[stein_325i]

8 out of 10 of Car Shoppers Paid Above Sticker Price for New Vehicles in January, According to Edmunds

Originally Posted by Edmunds

SANTA MONICA, CA — February 15, 2022 — More car shoppers than ever are paying above sticker price amid inventory shortages and elevated consumer demand. According to the car shopping experts at Edmunds, buyers paid above MSRP in a record 82.2% of all new vehicle purchases, compared to 2.8% in January 2021 and 0.3% in January 2020. Edmunds data reveals that the average transaction price for a new vehicle climbed to $728 above MSRP in January 2022, compared to $2,152 below MSRP in January 2021 and $2,648 below MSRP in January 2020.

"The fact that an overwhelming majority of consumers are paying above sticker price would have been unthinkable even just a year ago," said Jessica Caldwell, Edmunds' executive director of insights. "This is in part driven by affluent consumers being willing to shell out more cash to get the vehicles that they want, but there's also a vast population of individuals who are being forced to do so simply because they need transportation and have no other choice."

Edmunds analysts took a look at the difference in new vehicle average transaction prices and compared them to the average MSRP across automakers to identify the brands commanding the largest amounts above sticker price and the brands yielding the greatest discounts. Cadillac topped the list of brands that commanded above-sticker price, with an average markup of $4,048 in January, followed by Land Rover, with an average markup of $2,565, and Kia, with an average markup of $2,289. Alfa Romeo topped the list of brands that brought below-sticker price, with an average discount of $3,421 in January, followed by Volvo with an average discount of $869 and Lincoln with an average discount of $510. The table below is the full list of brands.

"All eyes have been on Ford and GM since they both publicly called for their dealers to stop charging over MSRP for vehicles. Of all automakers, they might be in the most precarious position since they have very high-profile launches in the near future that appeal to a new type of customer. But looking at the numbers, there are clearly some other automakers who might want to follow suit," said Caldwell. "Savvy dealers, though, are conducting business during this wave of inflation in a way that's mindful of the possible adverse reaction of their customers."

Edmunds' experts say that holding off on a new car purchase would be the most pragmatic move for consumers in this market, but they also note that this course of action might be unrealistic for some individuals given that prices aren't expected to normalize for quite some time.

"Consumers might be waiting up to a year or longer if they want to hold off until the market resembles anything close to the pre-pandemic normal, but some buyers simply cannot wait," said Ivan Drury, Edmunds' senior manager of insights. "If you know you need a new vehicle soon — or if you have a vehicle coming off lease and its term can't be extended — doing extra research is critical to get an advantage, and using the list set forth below is a decent starting point if you're looking out for price discrepancies among different brandse."

[bvrider1]

Not a surprise. Thanks for sharing.

[rjjr1963]

Local Dodge truck dealer is 5K over MSRP on every single truck.

[pikkagtr]

what's that saying about a fool and his money?

[gimmethemuumuu]

…are soon parted.

[Alfisti]

Originally Posted by gimmethemuumuu

…are soon parted.

Some people just need a car though and used cars are so expensive that new may still make sense.

[heavyD^2]

Hands up if you thought Kia would be top 3. It's one thing to spend $2k over MSRP on a luxury brand but $2k is a lot when you consider the average price of a Kia. I have to give them credit for upping their game as the Koreans are starting to overtake the Japanese in a lot of industries now.

[pikkagtr]

Originally Posted by Alfisti

Some people just need a car though and used cars are so expensive that new may still make sense.

Nobody really NEEDS a BRAND new car
You also don't NEED to buy a slightly used car marked up to almost new car standards
What's wrong with a 9 yr old Toyota Camry ?
Still safe, still economical and not $45k for a new one or 40k for one that came off lease and is 3 yrs old
Sure it's not the latest and or greatest , bit it'll get you and your family safely around town

[Alfisti]

Nothing wrong with it but if the "new" car buyers move to 9 year old camrys the price of said camry will rise sharply, and that is on top of already sharp price rises. At which point it makes no sense.

[pikkagtr]

Originally Posted by Alfisti

Nothing wrong with it but if the "new" car buyers move to 9 year old camrys the price of said camry will rise sharply, and that is on top of already sharp price rises. At which point it makes no sense.

Proportionally yes, but that price hike is on an asset that has already depreciated greatly
Still not as bad as spending 45$k on an asset that will lost half in 3-4 yrs

A 2012 Camry is around 12k here in the bay area
Even if it is hiked up 20%, that's only 14.4k
Will it depreciate to 7.5 k in 3 yrs? Probably not
Still a better buy

[Alfisti]

Right but you're gonna run out of camrys. Nothing happens in isolation. I have never bought a new car in my life but without them, used cars will, eventually, cost more than new cars.

[///MPhatic]

We are about to buy a new MDX (possibly RDX) and upon calling our local dealer learned that all out of state order get at least a $1000 market adjustment, and up to $5000. This is because people are buying the cars at MSRP and selling them to Carvana for $2000 over sticker just so Carvana can have the car.

We would pay MSRP, but not a penny more. We don't pay over MSRP.

[pikkagtr]

Originally Posted by Alfisti

Right but you're gonna run out of camrys. Nothing happens in isolation. I have never bought a new car in my life but without them, used cars will, eventually, cost more than new cars.

There are always accords, civics, corollas and altimas
But you get the point

[gatorfast]

lol Alfa Romeo

[BMWILUVU]

New 2022 civics are going for 4-5k above MSRP. Sure they will say nothing about their mark-up until you get in the showroom but they are all charging it. The inventory is selling as its still in transit. The sport version is 10k over sticker. I had to laugh.

[AlexFL]

This is one of many reasons why I love BMW.

[SteveinArizona]

Originally Posted by AlexFL

This is one of many reasons why I love BMW.

+1 BMW is one of the few car companies in the chart in the minus category.

My guess is that on Kia the reason is that so many dealers are selling the Telluride over MSRP; the rest of the company cars are probably not going over.

I wonder if the MSRP differential for BMW is part of the reason that the company is selling so well.

Another thought/question: does this chart take account of items being removed from cars being sold (e.g., if a feature is removed and the company gives a credit for the removal, is the MSRP similarly reduced?)?

[kenr74]

I just sold my 2020 Mazda back to the dealer for more than I paid for it new. It's on their lot for about $2k over the 2020 MSRP. Crazy times.

[M3WC]

Originally Posted by AlexFL

This is one of many reasons why I love BMW.

Why...even in this insane market they can't fetch msrp or above?

[eluded]

Originally Posted by M3WC

Why...even in this insane market they can't fetch msrp or above?

Good luck finding an M model for MSRP

[BMWCCA1]

Originally Posted by eluded

Good luck finding an M model for MSRP

Just yesterday completed the purchase for a customer on his new M5CS—at MSRP. He will take Performance Center Delivery of this car soon, nearly one-year after placing the order.

On the other hand, a customer just told me her sister bought a G-Wagen and paid $50k over sticker.

I can remember when the Porsche 944 came out and we had a waiting list almost two-years long. My first boss (who owned the store) would never charge over MSRP, even with offers from out of our area for way over list. He just felt it was the proper way to do business in our town. May he R.I.P.

[stein_325i]

[QUOTE=BMWCCA1;28605393]

Originally Posted by eluded

On the other hand, a customer just told me her sister bought a G-Wagen and paid $50k over sticker.

Funny thing is that is now considered a bargain by G-Wagon standards.

This is the new normal