Car buyers are currently learning the hard way that finding a decent deal on a vehicle is becoming a major challenge.
According to ABC News, a new vehicle is to be more than the suggested retail price. The media outlet reports that a new Kia Telluride sport utility vehicle will be around $48,509. This is more than $3,700 above the current suggested retail price. Meanwhile, Edmunds stated that luxury SUVs are now selling between $3,000 and $6,000 above suggested retail pricing. This leaves car buyers being able to find a vehicle that won’t break the bank.
“People are accepting these prices without complaining. They’re going with it and making the plunge,” Executive Director of Insights at Edmunds, Jessica Caldwell, shared with ABC News about car buyers. “Dealer markups are happening all over the board. Manufacturers don’t really have control over it.”
Caldwell also told the media outlet that in December 2021, car buyers paid on average $709 more than the suggested transaction price. It was noted that the upward march in prices really took hold in late summer 2021. “We have not seen this happen before on an aggregate level.”
Car Buyers Notice ‘Out of Control’ Markups in Luxury Vehicles
Meanwhile, Caldwell revealed she actually knows one woman who recently paid $50,000 above the manufacturer’s suggested retail price for a Mercedes-Benz G-Class. She also observed that some Mercedes dealerships have been asking $337,000 for a 2021 AMG G 63 G-Class. This is $150,000 above the manufacturer’s suggested retail price.
“This woman thought she got a good deal,” Caldwell stated about the car buyer’s decision to purchase the vehicle. “Consumers feel pressure to buy right now because inventory is so low.”
Speaking about the car buyers’ struggle with the out-of-control markups, Marc Van Hengst, a Brand Ambassador at the Jack Daniels Porsche Dealership in Upper Saddle River, New Jersey, also shared with ABC News that he disapproves of the outrageous prices dealers are currently charging. “I don’t like to do markups. It’s bad for business and will scare people away.”
Van Hengst further explained that he sees prospective car buyers entering his dealership and pleading with the management for a 2022 911 GT3. This is notably the hottest Porsche on the market currently. The car’s starting price tag is $161,000. However, it is being marked up between $307,740 and $349,900. Van Hengst said, “You get a lot of performance I[in the GT3]. Which a lot of people will not use at all. But people want the performance. The internet makes it seem like it’s the most desirable Porsche of all.”
Tyson Jominy, Vice President of Data and Analytics at J.D. Power, went on to add that 87% of car buyers are currently paying above the manufacturer’s retail price. The average new vehicle price is now $45,283. The average was $35,000 in December of 2019. He noted that the global chip shortage and supply issues have a huge impact on the surging new car prices.
