Photo: Gerd Altmann from Pixabay
The car market seems like a bonanza for vehicle manufacturers and their dealers, who can jack up the prices at will. But the truth is that there isn’t much to gain in the long term from these nefarious practices, and now we have the numbers to prove it.
Most in-demand car models have excruciatingly long delivery times, and that’s not even their biggest problem. Many dealers try to buck the trend and slap customers with “market adjustment fees” or markups, sometimes as big as the MSRP. That’s when they are not selling them on the used car market for fat profits themselves. This adds to the scarcity and makes customers willing to pay even more to secure a vehicle. It looks very profitable for dealers and carmakers, but it’s far from that.
Automakers already understand that, and that’s why they try to curb this trend by imposing stricter rules on their dealers. The carmakers have tried many things, from vehicle allocation cuts to fines and even more drastic measures. Still, the temptation and the rewards seem too big to pass. A new GfK study proves that price hikes leave car buyers with strong negative feelings toward auto brands and their dealers.
Instead of the generous discounts from years ago, 80% of car buyers had to pay at or above the MSRP, according to the GfK research. More than a third of them (34%) confessed to paying fees they had never heard of before, and many had to compromise on the model, the features, or the dealership just to secure a vehicle.
As you’d expect, even if they did, this doesn’t mean this didn’t make a negative (and lasting) impression on them. After all, it’s hard to be forced to pay above the MSRP, but for a car you wouldn’t want in the first place? That’s outrageous.
According to the study, the depth of the resentment is unprecedented, bordering outright hostility in the case of the car dealers. It might not matter to them now, but time is not on their side. One-third (32%) of those who paid above the MSRP said they would not go to the same dealer for service, while 35% would tell others not to go to that dealer. This will surely hurt their business since most profits come from the service department. Automakers are not spared either, with 27% of those who purchased a vehicle above the MSRP vowing never to buy the same brand again.
Automakers already understand that, and that’s why they try to curb this trend by imposing stricter rules on their dealers. The carmakers have tried many things, from vehicle allocation cuts to fines and even more drastic measures. Still, the temptation and the rewards seem too big to pass. A new GfK study proves that price hikes leave car buyers with strong negative feelings toward auto brands and their dealers.
Instead of the generous discounts from years ago, 80% of car buyers had to pay at or above the MSRP, according to the GfK research. More than a third of them (34%) confessed to paying fees they had never heard of before, and many had to compromise on the model, the features, or the dealership just to secure a vehicle.
As you’d expect, even if they did, this doesn’t mean this didn’t make a negative (and lasting) impression on them. After all, it’s hard to be forced to pay above the MSRP, but for a car you wouldn’t want in the first place? That’s outrageous.
According to the study, the depth of the resentment is unprecedented, bordering outright hostility in the case of the car dealers. It might not matter to them now, but time is not on their side. One-third (32%) of those who paid above the MSRP said they would not go to the same dealer for service, while 35% would tell others not to go to that dealer. This will surely hurt their business since most profits come from the service department. Automakers are not spared either, with 27% of those who purchased a vehicle above the MSRP vowing never to buy the same brand again.
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