If you are shopping for a new vehicle, check out this list with the top 10 trucks, SUVs with the highest dealer markup and save a buck, or two or three.
One of the top trending automotive market news items these days has been about dealer markups. This topic elicits a lot of emotion from both consumers and dealers. Right or wrong, it is happening.
The team over at iSeeCars.com analyzed 1.2 million new car listings to see what was really going on with dealer markups. There results were astounding with the average new vehicle priced 9.9 percent above MSRP, the manufacturer’s suggested retail price. Several vehicles were priced well above that average markup as well.
Here is the list of the top 10 trucks, SUVs with the highest dealer markup.
|Rank||Vehicle||% Above MSRP||$ Above MSRP|
|2||Ford Maverick (Hybrid)||25.0%||$5,601|
|4||Jeep Wrangler Unlimited||22.9%||$9,534|
|7||Lexus RX 450h||21.0%||$10,365|
One of the first questions on dealer markups is what are they and won’t don’t companies like Ford or GM stop their dealers from doing them.
First, dealer markups are an additional surcharge for a vehicle above and beyond the MSRP.
For example, the base Jeep Wrangler MSRP starts at $29,995. Let’s say you want to buy it for that price, the dealer might have added $3000 to that price (9.9% average markup). The price you would pay is $32,995 plus whatever other fees and items they push you to buy.
Is that fair? A lot of people feel strongly it is not and manufacturers should crack down on these unscrupulous dealers.
The fact of the matter is manufacturers can try, but dealers are independent businesses and there is nothing illegal about the markups.
Manufacturers have made news about pulling dealer allocations (not shipping them certain vehicles) and our calling them out for unfair adjustments. However, if a big volume dealer tacks on a little bit extra, a manufacturer would have a hard time cutting off that dealer when they move a significant amount of vehicles.
Dealer markups have been around for years and the only thing that has really changed is the internet. Before people had a really hard time spreading awareness of this practice and now social media and news organizations are shining a bright light on it, for better or worse.
Some consumers simply hate the markups and vow to never buy from the dealer again. Other consumers don’t care, they want, what they want. And some dealers are looking at the oncoming concerns about EVs, shrinking profits from new vehicles and really tight inventory to make some additional profit now before things get worse like just a few years ago. It is a complex issue.