Photo: Jeep
Anyone who tried to buy a new vehicle in the past year knows how complicated the situation has become. There are long waiting lines and huge dealer markups and those grow longer and higher the more popular a car model is. A recent study by iSeeCars revealed that Americans pay on average 9.9% above the MSRP for a new vehicle, but the markups go as high as 26.7% for the most popular models.
The outrageous dealer markups everyone is talking about are here to stay, at least for as long as demand continues to exceed supply in the market. Some industry insiders even believe the carmakers are content with the situation because they can raise prices and still make a fat profit despite the lower sales. The situation is only getting worse since the customers are willing to pay more to get the vehicle they want.
“Dealers have responded to market conditions by pricing cars above MSRP to make a higher profit on specific models and to help offset lower sales volumes due to restricted new car production,” said iSeeCars Executive Analyst Karl Brauer. “In today’s market, consumers are willing to pay well-above sticker price for the most in-demand vehicles because it’s the only way they can get the vehicle of their choice and avoid a lengthy wait.”
Looking at the list of models with the highest markups, it is clear that off-roaders are the most in-demand vehicles on the market today. Also worth considering is that hybrid versions of popular models bear the highest markups, a sign that people try to offset high fuel prices by buying a hybrid vehicle.
Surprisingly, Jeep Wrangler has the highest markups on the market, selling 26.7% above the MSRP, which amounts to an average of $8,925. Ford Maverick Hybrid comes second (25%/$5,601), followed by Porsche Macan (23.3%/$13,254). One of the hottest models in the U.S., Ford Bronco, comes only eighth, with an average of 20.6% above MSRP or $7,783. This is far, far away from the price many people pay on the used-car market for a brand new Bronco.
While this might raise the question of how accurate this study is, we should note that iSeeCars only compared the list price of the vehicles to their MSRP. More than 1.2 million new vehicles listed for sale between February 1 and March 25 were compared for the study.
“Dealers have responded to market conditions by pricing cars above MSRP to make a higher profit on specific models and to help offset lower sales volumes due to restricted new car production,” said iSeeCars Executive Analyst Karl Brauer. “In today’s market, consumers are willing to pay well-above sticker price for the most in-demand vehicles because it’s the only way they can get the vehicle of their choice and avoid a lengthy wait.”
Looking at the list of models with the highest markups, it is clear that off-roaders are the most in-demand vehicles on the market today. Also worth considering is that hybrid versions of popular models bear the highest markups, a sign that people try to offset high fuel prices by buying a hybrid vehicle.
Surprisingly, Jeep Wrangler has the highest markups on the market, selling 26.7% above the MSRP, which amounts to an average of $8,925. Ford Maverick Hybrid comes second (25%/$5,601), followed by Porsche Macan (23.3%/$13,254). One of the hottest models in the U.S., Ford Bronco, comes only eighth, with an average of 20.6% above MSRP or $7,783. This is far, far away from the price many people pay on the used-car market for a brand new Bronco.
While this might raise the question of how accurate this study is, we should note that iSeeCars only compared the list price of the vehicles to their MSRP. More than 1.2 million new vehicles listed for sale between February 1 and March 25 were compared for the study.
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