Consumer Not Concerned About Enormous Dealership Markups Because They 'Don’t Even Have The Cars'
PENNSYLVANIA – Peter Olsen needed a new car. His Subaru Legacy had been in itself a legacy within his family since purchased new in 1996. Passed down from his father, Peter had nearly driven the wheels off the little Subie. At 275,201 miles, it was time for a change. Despite the higher prices, Olsen was ready to buy new. He had saved his money and researched a number of vehicles. It was time for a sporty coupe.
“Yeah, this has got some real get up and go,” a dealer told him while looking at a new sportscar. The pristine red paint in the showroom glistened. Peter peered outside at the Subaru. The paint was no longer shiny. Looking at the sticker on the windshield, he scanned the lists of amenities his new car would have. It would certainly be more comfortable; then again it was also nearing $40,000. Understanding that there was no room for negotiation, Peter inquired about additional expenses.
“What would this be out the door with tax and title?” the salesman shifted nervously and walked away to his manager. Peter found this behavior odd. It seemed to him to be a simple question. The salesman and the manager came back a few minutes later.
“I understand you’ve been working with Danny on this awesomely fast chariot,” it completely overplayed the conversation Peter had been having. “I talked with him about it. Out the door we can do $53,532 with tax and title!” It was said in the most positive manner possible.
“What? The sticker says $39,542. How do you get over $50,000?”
“Yes, the sticker is the MSRP. That is what the car manufacturer suggests the car be sold at. But because we are the dealer, we have a slight market adjustment to account for…inflation.” The intense red paint suddenly didn’t seem as special as it had before to Peter. Had car buying always been this way? Did his father have the same trouble when buying the Legacy?
“So you are adding over $10,000 to the price of the vehicle?”
“It isn’t so much adding the money as it is adjusting the price,” said the manager with all the piety and sincerity he could produce.
“Who would do that?” questioned Peter. “It seems like outright fraud. You have the price on the sticker…you didn’t attempt to add the mark up there. And the price I found on the internet was MSRP as well. Good luck selling this one.”
“Oh, this one is sold,” the salesman admitted. His manager glared at him, but he failed to notice. “We just put this one in the showroom because we don’t have anything else.”
“You were trying to sell me a car for $10,000 over asking price that was already sold? I guess it doesn’t really matter on the dealership markup…you don’t even have the cars.”
“Chip shortage,” the manager stated. Peter admitted to himself that a lack of computer chips had disrupted the industry. Still, why couldn’t they have been upfront with him? Why the sketchiness at the dealership level? And how could the manufacturer overlook something like this? The new car didn’t matter in that moment to Peter. He thanked the shady dealers for their time (all five minutes) and walked out to the Legacy.
The cloth seats were torn, the dash was scuffed, and the windshield had a crack down the driver’s side. There were dings and scrapes to the car, and the gear shift cover had deteriorated. Even with its issues, the Legacy would continue, Peter thought.
And he drove it past 300,000 miles.