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There’s a lot of justifiable hate against dealerships but I think the hate against them for markups is not justified. Clearly there are people willing to pay a
by czstar 4y ago
There’s a lot of justifiable hate against dealerships but I think the hate against them for markups is not justified. Clearly there are people willing to pay above MSRP. If the dealerships don’t markup the vehicles then scalpers will buy at MSRP and resell the vehicles at a markup. As bad as the dealership experience is there is less chance for fraud or theft at a dealership than from a scalper.
In a lot of places there are two scenarios in the local car market. One dealership will sell at MSRP but you’ll have to wait 4 to 6 months. Another has inventory but at a significant markup. You can buy now and pay more or wait a while and pay less. Choose the option that fits your situation. Of course, the best option would be to properly fund public transportation.
- AlphaSite 4y agoI don’t know if car scalping is a major thing, the risk reward doesn’t really work out IMO and arguably the dealership is the one doing the scalping…
- czstar 4y agoCar scalping is a thing and it would be a much bigger thing without dealership markups. The markups at the dealership means a smaller market for scalpers. In the absence of dealership markups there would be more scalpers. https://www.motorauthority.com/news/1136687_gm-threatens-dealers-would-be-flippers-with-non-transferrable-warranties https://www.motorauthority.com/news/1136687_gm-threatens-dea...
- cptskippy 4y agoMarkups are just scalping with fewer steps.
- czstar 4y agoThat is precisely the point I was making. The dealership becomes the scalper. Would you rather pay the scalp price at a dealership with the accompanying regulations and laws surrounding that transaction or pay the scalp price from someone you don’t know with much fewer regulations accompanying that transaction? The scalp market exists. I think it’s better to have that market at a dealership than from people you might not be able to track down in the case something goes wrong.
- r00fus 4y agoThe ironic thing is that what Ford really wants is to for Ford to capture those markups, not the dealers. They want what Tesla is already doing.
- trixie_ 4y agoTesla has a year backlog and no scalper issue. So it’s not that.
- czstar 4y agoTesla has significantly increased prices and such an increase lowers the ability of scalpers. I don’t know about Tesla’s policies on warranty transferability and I don’t know if that plays into things. Unlike other cars Tesla can remotely disable a car so maybe the secondary market for Teslas is different. I don’t know. There are definitely scalpers for other brands. People are special ordering Mavericks from Ford and get them after 6 months or so and then reselling. https://electrek.co/2022/06/15/tesla-tsla-increases-electric-car-prices-across-lineup/ https://electrek.co/2022/06/15/tesla-tsla-increases-electric... https://www.motorauthority.com/news/1136687_gm-threatens-dealers-would-be-flippers-with-non-transferrable-warranties https://www.motorauthority.com/news/1136687_gm-threatens-dea... https://www.carsdirect.com/automotive-news/industry-news/ford-adds-harsher-penalty-to-stop-brokers-resellers https://www.carsdirect.com/automotive-news/industry-news/for...
- trixie_ 4y agoIncreasing prices has nothing to do with scalping. Just like Microsoft and Sony should of done with game consoles, but never did - Tesla has centralized buying which allows it to easily prevent scalping.
- czstar 4y agoI don’t think you understand the market forces at play if you really believe this. If product A sells at MSRP direct from the company that produces it for $x and people are willing to pay $y for it where y is sufficiently bigger than x then there will be a reseller market for the product. If y is close enough to x then there won’t be much of a reseller market. Of course if the company has the ability to otherwise diminish the value of the product post sale then that too can distort the reseller market should the company use its power to do so. Increasing prices has much to do with whether or not there is a reseller market. You are very much wrong.
- FireBeyond 4y ago> If the dealerships don’t markup the vehicles then scalpers will buy at MSRP and resell the vehicles at a markup. As bad as the dealership experience is there is less chance for fraud or theft at a dealership than from a scalper. Dealerships are absolutely doing this themselves - create a shell company, sell to their own shell company for MSRP, sell back to the dealership at MSRP, now you get to report a compliant sale to the manufacturer, and you have a "used" vehicle on your lot with <100mi that no-one can tell you not to sell for $20K above MSRP.
- czstar 4y agoThe fraud/theft I was talking about is seller striping the vehicle of parts and putting in used third party parts and reselling the original parts. Things like that aren’t done at the local Ford dealership. Well, there’s less chance of that. My point is that dealerships are effectively the scaler and it’s better to pay the scalp price at the Ford dealership than from some random person. At least in general.