Photo: Mercedes-Benz
Car prices are soaring these days, fueled by high demand and production glitches. Add dealers’ greed to that and you have a perfect storm that affects all car buyers alike. This was expected when Jon Rettinger ordered his Mercedes-Benz EQS 580 4MATIC but what followed took him completely by surprise.
Jon was supposed to pick up his shiny new car from a Mercedes-Benz dealership when he received a call to inform him there was a $50,000 markup on the car he ordered. Even though an EQS is an expensive machine as it is, having a starting price of $119,110 for the model Jon ordered, $50k is an insane markup, accounting for around 40% depending on the trim and the extras. We’ll forgive Mr. Rettinger for backing out of the deal, and we are sure many of you would’ve done the same.
Jon also took to Twitter to express his anger at the dealer system. According to his posting, the system is fundamentally broken, allowing too much power to the dealers. This affects all the traditional car manufacturers that sell their cars through a dealer network. His “cut the middleman” approach is more than justified, especially as he emailed Mercedes Benz USA with his story and got a funny answer.
According to the reply, the pricing is completely up to the dealer and the carmaker is not legally allowed to interfere. You can see how this is flawed, especially in times with extremely limited supply. The email ends with a personal remark that probably got Jon angrier, “I certainly believe the car is worth it.” It must have been because he followed up with a picture of a Lucid Air car, stating he ordered one instead of the EQS.
His choice was easy, based on the fact that new carmakers like Tesla or Lucid do not follow the traditional model of selling cars through dealerships. Instead, both companies sell their cars directly to customers. Mercedes-Benz recently announced they will switch to a hybrid sales model, where they will sell directly to customers while the dealers get compensated for the sales loss. This will only apply in Europe at the moment, though.
Jon also took to Twitter to express his anger at the dealer system. According to his posting, the system is fundamentally broken, allowing too much power to the dealers. This affects all the traditional car manufacturers that sell their cars through a dealer network. His “cut the middleman” approach is more than justified, especially as he emailed Mercedes Benz USA with his story and got a funny answer.
According to the reply, the pricing is completely up to the dealer and the carmaker is not legally allowed to interfere. You can see how this is flawed, especially in times with extremely limited supply. The email ends with a personal remark that probably got Jon angrier, “I certainly believe the car is worth it.” It must have been because he followed up with a picture of a Lucid Air car, stating he ordered one instead of the EQS.
His choice was easy, based on the fact that new carmakers like Tesla or Lucid do not follow the traditional model of selling cars through dealerships. Instead, both companies sell their cars directly to customers. Mercedes-Benz recently announced they will switch to a hybrid sales model, where they will sell directly to customers while the dealers get compensated for the sales loss. This will only apply in Europe at the moment, though.
Here's a story. I was originally going to get a @MercedesBenzUSA EQS 580. Even had one reserved and ready for pickup. The dealer called to inform me there was a $50k (not a typo) markup on the car. I passed. Infer what you will about the dealer model protecting consumers. https://t.co/XIbzdzB5CX
— Jon Rettinger (@Jon4Lakers) December 29, 2021
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