Buying a car in these times - "Regional Market Adjustment"?

This was probably a bad time to but a car, but I'm in the middle of negotiations to replace my wife's old Sedona.  Seems like every dealer in the area is tacking on a markup ranging from 3-7K over sticker.  My local dealer originally wanted 5K markup, but has come down to about 2K over sticker, which I told him I wasn't willing to pay.  He explained that the dealership isn't getting that markup; he said that their invoice price has increased that much due to increased production and transportation costs.  Does anyone know if that is true?

I know that cars in general are in short supply.  Toyota recently announced that they must cut production at some plant somewhere because they lack supplied parts with which to build vehicles.  Demand appears to exceed supply.  Prices will go up until the situation changes.

I get supply and demand, but I wanted to make sure I wasn't lining the dealership's pockets unnecessarily.   If the dealer's invoice price has really risen, though, I can understand his position a little better.

I smell greed and a big dose of, "because we can."  

It seems the salesman is trying to say the dealer's invoice price went up but the MSRP did not go up???  That seems bogus.  Yes, some cars have had mid-year msrp price increases.  

Ugly times.  I am so thankful every day that I don't "have to" buy a car in this market.  

jstein77 said:

He explained that the dealership isn't getting that markup; he said that their invoice price has increased that much due to increased production and transportation costs.  Does anyone know if that is true?

If it isn't on the Monroney label, it's bullE36 M3.

The invoice has not gone up. He's 100% full of it. People are paying over sticker because of short supply, but he fed you a line. He's better off just saying, the next guy will pay it and 9m not getting much in. Why the BS story?

Steve_Jones said:

 Why the BS story?

Because he is a car salesman !    

Yeah... the price is on the sticker. Anything else is going to the dealer. 

californiamilleghia said:

Steve_Jones said:

 Why the BS story?

Because he is a car salesman !    

Yeah. Those guys are hard wired to lie, even when they don't have to.

The thing is that whatever they make in overcharging is being lost in lack of volume.

In reply to Snowdoggie (Forum Supporter) :

There is no volume. It's not like they can make it up right now and are choosing not to sell volume, there are very, very few cars on the ground. Some stores have 0

...and the dealer keeps texting me wanting to buy my Mustang back. These guys are almost as bad as the "cash offer for your house" realtors.

Snowdoggie (Forum Supporter) said:

...and the dealer keeps texting me wanting to buy my Mustang back. These guys are almost as bad as the "cash offer for your house" realtors.

The house guys lowball, right now, car dealers are paying up. 

Kids looking at cars.  Thought I'd talk to the local Toyota guy.   So whatcha doing on pricing?

Pay sticker plus the mandatory paint/interior package for $1,895.00.   At least he was up front on the phone.  

Another argument he used was that the MSRP was set months ago, before the production and transportation costs spiked and that the factory is passing those increases to the dealer in their invoice. Plausible?

Steve_Jones said:

In reply to Snowdoggie (Forum Supporter) :

There is no volume. It's not like they can make it up right now and are choosing not to sell volume, there are very, very few cars on the ground. Some stores have 0

True. The Kia dealership only has a few Souls on the lot. All else is presold before it gets there. 

We "have" to buy a new truck as our present work truck has had enough. The local dealers here are marking up trucks $3000-$7500 over sticker.

jstein77 said:

Another argument he used was that the MSRP was set months ago, before the production and transportation costs spiked and that the factory is passing those increases to the dealer in their invoice. Plausible?

Not at all. I had a longer answer typed out, but no need to. He's just making it up. 

jstein77 said:

Another argument he used was that the MSRP was set months ago, before the production and transportation costs spiked and that the factory is passing those increases to the dealer in their invoice. Plausible?

That occurred to me as soon as I started reading this thread. I've been in that position with my own business. We were buying tubes of topical eye antibiotic, marking them up a couple of dollars and selling them for about $5. Bausch & Lomb bought up all of the manufacturers, and the wholesale price went to about $35 a tube. I wasn't going to sell the remaining stock at $5 a tube, as my selling price needed to be based on what it would cost me to replace the inventory. 

If we're talking Kia, I'm going to take the 2022 K5 sedan as an example. Both Kia's consumer and media sites list MSRP starting at $23,690.

Here's the full model rundown from the media site:

·         LX FWD 1.6T GDI I-4 - 8 A/T $23,690

·         LXS FWD 1.6T GDI I-4 - 8 A/T $24,690

·         LXS AWD 1.6T GDI I-4 - 8 A/T $26,490

·         GT-Line FWD 1.6T GDI I-4 - 8 A/T $26,090

·         GT-Line AWD 1.6T GDI I-4 - 8 A/T $27,690

·         EX FWD 1.6T GDI I-4 - 8 A/T $28,590

·         GT FWD 2.5T GDI 1-4 - 8 DCT $31,090

And, at the bottom of the page, a footnote:

MSRP excludes destination and handling, taxes, title, license fees, options and retailer charges.  Actual prices set by retailer and may vary.

And at the top of the page:

Pricing – MSRP (excludes $995 destination):

In reply to Floating Doc (Forum Supporter) :

Since the manufacturer sets the MSRP on the vehicles, if they raised the cost by $2k, they'd just raise the MSRP by the same and mail out new stickers, or the ones made after x date would have higher MSRP. They can't raise it retroactively. 
 

There are times when prices do change, and the same exact car could have a different msrp depending on when it was built and how long it was on the lot, but they can't raise cost on existing cars. 

In reply to Steve_Jones :

Thanks, I get it. I wasn't making a good comparison. 

If you won't pay, somebody else will.  That is the market right now, and there isn't much to be done about it.

Pretty much the only way to get around it is to order something. I ordered my BRZ and am waiting 3 months to get it in vs paying a regional adjustment for one. But on the flip side, I can't imagine the market for a BRZ in January is super hot in the fly over states. 

Now is roughly the worst time in the post-WW2 era to buy a car. I can only recommend what I did, which is to hunt for deals on the used market. I got my Toyobaru at something like pre-pandemic pricing, the PO basically only got a break on a couple years of depreciation. And I probably only got a deal on it because people were afraid of a newish car with modifications.