Sticker price, what’s that?
Last week, Kelley Blue Book reported significantly higher average transaction price over the past year, thanks in large part to the insanely constricted car and truck market. Now, new reports further reinforces that point, noting that dealers are charging well over sticker price — even on models you wouldn’t really expect. Buyers across the country say they’re facing dealers asking thousands more than MSRP for the vehicles they want. Whether it’s high-demand sports cars or even family SUVs, the message is clear: If you want a new car now, prepare to pay through the nose for it.
Take the Kia Telluride for example. Their piece notes the case of a Boca Raton, Florida resident who was “shocked” when he went in to buy a Kia Telluride. The specific model Ken Baird wanted carried a $45,000 price tag, but the dealer wanted $10,000 over sticker. “They said, ‘I’ll get the $55,000 from someone else,” he told the Wall Street Journal. While manufacturers do set “suggested” retail prices, dealers are independent franchisees, and can set their own prices according to what the market will pay.
It’s not just Florida dealers, either
When you see some dealer markups, it may come down to one specific location or one regional chain. Looking a bit deeper though, Mr. Baird’s experience is one you may encounter if you’re shopping for a Telluride anywhere in the U.S. We checked with a dozen dealers throughout the country — from Seattle to Miami — and found much the same story. If dealers had stock at all — a Salt Lake City dealer franchise was completely sold out, for instance — many were asking over sticker price. Some lower-spec models were more reasonable, such as $2,000 over MSRP for a mid-range Telluride S model in Queens, New York.
Others, including Kia dealers in Los Angeles and Kansas City, were indeed asking up to $10,000 more than Kia’s MSRP for its full-size SUV. The highest price I managed to find: over $60,000 for an all-wheel drive Telluride SX Nightfall Edition near Kansas City, Missouri. Even with every conceivable option and accessory, that’s still several thousand over the highest possible suggested price.
So, once again, if at all possible it’s likely a savvy idea to push any new car purchases for at least the next few months — this is just some more evidence for you.
Then there are the usual culprits
Even with mainstream models getting more and more expensive, those examples pale in comparison to popular sports cars like the Corvette. Mind you, some dealers purposely price their cars well over MSRP to avoid selling them — keeping a show piece to get people onto the showroom floor. At least, that seemed to be the case with a Chicago-area dealer asking a cool half-million for a mint 1994 Toyota Supra.
Just in a cursory search — I had to stop before the heartburn-inducing prices caused me serious harm — the 2021 Chevy Corvette Stingray is another one of those cars that you won’t manage to find at MSRP. At least, that’s the case if you’re looking right now. Say you hadn’t ordered a Corvette and just wanted to buy one on a lark — it couldn’t be much worse than $10,000 or so, right? If you live in the Seattle area, that may be the case. A dealer up there is asking $77,480 for a mid-range Stingray 2LT with the Z51 pack. That’s roughly $2,000 more than GM says it’s worth.
Corvette inventory is tight everywhere, so if you’re looking in other cities you’ll pay more. Much more. Dealerships in Los Angeles and San Diego are asking $20,000 to $26,000 over MSRP — blatantly chalking it up to a “market adjustment” (at least they’re being honest about it?). Others, like those in Las Vegas and Salt Lake City, are asking up to $40,000 over MSRP for Corvette Stingrays. One Salt Lake City dealer advertising the low-low price of $133,770 (the car’s MSRP is $93,770) is where you may want to stop looking, unless you’re seriously content with burning $40,000 to have a Corvette right now.
As many experienced analysts point out, this clearly can’t go on forever. Sure, some fringe cases of insane dealer markup will persist as new models come out. It’s worth noting, too, that not all dealers engage in this behavior. The Wall Street Journal cites another Florida dealer on the recent markups, this time a Toyota franchisee: “It’s a short-term benefit for a long-term detriment. You might sell them one car today, but you won’t ever sell them another car.”