After all, corporate greed wasn’t invented in the pandemic. Other economists have dismissed this, saying it’s a flimsy excuse, and that other factors, among them supply chain problems, increased demand, and commodity prices, have much more of an impact. Some Democrats and economists argue that corporate greed is playing a role, basically saying that companies are taking advantage of the moment to boost their profits even when it’s not necessary, and contributing to higher inflation overall. “It comes down to if someone’s willing to pay it, and they can sell it and keep selling it, I think they’re going to ride that train as long as they can,” Iglar said.Īmid the current inflationary environment, there’s a broader debate going on about what’s causing prices to rise.
How much are dealer markups contributing to this average price increase? The answer is certainly not all of it, or maybe even most of it. ( Used car prices are up a ton, too, but for this story, we’re focusing on new ones.) Going by the Consumer Price Index, which measures what consumers pay for goods and services, new vehicle prices are up 12.4 percent over the past year. “If there are five people raising their hand to buy the exact same product, you just go with whoever is bidding the highest.”Īccording to Kelley Blue Book, the average new car price in the United States was $46,085 in February, $5,000 more than it was a year ago. “At the end of the day, it’s saying, ‘Look, if you don’t buy this, the guy right behind you or the gal three people behind you is going to, and they’re going to pay me $1,000, $2,000 more than you’re willing to, so I have to go with them.’ It’s one of the first times in history where the dealer has so much demand that they can actually do that,” said Ivan Drury, senior manager of insights at Edmunds, a consumer research company. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. New car dealers have the upper hand at the moment, and some of them are willing to use it.īy submitting your email, you agree to our Terms and Privacy Notice. Tens of thousands of dollars over the sticker is something of an outlier, but across the country, people on the hunt for a new vehicle are being met with significant dealer markups, thanks to supply shortages and high consumer demand.
“I can’t justify spending that much over sticker.” Iglar emailed another dealer trying to get a sense of what their markups were, and a week later they responded they were adding on $15,000. “We were both shocked and politely declined, saying while we would like to have the car, we can’t justify over-spending for it,” he said. The dealership wanted to charge them $20,000 over the manufacturer’s suggested retail price (or MSRP). The salesman was “super nice” throughout most of the process, Iglar explained … until it came to the price. In the fall, he and his wife were in the market for an SUV and made an appointment at a Mercedes dealer in New Jersey. Wild in a less good way if you’re a consumer looking to buy, which is the spot Richie Iglar recently found himself in. Wild in a good way if you’re a car dealer trying to sell a car. Compare more than fifty easy-to-read data points, and find out what our editors and users think of each vehicle on your list.It’s a wild time out there in the car market. Our comparator isn't just about figuring out which car is better, it's about figuring out which car is best for you. You can compare competitive vehicles, or compare different trim levels or model years of the same car.
See ratings and pros and cons for each vehicle, and compare not just MSRP but what people are actually paying and dealer invoice prices. Compare features, warranties, engines, fuel economy, passenger room and trunk space, and even ownership costs. Our powerful car comparison tool lets you compare multiple vehicles, so you can see how they stack up at a glance.
Just select the cars you're interested in from our comprehensive list, and we'll take care of the rest. Trying to figure out which car, truck, or SUV you should buy? Deciding between multiple vehicles can be a chore if you don't have the right tools, so let the experts at Edmunds do the heavy lifting.
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