What the heck is a "Market Value Adjustment"?

21 large for a Fiesta? Are you berkeleying E36 M3ting me? A Fiesta?

novaderrik wrote: another stealership markup that i remember seeing was on a Mercury Marauder that sat in the showroom for over a year with a markup of $5k over sticker price.. about a week after they took the markup off the car, i was in the dealership just looking at new cars and killing time and was offered the car at $5k under dealer invoice just so they could get it out of the showroom.. if i had wanted the payment, i could have had a brand new Mercury Marauder for around$15k.

similar situation where I live. The last Marauder left the lot for well under $20k. 6 months later the mercury dealer closed their doors.

Streetwiseguy wrote: Let me show you some math. Car A costs the dealership $10,000. The MSRP is $12,000. Each car makes $2k when sold at msrp. Discount the car 1k, you must sell twice as many cars to make the same amount of money. Get a hot model to sell, add $3k to make selling price $15,000, and you can sell 1/5th as many cars as if you sell at the discount. This is how the world works, and it is why I giggle as I listen to GM selling Cobalts up here for $11,000 right now. They were losing money hand over fist selling them at $15k. How's that gonna work out for them? Buy high, sell low, make it up in volume, hope for some more taxpayer dough?

they are probably trying to clear out '10- and maybe even some '09- Cobalts to make room for the '11 models.

Please excuse my inability to read the thread completely before commenting.
I meant no harm.
I have deleted my foolish remarks (so that you can delete them as well.)

I asked the dealer the exact same question when I bought a Miata in 1990. His response was "Pure Profit"!

The cars were selling so fast back then that they did not care who they pissed off. I did end up buying a Miata at full list, but I can tell you 21 years later that the statement cost Mazda a few dollars when it came to buying the next car.

Another angle which people don't think about: if you slap a MVA sticker on a car, you now have a higher starting price to 'discount' down to MSRP. Otherwise, you'd start discounting at MSRP meaning your discount cuts way into your profit.

I just spent the past week "cruising" the interstates (Tn. to Pa. to Fl. to Tn.) and saw maybe 1 or 2 Fiestas. I know they are supposed to be on dealer's lots, tho I never saw/see any....but ADM on a car that no one is buying?

BTW, if you think $21K for a Fiesta is ridiculous, you haven't seen the Focus SEL, have you? It's the top of the Focus model line, introduced in '09, and with the automatic and LEATHER interior these cars sport, you are looking at a sticker of $21K for a car that is (in my opinion) overpriced at $16K.

I remember seeing that on the new beetles and PT Cruisers when they were new.

Since when did making a profit become imoral? This is all about supply and demand and they are trying to make hay while the sun shines. The delaership knows that sooner or later they are going to take a bath and sell some undesirable cars for less than they have payed for them from the manufacturer.

I would suggest that this is happening behind the scenes with just about everything we buy, we only notice it here because we can negotiate over the price. Stuff doesn't go on sale if they can move all the units they have in stock at the list price.

Folks getting upset over supply-and-demand pricing is funny. That shirt you bought before Christmas for $30 sells in January for $7. Clothing stores aren't losing money at their lowest price, just covering their costs. Clothing markups are so high it would flip your lid if you knew.

David

It is not the intent of getting profit through supply and demand that is being bashed here, it's the process of getting that profit. This is especially true when you can negotiate the final price of the product.

I know a few of the shops making headway on the '11 5.0 Mustang GT that paid at least MSRP, if not more, to get their names in the magazines before someone else. But since they are out now and on the lots, I sure as hell wouldn't be buying one for more then MSRP. There isn't any reason to still be holding onto the ADM price at this point in the game, unless you are the sucker PT Barnum is talking about all those years ago.

Brian

exST165 wrote: I would suggest that this is happening behind the scenes with just about everything we buy, we only notice it here because we can negotiate over the price. Stuff doesn't go on sale if they can move all the units they have in stock at the list price.

One year we wanted to plant a lot of trees on our property.

We ended up buying enough to go wholesale, but I looked at prices everywhere, and was surprised at how they kept changing throughout the summer. Sale prices stayed pretty much the same, but the list prices (used to indicate what a great deal the sale was) kept changing.