With vehicle prices surging over the last two years, the age of negotiating a price below sticker seems to have ended. Manufacturers are raising their rates to cope with inflation. But they’ve also noticed how much abuse they’ve been willing to endure via dealer markups. You rarely hear someone talking about how much they saved on their new car anymore. Now, the topic of interest is how much financial abuse you managed to avoid before driving it off the lot.
A recent study has suggested that most shoppers may be masochists that revel in economic humiliation. Commissioned by Quantrell Auto Group, the survey asked 3,361 car owners about their last vehicle purchase – learning that 35 percent purchased something they hadn’t planned on. The remaining 65 percent reportedly said they would be willing to spend up to 39 percent over MSRP to get the vehicle they actually wanted.
Car and Driver, which shared the results, noted that this amounted to around $19,000 being added to the price of the typical American automotive purchase by citing that the average new-car price now exceeds $48,000.
Considering that the study was conducted by a dealer network located in Lexington, Kentucky, and has a vested interest in seeing people pay outrageous prices for cars, it would be wise to take in these results with a healthy dose of skepticism. Then again, people have already been paying nonsense prices for the last two years – suggesting that the average consumer may not be all that sharp.
Obviously, these are desperate times and respondents for the survey in question were unlikely to be people that had been bounced out of the market thanks to high vehicle pricing. Reports that the average American household could no longer afford to buy a brand-new car were flourishing in 2017, when the average transaction was around $34,000 and dealer markups weren’t obligatory. At the time, people were outraged that the average cost of a new car has gone up 35 percent in just as many years. But that was a simpler time when few could even imagine the approaching horror.
Though that doesn’t excuse what’s happening today. Anybody paying ridiculous 39-percent markups at this point is either exceptionally weak-willed and foolish or enjoys the kind of discretionary income most people would envy. Hopefully, the people that responded to the survey aren’t actually shelling out that kind of money for a new vehicle and just made the claim by factoring hypothetical dollars they’ve no intention of giving away.
Other than the possibility that people responding to surveys don’t take them all that seriously, there were a few other takeaways from the study. Apparently, people living in Idaho are willing to pay for the largest dealer markups, with respondents suggesting that 71 percent over MSRP would be okay. However, those residing in Rhode Island, West Virginia, and both of the Dakotas said they weren’t all that interested in anything over 11 percent.
Sadly, it’s not obvious what connections can be made from this. North Dakota has a relatively high household income compared to the national average, while West Virginia has one of the lowest. But they both had the same pricing tolerance whereas Idaho is somewhere in the middle and is supposedly loaded up with people who would very nearly pay double the price for a vehicle they wanted.
Maybe the real lesson should be that context matters. After all, the survey didn’t find a bunch of people who actually paid these prices – just ones that claimed they would. However, if you happen to know someone who says they’re willing to entertain obscene prices, you may want to inform them they’re part of the problem between slaps.
[Image: Gretchen Gunda Enger/Shutterstock]
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