The automotive industry has a real problem with excessive dealership markups of new vehicles and that made us wonder, what is the biggest markup you’ve ever paid?
On the back of shortages triggered by the coronavirus pandemic and ongoing issues with semiconductors, as well as many other parts, many dealerships across the U.S. have hit their new vehicles with hefty premiums. The issue has become so prevalent that in January, an estimated 82.2 per cent of consumers paid over MSRP for their new vehicle. That’s a staggering increase from January 2021 when just 2.8 per cent of buyers paid over the sticker price.
Many car manufacturers are upset with their dealers. In early February, Ford chief executive Jim Farley said roughly 10 per cent of its dealer network were known to have been charging over MSRP and would have their future allocations impacted as a result. Similarly, Hyundai and Genesis recently voiced their displeasure at the trend, noting that markups could have a negative “impact on the health” of the brands.
President and chief executive of Subaru of America, Thomas J. Doll has similar concerns, and recently said that the carmaker’s dealers shouldn’t even consider markups.
I’ve never had the opportunity to purchase a new vehicle so dealer markups haven’t impacted me but if I was desperate for a new car, I might be willing to pay up to 5 per cent above the MSRP, at most. With that in mind, what’s the largest markup you’ve paid and if you’ve so for escaped the trend, what would be the largest markup you’d be willing to stomach?