A shortage in automotive supply caused by the COVID-19 pandemic is leading to a rise in dealership car prices, and consumers are paying the price.
According to US-based car shopping website Edmunds.com, more and more buyers are settling for dealership prices considerably higher than the manufacturer’s suggested retail price (MSRP).
How serious is the situation? Well, according to Edmunds’ experts, 82.2% of all new vehicle purchases in the US market for January 2022 were above the MSRP. This is a massive rise compared to just 2.8% and 0.3% in January 2021 and 2020, respectively.
The website adds that the average price of a new car in the US is now $728 above the MSRP. In contrast, the average price of a new car in January 2021 and 2020 was $2,152 and $2,648 below MSRP—perhaps an indication of dealerships simply trying to move units during the worst of the COVID-19 pandemic.
Here are more numbers for you to digest from January 2022. The average price of a Kia in the US market? It’s now reportedly $2,289 above MSRP. Want to drive a brand-new Land Rover home? Prepare to shell out $2,565 above MSRP. Cadillac dealerships are also reportedly the biggest offender, jacking up their prices by an average of $4,084 above MSRP. For reference, $2,000 amounts to roughly P100,000.
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“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,” Edmunds senior manager of Insights Ivan Drury said in a statement following the findings.
“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 brands.”
So, how much are you willing to spend to get your brand-new dream ride sooner rather than later? Do these prices sound reasonable to you, given the situation in the auto industry?