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Nonprofit markups.org is exposing the most egregious new car prices

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Re: Nonprofit markups.org is exposing the most egregious new car prices

#231

Post by O__________O »

bradfa wrote: post #139
O__________O wrote: post #127

Do dealers all pay the same price for a given make/model/year regardless of volume? If not, while I get consumers only care about markup over MSRP, it’s likely dealers are not all paying the same price wholesale. As such, if data like this becomes the norm, likely lead to small dealers who pay more wholesale going out of business — which long-term would likely be worse for consumers; to be clear, not saying that sell…

In theory, yes, all dealerships pay the "invoice" price for a given vehicle. But often there are other financial stipulations for each vehicle, such as "hold back" which is meant to assist the dealership floorplan interest costs (basically the carmaker pays the interest on the dealer's loan to hold the car on their dealership lot for X days, then beyond that the dealership is on their own). I don't think hold back de…

My understanding is invoice price the equivalent of MSRP for dealers — and like MSRP, rarely the average price paid, which varies based on number of factors; which circles back to my prior point, the dealers who are getting the best deals from the manufacturers are going to have the most room to bring down the consumer pricing, which means the smaller dealers will likely get pushed out of the market if the “markup pricing” becomes easy to get, which long term will hurt consumers.

Lastly, I personally would never by a new vehicle unless it was for a highly specific need and impossible to find used, since they’re rarely a deal; average new car drops 20% in value the first year.

_________

Related:

https://cars.usnews.com/cars-trucks/what-is-the-dealer-invoi...

Re: Nonprofit markups.org is exposing the most egregious new car prices

#232

Post by Phlarp »

svnpenn wrote: post #4

$150,000 for an F-150? https://sunrise-ford.com/inventory/new-2022-ford-f-150-light...

Yes, but think of the F150 as an entire vertical-- it accounts for ~40% of Ford's North American sales. To say they have "lots of different trim levels" is a little too basic. There are the standard XL and XLT versions, Lariat, Platinum, Limited, Tremor, Raptor and King Ranch each with their own array of add on packages and upgrades.

F150 owners treat their trucks like gamers treat their RGB desktops. Does the watercooling and lighting package really improve performance? Not really. Do nerds still spend lots of money on them? Absolutely. Putting a lift-kit on the pickup truck that drives exclusively on paved roads is similar.

Re: Nonprofit markups.org is exposing the most egregious new car prices

#233

Post by brightball »

robertlagrant wrote: post #223
mox1 wrote: post #166

Earlier quoted context omitted.

But you still bought the car!!! That's the entire point of these crappy business practices. At the end of the day, you paid. Thus they continue doing the same thing. If you really wanted this to change, don't reward the bad business practices. (Side note: This is a common topic on reddit /askcarsales. Honest dealers are basically forced to do some of these things. The shady dealers advertise lower prices, but lots of…

> That's the entire point of these crappy business practices Exactly. They're trying to find the maximum you'll pay. It's like when you click on "Enterprise" plan on a SAAS company - time for a sales rep to Google your company, see the nice share price and give you a "custom" quote.

For what it's worth, there are more reasons.

Enterprise sales can be a long process because of the procurement process at the company. You can be looking at a 9 month to 3 year sales cycle, where a sales person is going to be involved the entire time answering questions, having security assessments completed, responding to quotes from other companies, etc.

You're going to have more conversations about special implementation requirements, integration with an obscure system, special support, training and compliance needs, etc.

For a long time I've believed that every company really needs 2 "enterprise" plans.

1. Standard Enterprise

- Yes we have SAML

- Yes you can have massive discounts on overages

- Yes you can get a copy of our SOC2 Type II if you sign an NDA.

Price: $X / [month,year]

2. Custom Enterprise

- We'll complete your custom security assessment document

- Discuss special options for training and support

Price: Contact Sales

Re: Nonprofit markups.org is exposing the most egregious new car prices

#234

Post by boomchinolo78 »

UncleMeat wrote: post #207
ReptileMan wrote: post #178

Earlier quoted context omitted.

