By on April 23, 2017

2018 Dodge Challenger SRT Demon - Image: FCA

When we announced that the Dodge Demon would have a MSRP below six-figures, the comments section was immediately populated with discussions on how that might not be the case once the strip-focused Challenger arrives in showrooms. The limited supply of early Hellcats came at a significant premium and, for a time, even gently used models were going for the manufacturer’s suggested retail price of a new one.

Gouging on the Demon seems even more assured since FCA has stated that it will be limited production to a mere 3,300 units in North America. Obviously, there is no way in hell to avoid dealer markup on a vehicle like this one but Dodge seems to think it has found a way to attenuate the matter.

According to Motor Authority, FCA passenger vehicle head Tim Kuniskis says the brand doesn’t want anyone taken advantage of and is very aware of the exploitative pricing that occurred with the Hellcat. Kuniskis says that, since each Demon will have an individually numbered plaque on the dash with the owner’s name, dealers will be forced to order every car for a predetermined buyer. The same goes for the optional customized “Demon Crate” toolbox Dodge is offering.

If you’re wondering what’s stopping dealers from just buying models in advance and ordering those plaques from the manufacturer, Dodge is.

Kuniskis explained that the automaker will only add the plaque on the original vehicle at the factory. Dealers cannot change the plaque after they’ve ordered the car and, while they can order it blank and change it themselves, Dodge won’t associate the name with each car’s serialized number. It won’t be “official” and might look a little off — making the car far less desirable.

When asked if the subsequent owners of a Demon could contact FCA and order a new plaque with their name on it Kuniskis said, “Tough shit.”

Although, how big a difference this will make is debatable. While it does force dealers to play ball with the manufacturer and keeps them from hoarding Demons, there is nothing stopping them all from coming together and deciding to tack on a massive fee just for ordering the limited production vehicle. The plaque preorders will likely help but there’s nothing to indicate they’ll magically nullify the powers of greedy salesmen.

 

[Image: Fiat Chrysler Automobiles]

Get the latest TTAC e-Newsletter!

Recommended

77 Comments on “Dodge’s Plan to Stop Dealerships From Gouging Potential Demon Buyers...”


  • avatar
    turbo_awd

    THAT’s supposed to stop them? They’ll slap on an additional $5k “original factory registration fee”…

    • 0 avatar
      brn

      Then the scalper, um buyer, will turn around and sell it with a $60K markup.

      • 0 avatar
        Ryoku75

        Then some impulsive dummy will pay that mark-up.

        • 0 avatar
          dirtyblueshirt

          “Then 3,300 impulsive dummies will pay that mark-up.”

          FTFY.

        • 0 avatar

          Indeed. It’s Dodges fault for not selling them at market prices. I am a salesman (not for Chrysler anymore though), and most of our new inventory we give away at darn close to our cost. The manufacturers under-price a model and it’s “greedy saleman” who want to make a buck (or thousands) off a very willing buyer? But when the manufacturers load up the lot with regular junk no one calls the buying public greedy or selfish for scoffing at the notion of paying MSRP. Indeed, you must let the market determine the value, and if you can find 3000 people who will pay $100000k or more, well then again, that’s Chryslers missed opportunity, or they should have made more cars.Why should the dealerships be forced to only make so much profit when the owner can flip it for whatever they want as a used car?

          • 0 avatar
            DenverMike

            Dealers should feel betrayed by the manufacturer, selling directly to the public. Where’s Ruggles anyway?

            It should be “bonus time” for dealers, when highly desired “limited editions” come out. It’s what they live for, and (partly) makes up for all the stripper subcompacts they’re forced to sell.

  • avatar
    raph

    I don’t see this working very well. The number of well-heeled dodge nutswingers will certainly exceed supply.

    Really the only way to combat this would be to sell these cars factory direct.

    • 0 avatar
      Maymar

      I was wondering if there was any way to make factory direct sales to the public work with state dealer protection laws. Part of my job involves fleet purchasing, and our normal setup is negotiating a national purchase with the manufacturer, and then paying local dealers some sort of delivery fee. In theory that could work for Demon buyers as well (probably not that different from how the Ford GT is being sold), but it wouldn’t give dealers enough leverage to get their pound of flesh.

      • 0 avatar
        dukeisduke

        It probably couldn’t happen in Michigan and Texas, or some other states, either. I’m sure there was a good reason for strong automotive franchise laws back in the day, but we’re not back in the day anymore, especially with large stock corporations owning chains of dealerships.

  • avatar

    the market will determine the price.

    • 0 avatar
      highdesertcat

      Exactly.

