By Jeff Glucker
I am fully aware of how supply and demand work. But I also believe that dealer markups are total bullshit. The automaker sets the price for a vehicle, and you would expect to pay that price for the vehicle. It gets far worse, however, when a dealer takes your deposit for a vehicle, alerts you that the vehicle has arrived, and then tells you it’s going to cost an extra $30k over what you agreed on initially.
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This is more justification for why dealerships should only exist to:
1) provide test drives in new cars so the owner can experience a potential purchase first-hand, and
2) provide maintenance and repair services.
They should not be a place to buy new vehicles. I feel that all purchases should be direct from the manufacturer, and in cases where the buyer does not or cannot order via internet, the dealership can initiate the order for them. But there should be no monetary transactions and no local dealership sales team.
I absolutely despise new car dealership practices. I hope to never buy a new vehicle again.
the way i see it, carmakers make these as rewards for the dealers. the inflated price sucks, but it’s not like the manufacturer isn’t expecting it and it’s a miscarriage of justice. the dealer that sells a lot of cars gets the prize of a high-margin car that carries some prestige.
i agree that it sucks and is just rent-seeking bullshit, but that’s true of the entire dealer model generally in the 21st century. as long as someone’s willing to pay the higher price for the exclusivity, why would the dealer ever feel like they should sell it for less? i can’t blame them.
Yeah, it sucks and is kinda ridiculous, but I think one way or the other the market will speak. I can imagine that even if the dealer didn’t try this BS, if people are willing to pay the inflated price, someone will try to take advantage of that, and I wouldn’t be surprised to see exclusive-car scalpers turn up. I would like to see the dealer model just go away, though. I wonder what would happen if manufacturers had to build this sort of thing into their MSRP from the get-go? I wonder how many people would be in favor of eliminating the dealership model (or at least, the legal protections of the dealership model) if it were put to a vote?
What really disturbs me about this story is the fact that apparently the buyer had reached an agreement with the dealer to purchase this car, at a given price (in this case, MSRP), and then got that yanked out from under them. I have to assume there was some kind of loophole clause in the purchase contract somewhere (which is still a scummy thing to do, unless they made it very clear that the price could change and all the buyer was reserving with their deposit was the option to buy), because otherwise this would seem to be a pretty open-and-shut contract law case. If a dealer wants to try to charge $30k over MSRP for a car, they can try, and we’ll see whether they can convince people to pay it. If they make a deal to sell a car to someone for a particular price, and then renege, then we’ve really got a problem.
I have no problem with ADM on this sort of product normally – it’s typically on higher end product that is no where near a necessity, and it’s usually very well disclosed (I think?). It’s the cost of impatience or to be the first with the new hotness. No one suffered unduly because they spent an extra $25k on a Demon.
That said, deciding arbitrarily to apply it after the deal was made is the exact sort of scuzzy I expect from a car dealer. Maybe this is just fate intervening to say the AMG E-class wagon is a better choice.
This is the real problem. How is it even legal to demand a higher price after the deposit was paid? That implies a contract was signed. It’s not just a moral dilemma, like when one of us sells something off Craigslist and buyer 2 offers more before buyer 1 shows up.
Hopefully, the dealership will be contacted by the would-be buyer’s lawyer.
Crossing fingers that this lawyer knows their…eh…trade.
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1) Big money spoils everything it touches.
2) Greed is a hell of a drug.
3) Seriously, f#@& those guys.