A new report by iseecars.com alleges widespread overcharging by car dealerships across the United States, with popular SUVs and luxury cars being the most affected. The data, compiled in February 2024, highlights a significant gap between the Manufacturer’s Suggested Retail Price (MSRP) and the average price paid by consumers.
The investigation points out a concerning trend in the auto industry, where dealerships are marking up prices considerably, especially for vehicles in high demand. This practice disadvantages consumers who are forced to pay well above the recommended price, particularly for those who lack the negotiating power or knowledge to challenge dealership markups.
The report sheds light on the top 20 vehicles most impacted by this practice. Here are some of the key takeaways:
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Luxury SUVs Dominate the List: Leading the pack are the Porsche Macan (21.3% markup), Porsche Cayenne (21.9% markup), and Mercedes-Benz GLE (18.6% markup). These popular luxury SUVs seem to be particularly susceptible to dealership markups, potentially due to their high demand and limited availability.
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Electric Vehicles Not Immune: The Porsche Taycan (both sedan and wagon variants) also feature prominently on the list, with markups exceeding 20%. This suggests that even the growing electric vehicle segment is not safe from dealership markups, potentially due to the novelty and limited production numbers of these cars.
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Surprising Entries: The report includes some unexpected entries, such as the Toyota Corolla Cross Hybrid (19.4% markup) and the Ford Maverick (18.2% markup). This indicates that dealerships are willing to inflate prices on even non-luxury, fuel-efficient vehicles that are currently popular choices for consumers.
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Minis a Double Whammy: The iconic Mini makes a dubious double appearance on the list, with both the base model Hardtop (25.5% markup) and the Countryman (18.7% markup) featuring significant dealer markups. This is particularly concerning considering past reports of reliability issues with Minis.
Addressing Unfair Dealership Markups: Empowering Consumers in a Challenging Market
The iseecars.com report raises concerns about the fairness of dealership pricing practices. With consumers already facing rising car prices due to inflation and supply chain issues, dealership markups add an unnecessary burden.
The high markups on popular and in-demand vehicles suggest that dealerships are exploiting consumer desire to maximize profits. This practice can have a negative impact on the car buying experience, turning it into a stressful and potentially unfair negotiation.
While the legalities of dealership markups are complex and vary by location, the report empowers consumers with valuable information. By being aware of the MSRP and researching average selling prices, car buyers can be better equipped to negotiate a fair price and avoid excessive markups.
The report also highlights the need for potential solutions. Increased transparency from dealerships regarding pricing and fees would be a welcome step. Additionally, exploring alternative car buying options, such as online platforms or factory-direct sales, could provide consumers with more control over the final purchase price.