      • 0 avatar
        CaddyDaddy

        This brings up as I distinctly remember the logic behind Milton Friedman’s argument in favor of price gouging. Let the market determine the price.

        The higher the price, this will encourage competition and other manufactures to see the profit in making a like product. Better for all! …..and likewise as more players enter the market the price will come down and the quality will improve.

    • 0 avatar
      IHateCars

      I agree….low volume/supply + high demand = dealer mark up….and people will pay it. It just sucks that a potential buyer can’t wait until the following model year to pick one up at a reasonable price after the feeding frenzy has died down.

      But, free market and all that….

    • 0 avatar
      la834

      Exactly. All this speculation and we don’t even know if buyers will want to buy a Demon at its list price. If selling thousands of street legal but track ready near-$100,000 cars were that easy, everyone else would be doing it too.

      Special editions of this sort aren’t surefire hits. Consider that, while it’s a hugely valuable rare muscle car today, dealers could barely give away a Plymouth Superbird the one year they were built. Many went unsold over a year later. Supposedly some dealers even replaced the distinctive wind-cheating nose with a standard Plymouth front clip and bumper to help move them off the lot.

      • 0 avatar
        highdesertcat

        “Special editions of this sort aren’t surefire hits.”

        True, but it still a good way to tie up money to pass down to one’s heirs, like guns, art, real estate, etc.

        Jamie Colby’s “Strange Inheritance” documentaries are an excellent example of such a philosophy.

      • 0 avatar
        SCE to AUX

        @la834:

        Quite true. Gouging will occur if 10,000 people line up for this vehicle, but not if only 2000 show up.

        If I had the money and the interest, I’d still be wary because of this car’s close proximity to the Hellcat. How do we know something better isn’t coming in 2 years which will nullify this car’s supposed value?

      • 0 avatar
        bunkie

        There are a number of stories from back in 1970-71 of Dodge/Plymouth dealers with a number of un-sold Superbirds and Daytona Chargers.

        Frankly, I don’t really see the point. Buy a regular Challenger and send it to one of any one of a number of speed shops and end up with similar (or even better) performance for a lot less money. You’ll even get cash on the hood for the initial purchase. Better yet, stealth the damned thing and have fun playing Q-ship.

        • 0 avatar
          slance66

          Why bother with a modern Challenger even. Buy a 72 Dart or something. You sure as hell don’t need $100k to create a vehicle like this.

          • 0 avatar
            AJ

            Agree! I was at the Hot Rod Power Tour recently, and I have to say, there were a lot of classic Mopars along with a few fancy Challengers. Have to say… the classics were well let’s say, classic! Like there was a restored ’70 440 Superbee that was simply fabulous.

        • 0 avatar
          raph

          ” Frankly, I don’t really see the point. Buy a regular Challenger and send it to one of any one of a number of speed shops and end up with similar (or even better)”

          The days of a tuner shop outdoing a factory SE are pretty much over when it comes to the refinement you get when the factory decides to do a Demon or a Shelby or a ZL1 1LE and so on, especially at a price that would make it a deal over the demon.

          Used to be a tuner could take a car and add a sundry list of parts and get an appreciable difference in performance but with the various systems on the vehicle being so tightly integrated Tuners just don’t have the breadth of knowledge it takes to equal that factory refinement.

          The Shelby Super Snake is a prime example where they add another 320 or so horsepower and strap on better brakes, different suspension and supporting mods to keep everything from grenading. They rely on a canned tune from the blower manufacturer to keep the engine happy but it doesn’t address the traction control or stability control and so on. The ABS system doesn’t cope well with the bigger more aggressive brakes and so on.

          You’ve got a few players out there that can pull off a fairly decent build but they don’t come cheap and when its all said and done chances are it will end up costing you more for that expertise in the long run.

      • 0 avatar
        dukeisduke

        True, the Superbirds and Daytonas were slow movers, with dealers removing the front ends and the rear spoilers, in an effort to unload them. A friend’s dad bought a still-new Daytona in 1972.

        • 0 avatar
          rudiger

          Dodge being able to unload their 500 or so Daytonas played a big part in getting the Superbird green-lit. Unfortunately, they had to build a lot more of them, and everyone who wanted one had already gotten a Daytona. So, Superbirds languished on dealers lots for, in some cases, years.

          As to the dealers swapping Superbird front ends with stock Road Runners to try and unload them, there are a couple caveats. The first is that Maryland Plymouth dealers had no choice because the state didn’t recognize the Superbird’s nose as a real bumper (which it wasn’t).

