Comments on: Should dealerships be allowed to inflate prices?

By: gregataustin

gregataustin — Sat, 05 Sep 2009 14:17:59 +0000

Well, there are two VW stealerships in Austin TX. One on the north end of town, and one on the south end of town. The one up north is really nice, the people are nice, and they stock a lot of parts the other one has to order. A $260 part costs $340 there, they have a huge markup, the other dealership charges the 260, but they are hard to work with. Over time I decided to drive all the way to San Antonio to get my parts, and eventually my new car. They are nice, don’t mark up parts, and actually take back their warranty returns, all things you can bet don’t happen in Austin. The dealership in SA does more business because they don’t have the huge markups, and they are nice. I agree that market value should dictate new/used car prices, but parts. I allready bought the car, and I should have to pay more for parts in a 100 mile circle is what angers me.

By: david

david — Tue, 25 Apr 2006 00:47:45 +0000

I can’t bellieve these comments from these people. Would you sell your house for less than market value? People buy concert ticket way over face value everyday. If you don’t want to pay, wait…. Car dealership and other businesses should make as much as the market dictates. Would you work for less than market rate? I didn’t think so.

By: philippe garnier

philippe garnier — Tue, 18 Apr 2006 16:46:43 +0000

I was ready to buy a new Z06 vette at sticker price, all in cash and no trade in. Dealer ask, just at the end,for $20.000 over sticker.NO mention of any of this on the car, the sticker or even inside all the store/ I had the feeling of getting betrayed with no consideration, and at some time saw the dealer as bad as a street crack dealer. On top of that, did I need to add that in the past 2 years I’ve lost over $35.000 in GM stock value! So I walk away with the strong feeling of never buy GM anymore, anymwhere, anytime, and I suddenly understand why GM corporation is going so bad.
I bought a 500SL mercedes under sticker few days after.
No more comment

By: Jeff

Jeff — Fri, 20 Jan 2006 03:02:55 +0000

Simple supply and demand. This is your most basic form of economics. I believe some of you should go back to school. Let me ask how many of you live in a climate that requires heat in the winter? You want to talk about price gouging look at your gas company. Getting over MSRP on a vehicle cannot be considered price gouging by anyone except the buyer. After all they are the party that decided that the premium was worth the payment. And if they paid the price they are giving thier approval of the price. No one is holding a gun to your head, (or the threat of having your family freeze)saying you must pay this inflated price of a hot new car. If there was not the demand, much less the demand giving approval of the price by paying it, the price would fall. If you think we should suggest price capping, I am in favor. As long as it is fair. Lets cap the price on everything. Mabey we could start with the wages you and your family make at work. After all the people south of the border work for a few bucks a day. Mabey you should too. You cannot live on a double standard.

By: Bill in Denver

Bill in Denver — Mon, 16 Jan 2006 05:30:59 +0000

I agree that dealers should be able to set the price that will sell in their market. However, when you’ve PREORDERED a vehicle it’s wrong for them to increase the price by $5,000 when it arrives — with no warning. It was the number of preorders that showed the dealers how popular the car would be. Let them add the markup to those who didn’t understand the potential of the Solstice and didn’t preorder. For those of us who did and made a down payment, honor the original pricing. That’s ethical. For those who didn’t preorder, let the market set the price.
Bill

By: mark

mark — Mon, 16 Jan 2006 02:21:17 +0000

If the dealer feels that they can sell the car over sticker, then by all means mark it up thats why it’s called sales. The only way I see getting around it is if everybody took saturns aproach of fixed pricing. After all selling cars over sticker, is yes going to cause dealers to lose some customers true but on the flip side selling cars at invoice is going to put alot of smaller dealers out of business. We all talk bad about sales people yes some are bad. but lets no forget it is a business the dealer and the salesman need to make a profit also.

