topic Re: New Vehicles above MSRP? in Auto Loans

New Vehicles above MSRP?

Boragard — Thu, 29 Sep 2022 07:35:26 GMT

Hello all,

Thanks for reading. I will try to keep this post short as i am typically long winded. On September 3rd, I reported my Hyundai Sonata stolen (thanks to the Kia Challenge), On September 4th, I received a call from the police department stating my car has been recovered and involved in an accident. The police told me that witnessess saw the juvenile offenders in my vehicle, they hit a car then hit a tree. Police stated the damage was pretty bad and probably totaled. Fast forward, insurance totaled the vehicle. I had a 2019 Hyundai Sonata, that was paid off in its entirety. Insurance gave me about $4k over market price due to used car price fluctuations (No complaints on my end).

I have my eyes set on the 2023 Honda HRV EX-L in Nordic Forest Pearl. I have gone on a test drive and like it. However, while inside the dealership they stated new car prices are about $4k over market. I didn't like the sound of that and walked out. They tried to convice me otherwise. Since then I have been calling various dealerships across the country and they all have the same sentiment. Are car dealerships really charging $4k over MSRP? or is this just a scam to get more money.

I've asked several dealers why this was the case and they all say the same thing "low car shortage" and "the demand for new cars are high". Another stated I got about $4k over in my used vehicle so it only makes sense to charge $4k on the new vehicle. One even pointed out that used 2022 HRV are going for about $4-5k less than newer ones.

Logically, it all makes sense to me but financially it doesn't because they are just "installing" things on a vehicle that would otherwise be undesirable. Therefore, my question is does this seem to be legit or just a ploy to get more money from new car buyers?

Re: New Vehicles above MSRP?

FireMedic1 — Thu, 29 Sep 2022 11:07:31 GMT

This has been going on for a while. Ford for instance is not happy due to the dealers raising the price over MSRP. They've been getting on the dealers. List as MSPR or we wont send you anymore cars. I was offered 8k over what I paid for my Explorer. I said yeah right. Then what. Pay a higher price than what I paid for the same crossover?. Do I look like an idiot? Hung Up.

https://www.cbsnews.com/news/car-prices-new-used-ford-general-motors-dealerships/

Re: New Vehicles above MSRP?

Laredo — Thu, 29 Sep 2022 12:05:59 GMT

Many dealerships list the price way above MSRP but there are also many dealerships that will not have a dealer mark-up. Even the Ford Ranger had a $10K mark-up when I was looking around. I saw a Toyota Supra with a $30K mark-up because of the color. The days of haggling the price below MSRP are gone. A friend of mine just purchased a 2022 Mustang and found a dealership with no dealer markup about 100 miles away. I purchased my 2022 BMW here in VA at MSRP. From what I have seen, at least in this area, Ford, Chevrolet, Honda, Toyota, and Dodge all have dealer markups but BMW, Mercedes, Lexus, Cadillac, and even Subaru sell at MSRP. It is hit or miss. If you can get a CPO with very little miles may save you some money. My brother is a finance manager at a dealership and he said they don't have many cars due to the chip shortage which increases demand for what they do get and so they add the mark-up.

Re: New Vehicles above MSRP?

LakeLife — Thu, 29 Sep 2022 13:36:12 GMT

Not sure where you live OP, but there are MSRP deals out there. Be careful though, some of them will try to add paint protection and garbage like that. We sold my wife's 2016 Jeep Patriot for nearly what we paid for it in January and were able to get a 2022 Tucson Hybrid for MSRP at a dealer in Alexandria, VA. They only added a few dealer add-ons (roof rack, floor mats, etc) but were things we would have likely wanted anyway. It was a great deal for us all the way around, and we love the Tucson.

Re: New Vehicles above MSRP?

cashorcharge — Thu, 29 Sep 2022 16:33:34 GMT

@FireMedic1 wrote:
This has been going on for a while. Ford for instance is not happy due to the dealers raising the price over MSRP. They've been getting on the dealers. List as MSPR or we wont send you anymore cars. I was offered 8k over what I paid for my Explorer. I said yeah right. Then what. Pay a higher price than what I paid for the same crossover?. Do I look like an idiot? Hung Up.
https://www.cbsnews.com/news/car-prices-new-used-ford-general-motors-dealerships/

Spot on @FireMedic1

Prices are all over the place OP. And yes, there are likely some dealers selling at MSRP but you're looking for a 2023 in 2022, your looking at Honda which pretty much sells themselves...and you're looking at the HRV which is ALL NEW for 2023 so finding a "deal" is not going to be easy. Where I live, Penske Dealers have made it a point to state they are "not" selling cars over MSRP so you may try that route. That could also just be a local thing to me versus a Corporate/Public Auto Group Policy. Best of luck...