          Then, it was no easy task to do, either. The Superbird used ’70 Coronet front fenders and modified hood which, obviously, wouldn’t work with a Road Runner grille and bumper. The entire doghouse had to be swapped out.

          So, while it might have happened, I’m sure it was a very limited number of converted Superbirds.

    • 0 avatar
      05lgt

      Shouldn’t FCA be the one charging more than? Friedman’s ideas are supposed to apply to business writ large, not exclusively middle men. If FCA charged dealerships free market auction style prices for the Demons would your feelings as a dealer / ex dealer be any different? The idea that auto dealerships should recieve the cars at a set price that isn’t driven by supply and demand but then charge “what the market will bear” as retailers isn’t simply self serving, it’s offensive.

      • 0 avatar
        George B

        05lgt, I agree. If FCA charged market prices for the Demons, that extra profit might get reinvested back into product development. The price signal would definitely say design and build more cars like this. Extra dealer markup does nothing to help pay for engineering for the next generation of V8 RWD cars from FCA.

    • 0 avatar
      racer-esq.

      Exactly, LOL at all the dumb idiots being screwed daily by the non-competitive, non-transparent healthcare, education, insurance and financial services industries, not to mention the taxes they pay for lazy public sector union workers like cops to sleep in their cars.

      But god forbid some schmuck chooses to pay a dealer markup on a product in the most competitive, transparent industry in the country. How dare a private business in a competitive industry price a product to the market.

  • avatar
    OldManPants

    Why would this even be an issue to a red-blooded, market-oriented collection of Heroes like the TTAC commentariat?

    Dealers are permitted to take it in the shorts without public outcry; why oppose their rare opportunities to make a decent profit from people who can easily afford the inflated price?

    • 0 avatar
      28-Cars-Later

      When do dealers take it in the pants?

      Last time I can think of is when Chrysler and GM shut a bunch of them down, I do recall media and some of the public siding with the dealers at the time (not that it did any good).

      • 0 avatar
        OldManPants

        When they have lots of unsaleable sedans?

        • 0 avatar
          28-Cars-Later

          Nothing is unsalable at the right price.

          • 0 avatar
            OldManPants

            And that right price can be found somewhere in the dealer’s shorts.

          • 0 avatar
            28-Cars-Later

            You make money on those undesirable new cars in trade. You mark everything down to 500-1000 + pack over holdback, Then you see what you can take in trade. If all you get is shit, then its $500 take it or leave it sir, and you make that $500 selling the trade while also unloading that floorplan + pack. However chances are you will get some good trade which you can then make decent profit on either on the block or via your retail channel at 16%-25% interest to the subprime crowd. New car operations make most of their profit in used cars and service.

          • 0 avatar
            Lou_BC

            “And that right price can be found somewhere in the dealer’s shorts.”

            or the buyer’s anus.

  • avatar
    bikegoesbaa

    As far as I’m concerned dealers are welcome to charge any market adjustment they want in the absence of collusion or other anti-competitive practices.

    If nobody is willing to pay the market adjustment then the dealer will have to bring it down. If somebody is willing to pay it, then that guy obviously thought it was an OK deal.

    This is especially true for something that is a gloriously ridiculous rich-guy toy like the Demon is. It’s not “gouging” to charge a millionaire extra to be the first one in his gated community with a hot new car.

    If a $20k ADM makes the Demon unaffordable for you, then you should not be buying a Demon.

    Can’t pay the ADM or don’t want to? In the words of FCA “Tough Shitte”. They’ll probably be able to find somebody who is.

  • avatar
    Bill Wade

    I went to the local Ford store yesterday to look at an F250. Sitting on the showroom floor was a new Raptor. Sticker was $70k. Beside the Monroney was the “Market Adjustment” sticker of $20k.

    Somehow paying $20k over sticker for a truck seems rather unreasonable.

    • 0 avatar
      Lou_BC

      @Bill Wade – most dealers screw clients on used vehicles. There isn’t the same opportunity on new stuff since MSRP is easy to check and inventories are easy to search.

    • 0 avatar
      IHateCars

      Agreed, but wait until next year and you’ll be able to pick up a 2018 Raptor at a reasonable price because the “gotta have it first” crowd is on to something else. Not gonna happen with only 3000-ish Demons.

  • avatar
    gasser

    If Dodge doesn’t want a big dealer mark up, make more Demons.
    Or just like concert artists charging more for seats, rather than let the scalpers make a fortune,raise the MSRP to market and let the factory slurp the gravy.
    No one seems to care when a dealer loses money. There seem to be new 2016s and even new 2015s on dealer lots, but when the dealer charges over MSRP people go nuts.