By: Brian

Brian — Sat, 14 Jan 2006 19:20:05 +0000

I got My xbox360 for reg price of $400 which is still rediculous. But i thought i did a good job conning the sales guy because someone else had actually paid to reserve it. Sorry that guy I just had to have it!!!

By: Brian

Brian — Sat, 14 Jan 2006 19:17:00 +0000

This is one of the most rediculous arguements i have ever seen. In the world of sales, there should be no limitations on what an item can be sold for. If a consumer wants to purchase an item and is willing to pay top dollar for that item then obviously whoever is distributing this hot commodity is in a situation to make more money than if the commodity was not desireable. In the retail world the avg. mark-up is 100% some items are much more inflated. The avg. automobile is marked up 10% or less. And still in the auto sales world people will grind for every penny they can get below invoice…. yet at the supermarket you won’t here a peep coming out of their mouths when asked to pay 3.59 for a gallon of milk. If there is to be no more “additional dealer mark-ups” or “market adjustments” then there would also have to be no more negotiating the sale price whatsoever.

By: Angel Rivera

Angel Rivera — Fri, 13 Jan 2006 03:47:36 +0000

Price as you wish, this is America and it’s a free country. There is no NEED for a Pontiac Solstice, just don’t buy that car or buy another. The free market will regualte itself and the price will be adjusted accordingly. If people continue to pay over MSRP, then that’s its value.

By: Stephen

Stephen — Thu, 12 Jan 2006 16:06:49 +0000

This is a no-brainer. I can’t believe there’s even a debate.

Yes. Dealers should be allowed to set whatever price they want. If a buyer wants the car now, and the cheapest they can find is $X,000 above sticker they can choose to buy it or not.

If they don’t buy it at $X,000 above sticker, someone else will.

If no one buys it at that price, the dealership can choose to lower the price or not.

Its only GOUGING is a transaction is made. If a transaction is made, both parties must agree to it.

Would I like a brand new laptop for $150? Sure. Is IBM gouging me by setting a price above $150?

By: Bryan Detty

Bryan Detty — Thu, 12 Jan 2006 14:51:18 +0000

One of my Friends just Purchased a Red Pontiac Solstice and the Dealership said that she can take it now for $3,000 over sticker, Or she can have it sit at the dealership for a week and have it a sticker. Well she took the offer and had it at the Dealership in the showroom for a week.

It is Capitalism at it’s Finest. If you don’t like it don’t buy it because somebody is willing to pay for it.

By: Brian

Brian — Thu, 12 Jan 2006 14:23:08 +0000

I’m always looking for the best deal like every other poor schmuck, but if you force dealers or manufacturers to sell at a certain price, you’ve just defeated supply & demand. So the fancy car that is hot at this moment costs 10K more. Either suck it up and pay the premium, or wait a few months or longer and buy it at the price you want to pay. It is only a car. Let me ask you this, how much did you pay for that iPod or Xbox360?

By: dave bellflower

dave bellflower — Thu, 12 Jan 2006 10:07:53 +0000

There pulling the same thing up in cleveland with the soltice. This is great so you can accerate your depreciation by an extra 5k when the car falls apart after 2 years. What s good for gm is good for the country. I’ll buy the mx-5 and still have it 10 years from now purchased at a discount.

By: jmhm2003

jmhm2003 — Thu, 12 Jan 2006 04:55:55 +0000

Yes that legislation should be brought over here.

It would certainly improve the image of car salesmen.

By: LJ

LJ — Thu, 12 Jan 2006 00:34:33 +0000

IMHO if you pay over sticker your a fool. Its simple as that. There are times when I’ve had to go out of town to get a car I wanted because the local dealers were marking them up $5-15k. All that meant was they didnt get my business. I see it too often in the san jose,ca area dealerships w/ markups on even entry level cars. A certain VW dealer around here still has markups on base golfs and beetles. Its frustrating but I cant hold the manuf. responsible as they arent allowed by law I believe to set hard prices. Although saturn manages to do that so lets see if their dealers try to mark up the sky.