Re: New Vehicles above MSRP?

increasingmyfico — Thu, 29 Sep 2022 17:27:57 GMT

@Boragard wrote:
Hello all,

Thanks for reading. I will try to keep this post short as i am typically long winded. On September 3rd, I reported my Hyundai Sonata stolen (thanks to the Kia Challenge), On September 4th, I received a call from the police department stating my car has been recovered and involved in an accident. The police told me that witnessess saw the juvenile offenders in my vehicle, they hit a car then hit a tree. Police stated the damage was pretty bad and probably totaled. Fast forward, insurance totaled the vehicle. I had a 2019 Hyundai Sonata, that was paid off in its entirety. Insurance gave me about $4k over market price due to used car price fluctuations (No complaints on my end).

I have my eyes set on the 2023 Honda HRV EX-L in Nordic Forest Pearl. I have gone on a test drive and like it. However, while inside the dealership they stated new car prices are about $4k over market. I didn't like the sound of that and walked out. They tried to convice me otherwise. Since then I have been calling various dealerships across the country and they all have the same sentiment. Are car dealerships really charging $4k over MSRP? or is this just a scam to get more money.

I've asked several dealers why this was the case and they all say the same thing "low car shortage" and "the demand for new cars are high". Another stated I got about $4k over in my used vehicle so it only makes sense to charge $4k on the new vehicle. One even pointed out that used 2022 HRV are going for about $4-5k less than newer ones.

Logically, it all makes sense to me but financially it doesn't because they are just "installing" things on a vehicle that would otherwise be undesirable. Therefore, my question is does this seem to be legit or just a ploy to get more money from new car buyers?

So wait... you're getting $4000 over for your dearly departed car but the dealer is running a scam for charging $4000 over for a new car? I get that paying as little as possible is the goal, but be realistic. There are some dealers selling for msrp, but it will depend on location and the vehicle. The higher in demand a vehicle is the more likely for there to be a market adjustment. That's the reality of the current market. You have picked out a good car that will retain value so you're okay there.

Re: New Vehicles above MSRP?

mavric — Thu, 29 Sep 2022 17:33:58 GMT

Hey ....... This web site has list of dealers ,that IS NOT charging MSRP . YAA.con

I have only looked at it , Hav'nt used it , Lookes like you can save a lot of money there.

Re: New Vehicles above MSRP?

DSTforlife — Fri, 30 Sep 2022 02:43:07 GMT

The deals are out there, but they are few and far between. You have to look for them.

just today, I finalized a deal to purchase a brand new 2022 BMW X3 and I paid 3k BELOW MSRP...no frills and no trickery in the deal. Before I agreed to the deal, a friend connected me with a friend of his that's BWM sales person. He looked at the deal sheet and let me know if it was good.

on the other end of the spectrum, I was quoted an out the door price on a GV70 that had 10k in mark-ups and mandatory "protections". I quickly ran from there!

Re: New Vehicles above MSRP?

RobynJ — Sat, 01 Oct 2022 15:39:12 GMT

If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.

Re: New Vehicles above MSRP?

increasingmyfico — Sat, 01 Oct 2022 15:43:43 GMT

@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.

Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.

Re: New Vehicles above MSRP?with

RobynJ — Sat, 01 Oct 2022 16:00:25 GMT

@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.

You are correct with cars lower milage but I can get a decent car for 7k-10k all day long in my area. This is however 150k mile car but if its clean and makes it a year with no problems you can recoup your cost of the car and have it for a year and be in a better position to purchase a newer car at normal prices in my opinion.

Re: New Vehicles above MSRP?with

increasingmyfico — Sat, 01 Oct 2022 16:03:15 GMT

@RobynJ wrote:
@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
You are correct with cars lower milage but I can get a decent car for 7k-10k all day long in my area. This is however 150k mile car but if its clean and makes it a year with no problems you can recoup your cost of the car and have it for a year and be in a better position to purchase a newer car at normal prices in my opinion.

Or you can do like I did. I bought a Toyota Tacoma. Free maintenance for two years and sky high resale even before the shortage. I'll get most of my money back and not have to worry about repairs on a 150k mile car that's been used up. There are several vehicles with really good resale that this can be done with. Used car purchases don't make sense right now.

Re: New Vehicles above MSRP?

disdreamin — Sat, 01 Oct 2022 16:09:37 GMT

@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.

I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.

Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.

Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.

Re: New Vehicles above MSRP?

RobynJ — Sat, 01 Oct 2022 16:17:50 GMT

@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.

Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.

Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.

I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.

Re: New Vehicles above MSRP?

increasingmyfico — Sat, 01 Oct 2022 16:21:28 GMT

@RobynJ wrote:
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.

Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.

Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.

I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.

Re: New Vehicles above MSRP?

disdreamin — Sat, 01 Oct 2022 22:52:08 GMT

@increasingmyfico wrote:
@RobynJ wrote:
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.

I don't have any industry knowledge, I'm just basing my projection off what I've been seeing. I shopped for two vehicles last year, and I had been shopping for another this year until my current vehicle was damaged. There is remarkably little inventory on lots across the board. I've checked multiple cities and states, many dozens of dealerships, and various manufacturers (specifically Honda, Toyota, Subaru, and Mazda), and every indication is things are scarce. That paradigm of a lot full of vehicles, an end-of-the-month push, and significant discounts has changed, and I am not convinced it will go back. We can revisit in a year though, and I'll absolutely eat my words if I was wrong.

