Usually, buying a new car would be an exciting prospect, but that’s not the case with the current economy and the mile-high prices that plague the automotive industry. It’s quite possibly the worst time to buy a vehicle, especially if you’re looking to stretch your hard-earned dollar. So, what’s the root cause of these history-making markups, and what are the models you’ll want to avoid like the plague?
Component shortages (we’re looking at you, computer chips) have put the automotive industry in a tailspin. Automakers are scrambling to meet the growing demand of consumers, but the parts aren’t there to build the vehicles as listed or expected. This increase in demand and these shortages have pushed the industry in a new direction, quickly taking us back to an era when car dealers said anything to make the sale.
Unfortunately, dealerships are taking advantage of the widespread demand by inflating their prices, which is especially detrimental to customers who can’t wait and need a car today or yesterday. Automakers aren’t helping the situation either and are now building more expensive trims that generate higher profit margins. By the time these expensive trims reach the dealership, you might as well hand over your life savings. Here’s a closer look at those offenders ready to steal your money without a trace of guilt.
2022 and 2023 Chevrolet Corvette ($100,000 Over MSRP)
Chevrolet dealerships are cashing in on the current market trends and anticipate that drivers looking to purchase a speed demon like the Corvette have deep pockets. Honestly, this isn’t far off the mark, with the 2022 Corvette starting at $60,900, the 2023 Corvette at $61,900, and the 2023 Corvette Stingray starting at $63,195. However, these starting MSRPs are comparable with what you’re getting–a legendary sports car. So, how are dealerships taking advantage of the icon?
A quick search online reveals some astonishing figures. For example, Chevy dealerships in Virginia are charging over $12,000 more for the 2023 Corvette, with MSRPs ranging from $73,975 to $96,610. The 2022 Corvette Stingray is just as surprising and is priced anywhere between $88,104 to $98,603. Moving beyond the northeast, prices skyrocket in states like Florida, Nevada, Texas, and California. One Florida dealership has the Corvette Z06 marked up over $100,000, while another has the 2022 Corvette Stingray priced at $115,630, over $52,000 the Chevy MSRP.
2022 Toyota Lineup ($45,000+ Over MSRP)
Toyota’s entire lineup is renowned for its reliability and high resale value, especially trucks like the Tundra and SUVs like the RAV4. As expected, many dealerships are taking advantage of this by asking more than what the models are worth. For example, the 2022 RAV4 Limited starts at $35,475 and comes with impressive features that make it a great value. Imagine you’re in desperate need of an efficient and functional SUV like the RAV4, but your local California dealer only has a 2021 model on the lot. Even worse is that they’re asking $46,700 over the starting MSRP. Yes, you read that right.
The news is even bleaker when looking for a workhorse like the 2022 Tundra, which starts at $35,950. Toyota’s prices skyrocket as you progress through the lineup, with popular models like the 2022 TRD Pro starting at $66,805. Some dealerships are adding $40,000 to this price, making the truck impossible for many to afford.
Trouble continues throughout the Toyota fleet, especially for the 2022 GR86. Starting at $27,700, the GR86 is marketed as an affordable two-door sports car that’s fun to drive and delivers the reliability and performance you’ve come to expect from the Toyota brand. However, you’ll be hard-pressed to find a dealership that isn’t taking advantage of this. In some areas, the GR86 is listed as high at $60,000. What’s truly astonishing is that you can find a GR86 listed for $43,668, with the starting MSRP clearly printed alongside the asking price. There’s no shame in this new automotive game.
2022 Kia Lineup ($30,000 Over MSRP)
Kia dealerships are another group of first-class offenders, taking advantage of the brand’s rising popularity due to models like the Telluride and EV6. The 2022 Telluride is Kia’s largest SUV, earning numerous awards for its versatility and sophisticated design. It’s the SUV of the decade and doesn’t cost a fortune with its starting MSRP of $33,390. However, a few dealerships in Texas, Arizona, Illinois, and California are looking to cash in on the Telluride’s popularity and asking upwards of $18,000 over the MSRP.
Kia’s all-electric EV6 isn’t exempt from this mile-high inflation, especially since many Kia dealerships are banking that more drivers will turn to EVs to avoid the rising price of fuel. For Kia, the goal was to build a versatile all-electric SUV with a penchant for speed at an affordable price. With a starting MSRP of $40,900, Kia accomplished the feat. Still, dealerships in Florida, California, Pennsylvania, and throughout the country are quickly sinking that ship by charging up to $30,000 over the manufacturer’s suggested retail price.
2022 Subaru Lineup ($10,000 Over MSRP)
Because of the current economy, more people are turning to automotive brands renowned for their affordability, reliability, and resale value. It’s no surprise that Subaru is among these brands, but the automaker isn’t exempt from dealership markups. Best-selling models like the Crosstrek, Outback, and Forester see markups between $3,000 and $9,000 at dealerships in New York, Michigan, and Oregon. This inflation is surprising, especially considering the 2022 Crosstrek is already affordably priced at $23,145.
The biggest shocker in the Subaru lineup is the markup you’ll find on the sporty BRZ. Starting at $27,995, the BRZ is Subaru’s newest family member and is designed to perform with its track-tested suspension and Torsen limited-slip differential. Dealerships across the country are taking advantage of the BRZ’s newness and penchant for speed, asking as much as $10,000 over MSRP.
Today’s Reality
We’ve highlighted some of the worst offenders in the industry, purposefully looking for models and dealerships that are asking a small fortune for standard models and taking advantage of the current market. The prices we’ve listed are extreme, but they paint a clear picture of our reality as drivers and consumers. It’s nearly impossible to find a dealership that abides by the automaker’s MSRP. Markups, big and small, are happening everywhere, even in your backyard, and the numbers prove it.
Barely anyone noticed in 2018 when Kelley Blue Book reported that the average price of vehicles in the United States rose 3.9% to $36,270. The same was true in 2019 when the site reported an increase of around $1,800. It wasn’t until 2020’s increase of over $3,300 that everyone started paying attention, immediately noticing that prices doubled in 2021 to over $6,220. As of January 2022, Edmunds reports a new reality: the average MSRP is $44,989, the suggested price and not what we’ll actually pay.
A New Standard in the Automotive Industry
So, how do we stop feeding the frenzy and turn the tides? Industry analysts project that price gouging will taper by 2024, when many automakers are expected to debut their new EV lineups and a host of other models. But what if you can’t wait that long?
Thankfully, all hope isn’t lost. Research is vital in times like these, and fortunately, the internet is on your side. Many disgruntled buyers and industry experts have banded together to create forums, sites, and other tools to help buyers find dealerships with minimal markups and fair prices.
Even so, we can expect the car-buying experience never to be the same. While prices may come down from their orbit, buying a car is entirely different today and will continue to change. Recent events have forced dealerships to pivot, taking their inventories online and proving their brick-and-mortar approach to the car business isn’t a necessity for success. This lays the foundation for a future where dealers carry less stock, not due to shortages, but intentionally so that it appears the demand is greater. It’s the idea that there are only a few cars on the lot, so when you find the perfect one, you have to buy it before it’s gone.
To be honest, change is inevitable, and it seems the automotive industry has the upper hand. We’re reliant on transportation, which means we’re often willing to pay more for convenience or a model that represents who we are or who we want to be. There’s no escaping this need, at least not anytime soon. So, all that we can do as buyers is shop smart and not rush the sale.
