Dealer price gauging

[careyk]

I just went to my Dodge dealer...they had a Challenger SRT8 asking price...a WHOPPING 80000$$$$$....are theuy nuts...this is why I hate Dealers...any opinions??

[bobs turbo pt]

the challengers are selling for 20,000 above list that car should be nore more than 62,000 to 63,000 why 80,000 thats nuts !!

[CREWZIN]

Most dealers are like that with cars they know will be in demand. Even out beloved PT Cruisers were selling for over list price when they first hit the showrooms. Nothing like 20K of course but the bigger the initial price tag the bigger the markup.

[BLUEH20]

Who is nuts?

The vehilce is on the market at market adjusted price. You do not have to purchase it at that price. You do not have to purchase it at all.

I was still active in the business when the PT arrived on the scene--side sticers were in the neighbor hood of $10,000 to 15,000 over MSRP. We had actual biding wars on this comely little new comer. People would fly in from central Central California and one from Florida. I ask again-who is nuts?

Give the vehilce six moths on the market with novelty waneing--MSRP will be gladly accepted by the dealership. Remember-all retail business are profit orientated. The amount of profit is controled by-us-the buyer.

[careyk]

Its still nuts . You can buy the same car on ebay or other places for 56000$ you would have to be NUTs to pay a dealer that muich. Just like the first Corvette ZR1 coming out I believe they paid 1 million dollars for at BARRETT JACKSON.....people just seem to have more money than brains sometime. When the Pontiac Solstice and Saturn Sky and yes the PT came out people were lined up and willing to pay anything....now there all a dime a dozen. Why pay 80000$ for a car like the Challenger....Here in Edmonton spend 30000$ for a used SRT8..300, Jeep,Magnum,Charger and spend the leftover 50000 on a used Corvette, Porsche etc....Whatever people do is there business but I will never buy a new car again especially at gauging prices...There are too many like new used mint terrific deals to be had by buying 2nd hand 6 months to a year after the 1st buyer pays that huge depreciation. Or just spend 10000$ on a used PT that the 1st owner paid 26000$ for. I picked it up with 36000KM, with winter rims and tires,+ warranty. and skipped GST the dealer here charges...thats are goods and service tax of 5%

[ucantcme]

Get the $20,000 Challenger!! No SRT, smaller engine, basic stuff, but it's still a Challenger!

[Ironman]

The laws of supply and demand, the demand is greater than the amount of product, the dealers do exactly what they should, they bump up the price to drive away those who are not willing to pay $80,000. Now they have eliminated the huge demand, and the supply now matches demand. so don't expect to see the price drop until there are more on the market.

[CREWZIN]

Originally Posted by Ironman

the dealers do exactly what they should, they bump up the price to drive away those who are not willing to pay $80,000.

I go along with what you say except for the first part of that statement; "do exactly what they should".

Where the heck is that written?

They're price gouging pure and simple and on some commodities it's illegal. Getting sticker price for a car gives the dealer a decent profit, and not all dealers subscribe to your theory. I bought my LE Cruiser in Sept. 2000 at sticker price when all the other dealers were over charging.

[BLUEH20]

Where does the profit come from?

It is not with the new vehicles!

The real profit comes from the good, clean well maintained vehicles that are traded in on a new vehilce coupled with the general marginal credit score of the the trader.

When you purchase a used vehilce you have no ideal what the vehilce cost the dealer. Hard to believe, but I have seen people give, yes give, their vehilce freely to the seller. This is true at a dealership or "Honest Blue's Preowned Auto Store". When you trade, you lose leverage in the price you pay because it is easy to discount your vehicle. There are all sorts of gimmics to lower the value of you trade--I will not get into that now--

The key is as a purchaser, you may get a great deal...If you are getting a great deal be assured that the person that gave up that vehicle did not get a great financial deal. That is where the real profit is made on a vehicle sale.

Here is an example.

1. Seller purchases no vehilce for more than $5000
2. Puts tires battery and a few small things in the deal. Add $500
3. Sell the advertise for $7999 and sell for $6999.
4 Finance only the cash investment $5,500. No risk as your cost are basically covered. If the buyer fails to complete payments you get the vehilce back and start over on it. With all monies paid are profit.
5. Keep $150.00 out of sales price and apply to a bad debt account--sell 7 cars and you have no risk.
7. Profit margin-not counting fixed expenses approximates $1349 or 25%
8. Profit margin on a new vehicle is much closer to 3.5% to 5%.

Just keep on thinking that the dealership is ripping you off--you only think this becasue you have a basis for the cost of the new vehilce you are considering. The real money is in used vehicles and "pimped" new ones. "Pimping" is pure emotion and pure profit--why are they so many after market suppliers of neat stuff for our rides--EMOTIONAL PROFIT!

All this said--Make you ride, your ride--Drive it like you stole it!

[PurplePTGirl]

Originally Posted by BLUEH20

Hard to believe, but I have seen people give, yes give, their vehilce freely to the seller. This is true at a dealership or "Honest Blue's Preowned Auto Store". When you trade, you lose leverage in the price you pay because it is easy to discount your vehicle. There are all sorts of gimmics to lower the value of you trade--I will not ge

This is why, when I bought my 2005 Cruiser (new), I used carsdirect.com--who found me one at the price I was willing to pay (after much research). I did NOT check the box about having a trade. When I got to the dealership to sign the papers--already drawn up and with figures in place--I looked at the figure to be financed and said, take $1000 off the price, I have a trade and that is what I want for it or the sale is dead. They were not happy with me, I know, but they did it. This is the only way you know that you have gotten something for your trade (mine was a 94 Mazda with 200,000 miles on it--probably was not worth quite that but it was a nice round figure :-) I dont care if the dealer liked me--I was willing to walk and I wasn't there to be their friend!

The worst mistake people can make is telling the dealer they have a trade--or telling the dealer what kind of monthly payments they can afford. That way the dealer can manipulate figures til your eyes cross. You will end up with that monthly payment--but for like 7 years! And you will see your trade in the deal somewhere but something else will have been adjusted to account for it and you will actually get nothing.