Dealer markups

[ben54]

Is there ever a reason to pay for a dealer markup? I just started car shopping recently and have purchased 2 vehicles. I was surprised to see dealer markups on certain vehicles due to "availability". The Mazda dealer had a 10% markup on their vehicles, Mitsubishi had a 20% markup on the Evo, and Acura had a 25% markup on the TSX. I can`t bring myself to pay for a dealer markup because I consider it gouging. I always feel that I should start negotiating from the MSRP, not down to it. I wasn`t shopping for the Enzo or MacLaran, and these dealerships were extremely slow when I was there. Are these dealer markups the norm? Just more reason to find a good quality used vehicle, and let someone else pay the markup.

[andriver]

Unfortunately it`s called supply and demand. If the car is in great demand, the dealer can charge a premium. Nevertheless, it`s possible to negotiate off the MSRP if it`s a slow day and they want to move the inventory. Good luck.

[denverdetail]

Ben54,
Before I started my detailing business, I was a buyer for a rental car company. I think I bought about 6k-8k cars a year for them. I still do consulting work for a few companies such as Ebay motors, Auto Trader, the Colorado Dealer Board, etc. The work I do focuses on consumer driven prices. What that means is, simply, I research which cars are hot and how their popularity effects their prices. When dealers have a markup, one of two things are happening. Either the car is really in high demand and the demand has effected price or the dealer and or manufacturer is superficially hyping the car. A very common tactic, manufacturers make a new model of car, not knowing what its success will be, they limit production and promote the car like nuts using such techniques like price markups, making the consumer think there is high demand and thus justifing the markup. This technique is used and if the vehicles sales create high consumer demand, the car goes into larger production. The following year, consumers typically see lower prices and higher availability. If this is what is happening to the car you are looking at, wait a year. Also note that every market is different and demand in your area might warrant higher prices. If so, shop around in other markets, you just might find a much better deal. For instance, for some reason, people in Colorado love those friggin` AWD Subarus. My published research in the Denver Post shows people can save an average of $1700 if they buy them elsewhere like Kansas or Nebraska. Also with this in mind, wouldn`t you think that Subaru would send more cars here to satisfy the demand? Of course not, the demand has driven up the values of their cars. Not only as new cars but the values of their used cars are higher too. Another think to think about, if you are from Kansas and have a Subaru, come sell it in Colorado! There is alot to think about when buying a car. Since cars are a loosing proposition any way you think about it, my best advise to anyone is to buy a used car that is not in high demand. That is where the best deals are. Of course, cars that are not in high demand are usually the lack luster boring cars. Its a double edged sword I know, but if you have the knowlege I have you would never buy a new car or a car that everyone is lusting after at the moment. That is of course unless I had so much money that I could use 100 dollar bills to roll blunts and smoke em 4 times a day. If that were the case, I`d buy one of those new Ford GT`s.
www.denverdetail.com

[ben54]

I hear you guys. I guess I`ve been out of the car buying market for a while. My last two cars were 15 and 12 years old. As for the Subarus, they`ve become the next Civics in my town, every racer wants one. If there is another Fast and Furious, the WRXs will probably show up in that. Because of that movie, you can`t find a turbo Supra for cheap.

My preference is to buy used to avoid the markups and a lot of kids seem to buy the high priced cars, then turn them back in after they make several car payments.

[ben54]

Originally posted by denverdetail
Also note that every market is different and demand in your area might warrant higher prices. If so, shop around in other markets, you just might find a much better deal. For instance, for some reason, people in Colorado love those friggin` AWD Subarus. My published research in the Denver Post shows people can save an average of $1700 if they buy them elsewhere like Kansas or Nebraska.

Just looking at the auction sites for cars, and I did note that the same car in a different part of the country is selling for less. But, how do you check the car out if it is being sold in a different part of the country?

[Poorboy]

a dealer called me yesterday and offered me 30% off sticker price for a 03 leftover I had looked at a few months ago....29K now only 19k ...what do you think? :dunno

[Dalton]

Originally posted by Poorboy
a dealer called me yesterday and offered me 30% off sticker price for a 03 leftover I had looked at a few months ago....29K now only 19k ...what do you think? :dunno

Depends on what kind of car. What is it?

[groebuck]

There is zero reason to pay dealer markup right now - with no interest and lagging car sales they can`t afford to be like that (the TSX has a mark up?? when I was getting my new Acura they were pratically beggin me to get the TSX instead of the 03 TL!)...

If you really want a TSX then look at the honda v6 coupe - less money more horsepower and about the same options

[Poorboy]

Dalton it was a Montana minivan ...loaded...

[Dalton]

HMMMM sounds like a good deal to me. Do you need a new van?

If so I would at least check it out.

[elortt]

c`mon groebuck, steve in car :rolling you should know better :lol :rolling

[Poorboy]

hey I have cars , vans, 4x4`s ...and a huge insurance bill:boohoo

[elortt]

hey steve, can you guesstimate how many miles you log on each? I would bet the minivan(s) get quite a work out :lol

[ben54]

$29k for a van, that thing must be loaded. Wonder if the profit margins for manufacturers are high on minivans. Heard that the largest profit margins for manufacturers come from SUV and truck sales.

[groebuck]

Not steve mullet killer - Ben54 the original poste :lol