Hyundai, Genesis Warning Dealers About Markups

With dealers having spent the last 12 months placing egregious markups on automobiles, it has become a seller’s market, to say the least. New vehicle transactions are currently averaging $6,000 more than they would have been in the previous annum. But prices had already climbed by $3,000 (year-over-year) in 2020 due to production shortfalls, encouraging fleet managers to scoop up every used vehicle they could find until secondhand cars became likewise overpriced.

It’s an abysmal situation for consumers and automakers have begun to realize they’ll be getting blamed if something isn’t done. As a result, we’ve started to see manufacturers publicly chiding showrooms for placing lofty “market adjustments” on new automobiles. Ford Motor Co. and General Motors have both made formal declarations that they’ll be penalizing dealers who issue ludicrous markups on products wearing their emblems, with Hyundai Motor Group issuing similar threats to greedy retailers this week.

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Ford CEO Asks Dealers to End Markups, Plans Punishment

You’re probably well acquainted with dealer markups by now. Supply shortages created during the pandemic have left the world with fewer automobiles and car dealerships are taking full advantage of the elevated demand. As you might have expected, this trend resulted in plenty of people overpaying or becoming cautious of a market they now see as wildly predatory.

Car manufacturers have begun asking dealerships to take it easy on the price gouging. General Motors made its plea last week and Ford has followed up by reiterating its own concerns during the company’s Q4 2021 earnings report. The Oval is worried that dealer markups are tainting its relationship with customers, with top executives making casual references to the trend back in November. Ford CEO Jim Farley is now telling dealers that they need to cut it out lest they be punished by the manufacturer.

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Auto Dealers Report 2021 Profits Will Break Previous Record

With so many articles discussing how poor automotive sales have been through 2021, one could be forgiven for thinking this was going to be a hard year for anybody owning a dealership. However, the reality of the matter is that it’s a seller’s market and those who can sell are making a killing off everyone else’s misery.

The National Automobile Dealers Association (NADA) has reported that the ongoing deficit of product has helped the average store rake in more money than they did in 2020, breaking the previous twelve-month profitability record. Today’s average dealership is reporting a net pretax profit of about $3.38 million through October for 2021. That’s more than twice what was tallied within the same timeframe last year and really goes to show how much money can be made when the customer’s needs are the only items being discounted.

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Dodge's Markup Deterrent Dexterously Defeated by Dealers

Even though we knew the limited supply of Dodge’s SRT Demon would drive up prices astronomically, Fiat Chrysler still made a valiant effort to reduce markups by prioritizing deliveries to dealerships offering the vehicle at (or below) MSRP. Unfortunately, the plan didn’t work as intended.

This was especially true after some dealerships found a workaround by having intermediaries on eBay auction off the right to buy one of their Demon allocations. Instead of selling the car above the $86,090 sticker, which forces Dodge to omit custom nameplates and other Demon perks, they’re allowing prospective buyers to bid on the “privilege” of purchasing a Demon at the manufacturer’s stipulated value — for thousand of dollars.

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  • El scotto The Horror! The Horror! Former Scirocco owner with VW PTSD. It cost more to maintain than the BMW it got traded for. The BMW cost more to maintain than the Mustang GT ragtop it got traded for.Will a used Jaguar F type ragtop lead to more counseling?
  • El scotto Most of us have radio and phone controls on our steering wheels. I have no problems pressing a button and speaking.
  • MaintenanceCosts This could either be the greatest car you'll ever buy or an exasperating money pit, and you have no way whatsoever to know before you sign on the dotted line.
  • Arthur Dailey In Ontario 'distracted driving rules apply' . In Ontario while driving or stopped in traffic including at a red light or a stop sign it is illegal to i) use a phone or other hand-held wireless communication device to text or dial – you can only touch a device to call 911 in an emergency, ii) use a hand-held electronic entertainment device, such as a tablet or portable gaming console iii) view display screens unrelated to driving, such as watching a video program or a GPS device. In fact, simply holding a phone or other device while driving is against the law. – Government of Ontario website.Other examples of distracted driving may also include: personal grooming, eating or drinking, tending to children or pets. From Campisi LLP.
  • Theflyersfan $25,000 for an out of warranty VW Golf wagon. Make peace with the deity of your choice and do it soon because the world is set to come to an end any minute now.Being hauled on a flatbed doesn't rack up any miles so I guess that explains the 29,000 mile number. But at least it's a stick shift so would someone brave in the greater Columbus area take a chance? Just keep dry towels in the car to mop up all of the water that is bound to make an entrance sometime soon and wreck the interior. And get a AAA membership.