And then manufacturers will increase supply and prices will go down. I am fairly open to the argument that price gouging for necessities in times of sudden life threatening crunch is not ok, but car market is operating like a normal market.

> And then manufacturers will increase supply and prices will go down. Will they? It seems like scarcity pricing is becoming a more and more common strategy.

It's the only way for businesses to not completely collapse and still meet Agenda 2030 goals of reducing emissions worldwide. I personally think that the supply chain crises will be a boon to energy and emissions reduction worldwide. That not everyone will be able to afford a big car and such, well, they'll have to adapt.

Re: Nonprofit markups.org is exposing the most egregious new car prices

#235

Post by boomchinolo78 »

nikanj wrote: post #76
Panzer04 wrote: post #45

TBH, the only real issue I have with this is dealers capturing all the markup - this is happening because paying those prices gets you a new car now , and not in 12mo when the supply shortage is relieved. I'm not exactly sure how these things work, but if the manufacturer is forbidden from selling direct and dodging the dealer, that's a problem. If the manufacturer could, but is choosing not to, well, that's on them…

I'm not certain the supply shortage will be relieved in 12mo. Or ever. We seem to live in a post-post-scarcity society

I agree and personally it'll be good to see people reducing their consumption. The supply shortage is just a means to get us closer to meeting 2030 goals

Re: Nonprofit markups.org is exposing the most egregious new car prices

#236

Post by csomar »

jeromegv wrote: post #121
atestu wrote: post #96

Based on all other comments I have an unpopular opinion: I think this is fine. If 10 people want to buy 1 car, how do you choose which person gets it? You raise the price until there's only 1 person. How else would you do it?

The concern is not that. Yes increase price if demand is high and supply is low. However, they play those games where they advertise one price but actually have tons of mandated fees when you show up to purchase. So it makes shopping around very hard, you can’t compare between 2 dealerships as even calling them won’t give you that info. It’s predatory and anti consumer.

This is pretty much 98% American and it's everywhere. I took a lyft cab to O'hare this morning. The quoted ride was $28. The final price was $38. The itemized list was too long to read.

Re: Nonprofit markups.org is exposing the most egregious new car prices

#238

Post by csomar »

nikanj wrote: post #76
Panzer04 wrote: post #45

TBH, the only real issue I have with this is dealers capturing all the markup - this is happening because paying those prices gets you a new car now , and not in 12mo when the supply shortage is relieved. I'm not exactly sure how these things work, but if the manufacturer is forbidden from selling direct and dodging the dealer, that's a problem. If the manufacturer could, but is choosing not to, well, that's on them…

I'm not certain the supply shortage will be relieved in 12mo. Or ever. We seem to live in a post-post-scarcity society

It's not a supply-shortage, it's inflation. It's just that some businesses are yet to incorporate the markup into their costs. Once that's done, it'll be distributed everywhere equally.

Re: Nonprofit markups.org is exposing the most egregious new car prices

#239

Post by nomel »

Gigachad wrote: post #28
nomel wrote: post #16

Earlier quoted context omitted.

There's very little difference between a dealership, and a scalper. Both capture all the items in the market, then work together to inflate the value, artificially. The difference is that many places have laws preventing scalpers, and many places have laws requiring that you buy a car through a dealerships.

Dealers and scalpers provide liquidity. Sellers want the item off their hands now, buyers want something without waiting months for a seller. Dealers link these two needs together and take a cut for the service. There is no monopoly or requirement to sell a car through a dealer. It’s just that people find the service worth the cost.

> There is no monopoly or requirement to sell a car through a dealer.

This is incorrect. It's required, by law, in most states:

> In the United States, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers.

1. https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_...

Re: Nonprofit markups.org is exposing the most egregious new car prices

#240

Post by nomel »

Ekaros wrote: post #46
zeroonetwothree wrote: post #32

Earlier quoted context omitted.

Actually dealers have monopoly protected by law in most states.

Monopoly as in there is only one dealer?

> monopoly: the exclusive possession or control of the supply of or trade in a commodity or service.

Dealers have a legislatively enforced [1] monopoly on new car sales.

1. https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_...

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