Some New-Car Buyers Seeing Real Sticker Shock

Some luxe brands selling for thousands over MSRP, but overall prices declining from December
By Stephanie Mojica,  Newser Staff
Posted Jan 31, 2022 1:30 PM CST
Some New-Car Buyers Seeing Real Sticker Shock
Buyers of new Range Rovers, Kia Tellurides, Cadillac Escalades, and other vehicles are paying thousands more than the recommended sticker price, per ABC News.   (AP Photo/David Zalubowski)

While buyers of new higher-end SUVs, sports cars, and pickup trucks have been paying thousands more than the recommended sticker price, the overall price of new vehicles is slowly on the decline, multiple sources report. Classic trends such as leasing are also changing with the times:

  • Luxury vehicle buyers paying more than ever: Ford and General Motors are fighting back against some of the dealers adding what amounts to “a tax on rich people,” per ABC News. Buyers of new Range Rovers, Cadillac Escalades, Corvette Z06s, and other vehicles are paying thousands more than the recommended sticker price. "It has come to our attention that some dealerships have attempted to demand money above and beyond the reservation amounts set in GM’s program rules," GM North America President Steve Carlisle wrote in a recent letter to his dealers. "GM will be forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity that customers expect from the Chevrolet, Buick, GMC, and Cadillac brands.” Ford sent a similar memo.
  • Leasing becoming a relic of the past: Automakers aren’t using leasing programs nearly as much as before due to supply shortages and the realities of depreciation, the Lincoln Journal-Star reports. Also, the cars that dealers have in the showroom and on the lot are loaded with the “extras” that leased cars typically don’t have. The good news is people might get a better deal buying their leased car, because the purchase price of the vehicle was calculated before the auto market changed so dramatically.

  • In general, new car prices are starting to drop again: While new car prices in all market segments are still much higher than before, January showed signs of positive change, reports. Prices are 2% lower than December, ending a nine-month trend of climbing prices. However, the average price of any new car is still $45,283—more than 20% higher than the average price in December 2019, per ABC News. Reasons for the increase include global supply shortages.
  • Inventory shortages are real in all market segments: More affluent consumers generally paid higher prices (whether authorized by the manufacturer or not) without complaint, primarily due to inventory shortages, according to ABC News. However, inventory shortages affect buyers of non-luxury cars as well, per the Journal-Star. A good way to avoid dealer markups is to order a car, though this can take six to eight weeks for delivery.

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  • Used car prices not faring much better: The average price of a used car is slated to exceed $30,000, the Journal-Star reports. Even a one-, two-, or three-year-old used vehicle can cost more than a new model. Someone who really wants a used car would be best served by purchasing a certified pre-owned vehicle—which includes a warranty and usually a competitive interest rate.
(More new car stories.)

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