    • 0 avatar
      Garrett

      When do dealers lose money? Even when you get a great deal, they will still make money.

      • 0 avatar
        highdesertcat

        Garrett, that’s also true!

        Dealers never sell at a loss because they would go out of business.

        There’s always a price for every customer.

        For the customer, it is crucial is to be able to walk away if the deal isn’t to your liking.

        THAT really bugs dealers, to spend a lot of time on you and then lose the sale, especially if it is to another dealer somewhere else.

  • avatar
    V-Strom rider

    Millions of buyers pay well below MSRP and no-one thinks that’s a problem. 3,300 buyers will pay above MSRP, so why is that a problem? As stated above, the market (in economic terms, the intersection of the supply curve and the demand curve) will set the price. That’s how a free market is supposed to work.

    • 0 avatar
      Garrett

      No.

      In a free market, Dodge would charge more money for them, and keep the extra revenue. They would bypass having dealers.

      Dealers only exist due to regulations that stifle competition.

    • 0 avatar
      Drzhivago138

      It’s not a problem, because MSRP is almost always bunk. So if you price it crazy high, buyers believe they’re getting a good deal at $10K off MSRP.

  • avatar
    jammyjo

    What kind of markup is OK? What prevents money being creatively exchanged under the table? On the other hand, why would you want to be a Dodge dealer if not to make a nice profit once in awhile on a desirable car? I think any markup is OK as long as it’s straightforward without lying or deception.

  • avatar
    cgjeep

    Make every buyer purchase a Dart or 200 when placing the order and out the outrageous markup on that.

  • avatar
    V-Strom rider

    This is exactly the same as “scalping” (don’t know if that’s what it’s called in the US, but unathorised reselling at above face value) of hard-to-get tickets for popular concerts and sporting events. If the original ticket provider (or vehicle manufacturer) sets the initial price too low then at some point willing sellers will meet willing buyers at a higher price. No harm done, so why do people get all steamed up about it?

  • avatar
    Rday

    LOL. a fool and his money will soon be parted. FCA needs money badly and there are many fools out there that will oblige. Each party deserves the other one. Just the fact that someone buys and FCA product alone is proof that they have serious ‘problems’. Nuff said.

  • avatar
    LS1Fan

    So,instead of openly advertised markups, FCA dealers will instead hold silent auctions -and the winner pays Dodge sticker and the dealer “auction fees” for the privlidge.

  • avatar
    CaddyDaddy

    At the end of MY 96′, Impala SS’s were being offered for sale for about 10% above MSRP. I opted for the alternative and purchased an all options box checked Caprice. My Caprice’s MSRP was higher than the MSRP’s for the SS’s that were available in stock on the Front Range. That is how the market works, and I’m glad we have that system as opposed to Venezuela or Soviet Russia.

    In the end I was happy to get the trailer towing package goodies and got a superior car sans the rear disk brakes.

  • avatar
    SCE to AUX

    This is why I don’t care about sports figures’ salaries. They provide a high-demand service to buyers willing to spend thousands per season, or even per game. Don’t like it? – Then, don’t go.

    Same thing with the Demon. As buickman said above, the market will determine the price.

  • avatar
    DenverMike

    Totally irrelevant what they sell for. Most are going straight to Dubai, Saudi Arabia, United Arab Emirates and others, selling for some $250K+

  • avatar
    Lou_BC

    I doubt most Demon buyers are concerned about the price.

    Most will end up in some climate controlled garage with the ambiance of a mausoleum. That is sad.

  • avatar
    craiger

    Gouging. Who cares? We’re not talking about rice or diapers or drinking water. Nobody needs this or any particular model of car.

    If FCA really cares, they’d build a lot more than 3,300.

    • 0 avatar
      Russycle

      This. If somebody gets taken to the cleaners because he “has to have” a Demon, no violin will be small enough for me to express my lack of sadness.

      • 0 avatar
        mcs

        Exactly, let the market determine the price. I would also like to congratulate the 3,000 or so future owners of lightly to never driven used Hellcats that will be getting an amazing bargain when the Demon buyers dump them for the latest toy. And perhaps the future owners of never driven Demons when the Lucifer or whatever the last hurrah for the platform is called goes on sale.

    • 0 avatar
      arach

      This is an important note.

      “Gouging” is an issue on life necessities… IE Charging $100 a bottle for drinking water because there’s a chemical spill and no actual shortage of water.

      Having some exotic luxury that no one needs but people just want enough to pay extra for? thats fair game.

