Now, The Wall Street Journal reports, even the sticker prices — the manufacturer’s suggested retail prices (MSRP) on new cars — are getting ignored.
With inventory tight, auto dealers are often charging more than the MSRP and even hitting customers up to pay for add-ons that boost the price. Add-ons can include protective coatings and various extras and frills.
Some buyers told the WSJ that they’ve run into dealerships asking for thousands of dollars above MSRP. Both analysts and dealers say these price-boosting practices are spreading — taking in not-just luxury models but more mainstream cars that typically wouldn’t be hit with such price increases.
“I was shocked,” said Ken Baird, a 61-year-old Boca Raton, Fla., resident. He wanted a Kia Telluride. Out shopping, he offered $3,000 over the $45,000 sticker price on a vehicle. But the dealership wanted $10,000 over the sticker price.
“They said, ‘I’ll get the $55,000 from someone else,’ ” Baird told the news outlet. Instead, Baird wound up simply paying the original sticker price for a Toyota Highlander from another dealership.
A Kia spokesman told the WSJ that the company’s dealers are independent franchise owners and respond to market demand.
The upshot of all this is that it’s become a seller’s market for cars in the U.S. The situation has auto makers cutting down on discounts, and customers paying record prices for both new and used cars.
J.D. Power said that, in mid-June, about three-quarters of all vehicles sold in the U.S. went for the sticker price or above. That is way up from the average of around 36 percent before the pandemic, the research firm reported.
In fact, sales of used cars are so strong across the U.S. and Europe that vehicles are holding their value instead of losing it.
Before this year, Cap Hpi said, the biggest monthly increase in average prices was 1 percent, in 2018. Then, this May, they rose by 6.7 percent.
In turn, these rising costs have fueled overall concern about inflation.
