It’s no secret that buying a car is a real hassle right now. New vehicles were already more expensive than ever, and ongoing supply chain headaches have made it even harder to find a new car at a reasonable price. Dealers have played a pivotal role in the headache many are experiencing now, especially when it comes to playing games with pricing. Auto industry analysts at iSeeCars studied 1.9 million new car listings and found that the average new car is listed at 10 percent above MSRP.
The iSeeCars analysis ranked 15 cars with the greatest markup. Five stuck out above the rest:
- Jeep Wrangler: 24.4%
- Porsche Macan: 23.1%
- Genesis GV70: 22.4%
- Lexus RX 450h: 21.9%
- Ford Bronco: 21.6%
Markup amounts varied from model to model, but those with higher MSRPs saw larger upcharges at the bottom line. The Porsche Macan, for example, starts at around $55,000 but can easily reach more than $80,000 after options. Porsche dealers charged an average of $14,221 above sticker for the hot-selling SUV.
We can complain about markups here until we’re blue in the face, but the reality is that people are paying them, so there’s no real incentive for dealers to stop charging them. And while it seems that dealers are just out to gouge buyers, the markups do help them cover lost revenues from lower sales volumes overall.
iSeeCars’ executive analyst Karl Brauer says buyers accept markups because they don’t expect inventory levels and pricing to normalize before 2023 at the earliest. Even so, it’s best to avoid paying more if you can help it. “Consumers looking to purchase a new car should do their research and compare prices between multiple dealers,” Brauer said.
He also noted that buyers could sometimes avoid markups by ordering direct from the manufacturer. Many automakers offer online reservations and the ability to order without visiting a dealer, but many end up finalizing the sale at a dealership anyway. Regardless of how you decide to buy, do your homework and shop around to give yourself the best chance of avoiding markups.