      I think this is FCA just playing the marketing game and making it seem like they are on the enthusiasts side. When someone complains that the dealer overcharged them they can say, “We did everything we could to keep them from doing that”

  • avatar
    arach

    This makes no sense to me.

    Who cares if they charge whatever they want?

    What FCA should do is do it themselves.

    “We will sell 3300 2017 models for $110,000. We will then sell 3300 2018 models for 95,000”, By announcing that they will be cheaper next year, they’ve actually incentivized people to wait, limiting the initial demand (but demand should still suffice to sell out). Dealers can’t gouge as much because buyers are being told by the oem that the price will decline the following year.

    Then if they don’t move the $110k 2017s, then they just add incentives. And if they do move them, they get the profits.

  • avatar
    Maymar

    When did everyone here turn into Ruggles? I feel no sympathy for the future Demon buyers paying whatever ridiculous markup on an already expensive car, but we can’t claim this is the free market in action unless we had the option of buying from FCA directly as well (or whatever other beef you’ve got with dealer franchise laws).

    • 0 avatar
      bikegoesbaa

      In this case FCA is the one trying to interfere with a free market by preventing “gouging” which is just another work for “letting the market determine the selling price”.

      The free market approach would be to not bother with this plaque scheme and just sell the cars to whoever wants to pay the most.

    • 0 avatar
      ajla

      FCA by law isn’t allowed to sell the Demon directly to customers, so all the cosmic “free market” love on here rings hollow to me.

      But even then, who cares? I have two degrees in economics (FWIW) but I don’t believe the idea of “free market” needs to be followed with religious fervor. My dislike for car dealers is higher than my affinity for markets.

  • avatar
    stevelovescars

    Perhaps Dodge should just set the MSRP at $150k and keep some of the profits themselves. Then, once initial supply is met, just add rebates… you can even keep them hidden as factory-to-dealer money if you don’t want to make them public. That seems to be the tactic with every other car.

    If people are willing to pay tens of thousands over sticker price, then the OEM is leaving money on the table. Same thing if a company goes public and their stock doubles on day one. The bankers and founders are celebrating, but they did a terrible job of pricing the stock for the long-term wellbeing of the company. Similarly, you know this is really just a way to throw dealer principals a monetary bone and I’m sure a few high-level OEM execs get the cars at sticker to flip as well. Remember the Ford GT? A lot of the initial sales at sticker went to dealer principals and dealer group execs who quickly flipped them.

    I would never pay over MSRP for a car but I have paid sticker for a car I really wanted which was in limited supply once. Yeah, I knew I could have waited a year and bought it for less, but the couple of grand I may have saved later wasn’t as important to me at the time as the enjoyment I got from driving it. The market pricing for cars won’t change regardless of a meaningless little plaque on the dash.

  • avatar
    RobbieAZ

    Dealerships should be able to charge whatever they want. People will either pay it or they won’t. If they don’t sell they can always lower the price. These aren’t like epi-pens; nobody needs a Demon.

  • avatar
    rudiger

    This whole thing sounds hokey. For starters, the Demon seems like a halo car designed to generate showroom traffic. That’s not really going to be happening if it’s limited to ordered cars whose owners want to take possession when it comes in.

    And what’s the point of ordered cars only? To limit the paid price to no more than MSRP? Yeah, that ain’t happening. I’d be astonished if anyone is able to walk into a Dodge dealership and get his Demon ordered for MSRP. At the very least, whatever the agreed upon transaction, the buyer is going to have to front the entire amount before the dealership orders the car.

    • 0 avatar
      mcs

      There shouldn’t be a problem getting a Demon at MSRP. Just find a dealership in an economically depressed rural area with a salesperson struggling to make their quota.

  • avatar
    CAR COLLECTORS TAKE A STAND

    It would be nice if Dodge stepped up and stop dealerships from charging so much over sticker but we all know thats a joke. I just done my Demon contract and the sons of gun are on their best BS plan to charge me over sticker. If theres a number to report them, be sure to know i will find it and when i do i all keep everyone posted. CAR COLLECTORS TAKE A STAND!!!!!!!!!!!!!


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • redapple: Freed I think you got it. They are not big on Autonomy either. They let others work the bugs out and...
  • FreedMike: I’d say that if Toyota has something up its’ sleeve with batteries, then it makes even more...
  • MRF 95 T-Bird: My next door neighbor growing up outside of NYC had a 80 Omega in the same tan color. By around 1985...
  • brettc: Maine uses salt on major roads, but then they use a lot of sand as well on lower trafficked roads. I’m...
  • rpn453: The Micra is still available in Canada at an MSRP of CDN$10500 (US$7900). I’d be interested in test...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States