- Erik JP Drobey
Aren't Cars Expensive Enough? Why I Won't Pay for Dealer Markups
Most car enthusiasts out there know that we're smack-dab in the middle of a seller's market. There are myriad reasons for this (pandemic-related chip-shortages, paused assembly lines, and pent-up demand among them), and when one factors in rising used-car prices--thanks to the economic times but also auction sites such as Bring a Trailer (which might as well change their name to Bring a Trailer Full of Cash at this point)--car buyers have less leverage than ever--at least as far as I can remember.
I've intended to sell one or both of my cars (2015 FR-S and 1990 Mazda Miata) for awhile. Both would sell at significantly higher prices today than they would have a year ago, which would be good news if I didn't need to replace them with other, similarly more-expensive-than-ever vehicles. Unless I were to downsize and drive only one car (not a practical option until my son moves out), the prudent choice would be to drive the fully-paid-for FR-S & Miata until chips and cars are plentiful again and demand softens (or until one of them breaks). Which I might well do.
I have shopped around, though, as we enthusiasts are wont to do, and there are a few practical nice-to-haves that have me looking for something new (my octogenarian mom has an increasingly difficult time climbing in and out of either low-slung car, and though I don't need anything more practical at this point in my life, some more modern safety and tech features would be welcome).
I've recently written at length about shopping for Civic Type R, so I won't re-hatch that in detail here. What I took away from that experience is threefold:
I'm a Miata person through and through;
new cars are expensive; and
dealer-markups on new "hot" cars are an abomination.
I've met and worked with some thoroughly professional, helpful, and friendly car salespeople before, one of whom I laud in that recent article. But dealers' all-too-common opportunistic interpretation of supply and demand stains the auto industry and renders cars that should be relatively affordable out-of-reach for all but the most desperate or wealthy among us.
Yes, this is a man-shakes-fist-at-the-wind kind of complaint. Dealerships are going to dealership, and people who really need new Broncos or IS500s or C8 Corvettes are going to pay tens of thousands of dollars over MSRP to get them. But what if car manufacturers demanded different practices from dealers? I do think there are historic examples of these, and I will research them (feel free to post about any you know in the comments section). And could this price-gouging exacerbate the phenomenon whereby otherwise affordable, fun-to-drive cars are becoming increasingly scarce? I don't yet know the answers to these questions, but that's not my aim with this piece.
Instead, as someone who is probably coming across as a borderline auto-industry Marxist here, I propose the following modest, anti-dealer-markup manifesto, a manifesto informed by a simple question: what if we, as new-car consumers, were to opt out of the markups game altogether? I mainly intend for these proclamations to provoke discussion, but I also hope this list can prove helpful the next time you shop for your next car.
The Anti-Dealer-Markup Manifesto
Aside from legitimate, dealer-installed accessories, we refuse to pay dealer markups. Even if refusing to pay a markup forfeits my ability to get a car I really want, I will not buy into that game. I recently saw a local Hyundai dealer listing Veloster Ns at over $41,000, and much as I'd likely enjoy that car, I'm simply not going to pay that much for one.
We refuse to shop at dealerships with excessive markups. I don't want to spend many thousands of dollars at a dealership which cynically gouges their customers. I will never shop at that Honda dealership whose manager curtly informed me that someone would pay fifty-two grand for the Type R I was looking at, despite the dealership's convenient location and well-stocked used lot. But I am willing to schlep further in order to support dealerships which value customer service and conduct business ethically.
We will use available resources which give buyers leverage. Years ago, I used Consumer Report's price quote service to purchase a GTI, and more recently, I used a similar service to buy a WRX. In each instance, I saved significant money, and, almost as valuable, I was able to shop without having to haggle over price. TrueCar has a quote service, as does the great auto journalist Tom Voelk. For cars in high demand, one might not save money, and if you do use these services, expect a cascade of emails and texts from dealerships eager for your business. Still, price quotes are a great way to make car-shopping more straightforward.
We refuse to pay non-refundable deposits in order to reserve vehicles--especially if we're not guaranteed MSRP as the final price. I've recently heard about someone who did just this. He paid a hefty, non-refundable deposit and still the dealership has refused to commit to sell the vehicle at a specific price once it's available. Is this not tantamount to extortion? Folks, even for your dream car, don't buy in to this sort of scheme!
We will speak truth to price-gouging power. I've cautioned friends against shopping at shady dealerships, and I'm comfortable calling bad dealerships out (respectfully, of course) for their opportunistic practices.
We will never pay a price for a car that we cannot afford. Car buying is emotional, and, speaking from my own experience, it can prove excruciatingly difficult to walk away from a car that's simply too expensive for one's budget.
We will prioritize driving experiences over what we drive. No matter what vehicle I drive, I try to remember that, ultimately, I don't need the latest and greatest car to enjoy driving. If the dollars don't work or dealerships won't budge from exorbitant markups, I can choose something else or keep driving what I've got--which ain't so bad in my case, and I hope the same for you.
Erik JP Drobey lives in San Francisco. He chronicles some of his culinary and vehicular adventures on Instagram as @zjpd.
The views and opinions expressed here are his own and may not align with the founders of Everyday Driver.