asked about a Monza and the salesman, Charley Chopski (his wife played the organ at the Playland skating rink), said "What color?". My neighbor across the street went to Pittsburgh to get his. That's how hot they were. You want a hot car? Find a dealer in a depressed area.

 

[JPSmit]

When I bought my Corvair Monza coupe back in 1962, the CT dealers all had a 6-month wait. I thought "What's the crappiest town around here" and came up with Portchester, NY, just a few miles away. I walked into the showroom and asked about a Monza and the salesman, Charley Chopski (his wife played the organ at the Playland skating rink), said "What color?". My neighbor across the street went to Pittsburgh to get his. That's how hot they were. You want a hot car? Find a dealer in a depressed area.

As an aside that has been pretty much our entire Covid shopping strategy - don't want a lineup to get in, find an underperforming store.