re: With Car Dealerships exploiting consumers by selling well over MSRP

It's a model that made sense 50 years ago. The manufacturers didn't have to deal with running tons of sale location in every small dick town in America. They could sell to one dealer and let the dealer handle all the end-user sales.

If Ford ran their own sales, you'd have 50-60 Ford "sales showrooms" in the country.

Now, it's different. With online shopping, distance isn't as important. But there's a lot of people making money in the current model that would stand to lose out if the model changed.

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I understand how sales work. People are paying these prices, which in itself another issue. But marking up a vehicle 20%, from the manufacturer's recommended dealer price, higher than its ever been marked up in the history of selling cars is exploiting consumers. Just my opinion.

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A car is worth what someone will pay for it.

So let me see if I follow the OP’s logic, it’s ok to charge over asking for a house but not a car?

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People with the money say frick it, I’m not waiting any longer and buy it.

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As long as that is the case, the price demand curve will stay right where it is.

People with less means will need to adjust their lifestyles: keep your old car in shape, ride bikes, walk, order online products, etc. Cars weren't always a necessity and they will not always be either.

The Tesla model sounds great now but once the chip shortage gets under control selling at MSRP will be a rip-off. Things will eventually get back to a place where we an reasonably expect 10+ percent off of sticker after rebates and dealer discounts. A set selling price model would be worse for the consumer long term as it would not allow dealers to compete with one another

Source: I'm a sales rep for Caterpillar and have had this discussion internally multiple times

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Anything over MSRP has to be paid in cash. If you’re poor, you lease.

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LOL No, many banks will loan up to 130% of MSRP. Before covid people were using this to roll in negative trade equity, now they are just rolling in additional dealer markup because they are not as upside down on their trade.

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Outdated business model.

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Now this I agree with.

We are basically being forced to buy cars the same way they did in the 1950’s.

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Selling twice as many cars is not incentive?

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How are they going to sell twice as many cars? The prices are out of control because of the supply chain issues that are reducing the amount of cars being produced.

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Cox Automotive estimates quarterly sales will decline more than 16% from Q1 2021 when 3.9 million units were sold; Q1 2022 is forecast to end with 3.3 million sales and mark the second-worst quarter for new-vehicle sales in a decade, behind only Q2 2020, the height of the global COVID-19 pandemic.

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LINK /

This isn't exploitation, this is simple supply and demand. The supply is less than the demand meaning you have to ask yourself how much you really want a new car. It might be time to find a reliable older used car to drive for a few years until the supply chain issues get ironed out.

The banks will likely put a stop to it to a great extent, because of all the idiots financing 90% of a Tahoe for 10 years and cutting out of it upside down after 2. That $800/month payment will kill most buyers quickly. No financing and 95% of these sales aren't happening. I'll just hang out and watch the used market get bloated from all the repos.

I saw something where it said Mavericks are being sold on average 37% over msrp