Dealership markups

I guess the main point is this: my advice to those looking for cars is to NOT WORRY about what is MSRP and what is dealer markup. Look at the TOTAL price you have to pay. Calculate that and compare for every option you have: Telluride, other new cars, used options (if you want to consider those), and standing pat with what you are currently driving. A dealer markup doesn't necessarily make it a "bad deal" for you if the total price still represents value to you (with your particular situation and preferences). Just like, in year's past, a dealer discount didn't necessarily make it a "good deal". People got burned all the time thinking they were getting a bargain with incentives off MSRP that tempted them to purchase a vehicle that didn't really fit. Don't worry about how good or bad the deal seems, and instead focus on the total cost and how it fits your own needs.

I am fine paying sticker or even a slight bump considering todays economy, but greedy dealers just ain&#;t my thang. I am Moving on from norwood Kia, quirk was about 5% over and willing to negotiate.

I guess it depends on how one defines a "good value." E.g., even if a Kia compares favorably to an Audi in terms of bang for the buck, is a $58k Telluride still a good value if a comparably equipped and mechanically almost identical Palisade could be had for $50k? And I do think the question of where the money ultimately goes is relevant to the value inquiry, because pricing is not nationally or even regionally uniform. I assume that you would object if Kia itself proposed to charge you $58k for the same Telluride that it was willing to sell to your next-door neighbor for $50k. You probably wouldn't say, "Well, the car still seems worth $58k, so I'm willing to shell out $8k more than Bob has to pay." So isn't it also a problem when one dealer says the price is $58k but the next dealer is willing to sell at straight MSRP, or just a little over? For me, value cannot be calculated independently of behavior of the entire larger market.

In general, I think most people don't mind paying a little extra, but they don't want to be cheated out of a little extra. The MSRP is currently the best available guide to "fair" pricing. The more a transaction goes above MSRP, the more likely it is that yes, the customer is being exploited by the seller.

I think we actually agree here. Let's call "value" a measure of what price you have to pay to get a vehicle that you like and that fits your needs. Since needs and likes are personal things, by definition this will vary considerably from person to person. Your Palisade example is a good one. Some people might like the Palisade and Telluride about equally, or might like one just slightly more than the other. For me, Palisade didn't even make my list, so it would have been a poor value - for me - even if it were $20K less money.

And certainly I would be unhappy paying more than my neighbor for the same vehicle. As I said in my first post, I shopped hard to find the lowest price I could for the model I wanted. So I'm definitely not saying people should just accept any price without shopping around. Of course they should look for the lowest price available to them within whatever distance they consider reasonable. But once a person has done that, and added up the total price (MSRP + possible markup + possible dealer adds + possible shipping, etc) ... they may STILL find that the best deal they can get anywhere in their geography includes some dealer markup over MSRP. If that total price pushes them into "bad value" range, then it's perfectly reasonable for them to buy some other vehicle. But for some people, *even with the markup*, the total price will still be a better value than other options available.

Over the past two years, the median household income in the United States has nudged upward from $67,500 to $75,500 as of March . Meanwhile, new cars have risen from an average transaction price of $37,000 in early to $46,000 today, a 24% increase. The cost of transportation in our very car-dependent country has climbed above what&#;s possible for most driver&#;s budgets. Now, more than ever, price matters. These are the most marked up cars in . 

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Consumer Reports recently released eye-opening data on the price disparities between automakers as dealer markups amplify the madness of the auto industry in . Kia is overwhelmingly the winner of the award for most ridiculous new car pricing in . 

Kia Soul

The Kia Soul is a subcompact SUV that car buyers are eager to get their hands on. In fact, demand is so high that Kia dealers keep pushing the limits of Kia Soul pricing ever higher. In , Consumer Reports finds that the average price for a Kia Soul in the US is 21% over MSRP. 

When we take a look at CarEdge Car Search, we see that there are just over 1,000 new Kia Souls for sale in America right now. The Soul is in short supply. Shockingly, some go for nearly $40,000! Sure enough, CarEdge Car Dealer Reviews shows that buyers are having a hard time finding a good deal on the Soul in . 

Kia Sorento

Kia&#;s hot-selling mid-size SUV is also listed for 21% over MSRP on average. Kia has been able to keep a higher supply of Sorentos on dealer lots, with nearly 3,000 available nationwide. I just about dropped my coffee when I saw that Kia Sorento plug-in hybrids (PHEVs) are listed for over $60,000 in some parts of the country. See the Sorento listings near you here. 

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Kia Forte

The third Kia model with a 21% average markup in is the Forte budget sedan. The consensus among reviewers of the Forte is that it&#;s simply an &#;okay&#; car. Is it worth $34,000? Some dealers seem to think so. 

Kia Sportage

With a 19% average markup, this typically affordable compact SUV is no longer cheap. The Sportage has a starting MSRP of $24,090, but it&#;s very hard to find one under $35,000, and some approach $50,000. Would you pay that much for a Kia compact SUV?

Kia Niro

The Niro is popular, having sold well over 20,000 units annually in the U.S. before the chip shortage slashed production. Does its popularity justify the 19% average markup on the Niro? The electric version of the Niro has seen the most ludicrous price increases. Although the MSRP for a Niro EV EX Premium is $44,650, dealer prices reach up to $52,000 before taxes and fees.

CarEdge&#;s Take

It&#;s not just new car prices that are out of control. At CarEdge, we&#;ve been tracking used car price trends, and it&#;s hardly any better at the auction house. Seasonal price trends have gone out the window, and supply chain disruptions continue to put a damper on any semblance of normalcy. We&#;ve seen new car inventory plummet and struggle to climb back at all.

What will it take for the car price bubble to burst? Supply will have to catch up to demand. Until that happens, dealers (and automakers) have the upperhand when it comes to pricing. Be sure to join the CarEdge Community to stay up to date with the very latest car price and inventory news. 

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