Re: New Vehicles above MSRP?

Gmood1 — Sun, 02 Oct 2022 15:59:23 GMT

With the current hikes in interest rates. The auto market will eventually correct itself. I wouldn't buy a used vehicle in the current market. The mark up is higher than on the new vehicles IME.

Also do not pay over MSRP, keep shopping. The Honda HRV isn't on the list of high demand vehicles. GF ordered two hybrid Ford Mavericks from two different dealerships a few weeks ago. These vehicles are in extreme demand! She called at least 11dealerships. You would be suprised how much the fees and prices vary from one dealer to another. She was able to find two dealerships that charged MSRP plus DOC fees.

Don't accept any add-on fees. Get the info on the DOC fee up front. Some of those DOC fees are outrageous! I had her walk on several of those overpriced fees as well.

The only way prices on this stuff is going to come down. Is if we as consumers stop overpaying. Same goes for the housing market.

Patience and more patience will get you the best deal.

Re: New Vehicles above MSRP?

BMW_Jess — Tue, 04 Oct 2022 04:14:26 GMT

@increasingmyfico wrote:
@RobynJ wrote:
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.

Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.

Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.

The above line does not reflect my own industry knowledge firsthand. If they were happy, we wouldn't be producing record numbers of cars, here at my manufacturer. The only thing slowing down the market is the chip shortage, which only makes sense due to the loss of one of the two suppliers globally. Add in changing their production model from home electronics, back to automotive electornics; before adding in the influx of new clientele from the first supplier - and it's made a mess for us in the automotive manufacturing industry. Graciously, we have not had any major issues, other than a brief Covid related shutdown from our US supply chain.

Re: New Vehicles above MSRP?

increasingmyfico — Tue, 04 Oct 2022 04:52:31 GMT

@BMW_Jess wrote:
@increasingmyfico wrote:
@RobynJ wrote:
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:
If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.

Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.

Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.
The above line does not reflect my own industry knowledge firsthand. If they were happy, we wouldn't be producing record numbers of cars, here at my manufacturer. The only thing slowing down the market is the chip shortage, which only makes sense due to the loss of one of the two suppliers globally. Add in changing their production model from home electronics, back to automotive electornics; before adding in the influx of new clientele from the first supplier - and it's made a mess for us in the automotive manufacturing industry. Graciously, we have not had any major issues, other than a brief Covid related shutdown from our US supply chain.

Not sure who you are with. Sounds like one of the smaller niche brands. Toyota's Bob Carter has said he does not want over a 45 day supply of inventory again. Ford is pushing the order model to cut down on cars built to sit in inventory. They do not want to go back to paying customers to buy cars. They are making so much more cash. The industry is forever changed.

Re: New Vehicles above MSRP?

Gladius — Tue, 04 Oct 2022 12:53:42 GMT

@increasingmyfico wrote:
@Boragard wrote:
Hello all,

Thanks for reading. I will try to keep this post short as i am typically long winded. On September 3rd, I reported my Hyundai Sonata stolen (thanks to the Kia Challenge), On September 4th, I received a call from the police department stating my car has been recovered and involved in an accident. The police told me that witnessess saw the juvenile offenders in my vehicle, they hit a car then hit a tree. Police stated the damage was pretty bad and probably totaled. Fast forward, insurance totaled the vehicle. I had a 2019 Hyundai Sonata, that was paid off in its entirety. Insurance gave me about $4k over market price due to used car price fluctuations (No complaints on my end).

I have my eyes set on the 2023 Honda HRV EX-L in Nordic Forest Pearl. I have gone on a test drive and like it. However, while inside the dealership they stated new car prices are about $4k over market. I didn't like the sound of that and walked out. They tried to convice me otherwise. Since then I have been calling various dealerships across the country and they all have the same sentiment. Are car dealerships really charging $4k over MSRP? or is this just a scam to get more money.

I've asked several dealers why this was the case and they all say the same thing "low car shortage" and "the demand for new cars are high". Another stated I got about $4k over in my used vehicle so it only makes sense to charge $4k on the new vehicle. One even pointed out that used 2022 HRV are going for about $4-5k less than newer ones.

Logically, it all makes sense to me but financially it doesn't because they are just "installing" things on a vehicle that would otherwise be undesirable. Therefore, my question is does this seem to be legit or just a ploy to get more money from new car buyers?

So wait... you're getting $4000 over for your dearly departed car but the dealer is running a scam for charging $4000 over for a new car? I get that paying as little as possible is the goal, but be realistic. There are some dealers selling for msrp, but it will depend on location and the vehicle. The higher in demand a vehicle is the more likely for there to be a market adjustment. That's the reality of the current market. You have picked out a good car that will retain value so you're okay there.

Unfortunately, that is a "scam" that dealerships play when you trade in a car and buy new at the same dealership. They will fix the numbers to make it seem like you got a decent deal, but the bottom line is the dealership will ALWAYS come out ahead. OP shouldn't have told them he got $4k from the insurance company. That is none of their business. And here you see they are using that $4k as leaverage.