“We are inundated with orders we can’t fill,” said the sales manager of a New Jersey Toyota and Volkswagen dealership that prices vehicles no higher than their sticker price. But it is no longer a buyer’s market dealers now have the upper hand, and those willing to sell popular models, particularly hybrids and electric vehicles, at sticker price are the rare exception. “The fact that people are taking pride in saying, ‘I paid MSRP’ is completely different from any point in history.”īefore the pandemic, dealers competed on how far below the sticker price they would sell a car, light truck, or SUV. “These are extreme measures people are taking because they’re frazzled by what’s happening in the industry,” he said. “The feeling I had when I got that deposit down – I couldn’t believe it had just happened.”įlying to reasonably priced dealerships makes sense for vehicles in high demand, argued Ian Drury, senior manager of insights for Edmunds. “It became a challenge to find the car where I wasn’t going to pay a single dollar over the window sticker,” said Ratz, a commercial airline pilot. Ratz’s quest involved contacting more than 60 dealerships, several that marked up the price by $10,000, before he finally found his prize 900 miles from home. That triggered him to begin hunting for the hybrid SUV, selling at sticker price. Kevin Ratz of Chicago was stunned when his local Toyota dealer asked for a $21,000 markup on the only RAV4 Prime in stock. The auto market research firm says vehicles that now routinely sell for more than $3,000 above MSRP include the Kia Telluride SUV, the Lexus NX450H hybrid and the GMC Hummer electric vehicle. “Automakers are selling their top-of-the-line models,” she said.īuyers have been paying above sticker price since last August, as average transaction prices for new vehicles have steadily climbed, according to Edmunds. Both are trending up, with used car costs increasing more.Ĭontributing to the increase in prices is the fact that manufacturers are allocating their precious semiconductor supplies towards their higher profit vehicles, said Michelle Krebs, executive analyst with Kelley Blue Book parent company Cox Automotive. Labor shortages at factories and ports in the United States have added to the auto industry’s troubles.Ĭhart with two lines representing the change in car prices, used and new. The nation under siege is a large supplier of neon gas required for lasers that carve tiny pieces of silicon to create semiconductor chips, and is also a leading maker of wire harnesses necessary for bundling cables throughout vehicles. Demand for semiconductor chips for today’s highly digitized vehicles continues to far outweigh supply, a situation exacerbated by Russia’s invasion of Ukraine. It is a landscape battered by a perfect storm that is squeezing supply at a time of strong demand.Ĭovid-19 shutdowns two years ago put the brakes on the auto supply chain, a slowdown from which the industry has been unable to recover. “This is a landscape like I’ve never seen before.” “I’ve been doing this since the late 90s,” said Denecker. Today, the lots are nearly empty, and buyers must put a deposit down and wait two to 12 months for their vehicle to arrive. Heritage Automotive normally has 500 to 700 vehicles available for sale, with its lots full of cars, SUVs and light trucks, according to Denecker. His dealership has sold to buyers from around the nation. “Right now, if it’s the right vehicle there’s no limit in how far people will go,” said Ryan Denecker, sales director at Heritage Automotive Group, which operates Toyota and Ford dealerships in Burlington and is holding to its policy of selling vehicles at or below sticker price.
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