With vehicles in short supply, prices are skyrocketing. Last month, 82% of new-car buyers paid more than sticker price.
Pandemic-related supply chain problems are stretching the new-vehicle shortage into a second year, with near-empty dealer lots, sky-high prices and months long waits for new wheels. The prolonged disruption is now exposing fault lines in the car business’s century-old retailing model and prompting a broader rethinking of the entrenched way Americans buy cars.
Consumers are revolting. Many are expanding their searches outside their hometowns and even across state lines. Some are banding together online to call out dealers charging the biggest markups. Others have taken their concerns directly to automotive CEOs via personal letters.
Car companies say they don’t want dealers charging above sticker and in some cases are pushing back, but dealerships are independent businesses that control the final transaction.
Many dealers say they must make do with their scant vehicle supplies and be realistic about what the market will bear, especially for high-demand models. In extreme cases, dealerships are charging $35,000 to $40,000 above the manufacturer’s suggested retail price, or MSRP, on luxury cars that normally sell for $80,000 or more.
Before the pandemic, practically nobody paid above the sticker price for a new car. In January, an unprecedented 82% of buyers did, according to consumer research site Edmunds.com.
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Whining for delayed delivery & price hike upon delivery has become quiet common, everywhere.