By: matt

matt — Wed, 11 Jan 2006 23:14:12 +0000

I do not think dealers should be marking up the solstices or any hot product. This can only hurt the dealer and the producer. I would say a couple months down the road after everyone else has the solstice the question would arise in the customer’s head “why did i pay 5000 more than everyone else?” The buyer will not go back to that delaer for their next car, will not refer thier friends to that dealer and possibly the company. It in the long run is a loss for the dealer and the customer.

By: James

James — Wed, 11 Jan 2006 18:38:38 +0000

Chris, this issue is simply ecomonics, believe me, if the dealerships feel that they are going to lose money in the long-run they would not be doing this. Its simply a free-market, and people who buy those cars value the car more than they do the 29000 or however much they paid. No one is forcing their hand.

Now as for GM if dealerships start demanding more solstices then they can raise their price for the dealership because demand is greater. Thats just the way the ecomony works and everyone is happy.

The only alternative is using what you (chris) thinks is the right price and we end up with shortages and then other people will start complaining.

When a company makes a good product and are happy with how much they are selling and at what price, then that is good economics and good buisness.

By: Chris

Chris — Wed, 11 Jan 2006 18:03:58 +0000

Wayne – this logic would apply if you are talking about a decision made by the manufacturer to increase prices on a hot item. That is because it is the manufacturer – not the dealer – which in the end gets hurt by these tactics, so the decision to use such tactics should be up to them, not the local boys looking to turn a quick buck.

I am currently looking for a new, sporty car and the Solstice intrigues me… however, if GM and their dealers think I’m willing to pay such a premium for one of their cars, they have to be kidding themselves. And this price gouging is going to hurt them – I can promise them that. In my case, I will admit to a pro foreign car bias because of the lack of interesting, reliable, sporty domestic cars for the last 20 years. Now that the domestics are starting to come out with some interesting sporty cars, I’m looking their way again. But if their response is to charge crazy premiums for the first decent sports car they offer in years, well, I say good luck with the bancruptcy thing and I’ll be back at the Audi/BMW dealers tomorrow, and my bias against the domestics will continue…

By: Wayne

Wayne — Wed, 11 Jan 2006 16:44:28 +0000

well if you had something that everyone wanted and you could get more than the value for it ex(real estate, Jewlery, antiques) you would just sell it for what retail is supposed to be….remember Manufacturer SUGGESTED retail Value. What about pre-owned cars? People want more than they are worth. If you pay more than retail its your decision.

By: BRobs

BRobs — Wed, 11 Jan 2006 16:14:26 +0000

A friend of mine was in the market for a new car about a month ago. He ended up buying a Mustang GT after checking out the Solstice, which he really liked. A local dealer in Columbus, OH priced the Solstice at $10K over sticker, which was his deciding factor…

By: Scott Anderson

Scott Anderson — Wed, 11 Jan 2006 14:45:15 +0000

Dealers should not be allowed to de-value cars by selling them above MSRP… All that does is upset potential future customers, and send them to other dealers and /or brands! It is typical though, of Americas pre-occupations with short-term high loft profit, and absence of consideration for the long-term.
It is hard to start a relationship with customers, something all dealers say they want, when you screw them right out of the gate. Would you marry someone that started your relationship by cheating on you because they got “more” from the next person in line behind you? Companies spend a lot of time agonizing over details, and setting pricing to bring customers the right value for thier dollar. When a car is to be sold at $20000, and a dealer marks it up to $29000, that customer will expect $29000 of content that is not there. When they realize its not, negative images of the brand and product are reinforced, making them go elsewhere for the next sale. By then, the salesman that made the comission has probably moved on as well, leaving the dealer, AND the company with nothing but downside in the long term. It is a tragic process that must end, else incentives will loom, comapnies will go bankrupt, and in ten years there may not be a business case to make anymore.