With all the "great" news about the Mustang hitting the board, I took it upon myself to bring a little rain to the parade.
I personally find this to be disturbing, but many here said it would happen.

Check this out...
QUOTE - "A Ford dealer in central California who asked not to be identified says he's selling each Mustang he gets for $4,000 to $5,000 over the list price of $19,410, which includes destination."
Straight from THIS ARTICLE in Autoweek.

I just don't get it.
Why do mfg's let dealers get away with it?
Why do people PAY this?!?!

We all know what happened with the GTO, and it was a higher base-price car.
For a $35k car, a $4k markup is almost a 12% upcharge.
For a $25k car, the same $4k is a 16% upcharge!
For a car at $19,400 , a $5000 mark-up is a whopping 26% !!!That's a big percentage IYAM!

So help me out guys (and gals)...
How can modern, smart, intelligent, well-informed consumers just look the other way and plop down the dough?

AND, why do the mfg's let them do it?

Thanks for the thoughts... I promise to read them all thoroughly!

 

1. uninformed buyers that don't know the car can be had at a lower price...they literally come in and believe EVERY line from the sales snake

2. "First on the Block" mentality, especially with a new, fresh, cool product--The same reason why the VW New Beetle was selling for $31,000 during its first year, the PT Cruiser has $10K markups, etc. etc....(The greatest one I ever saw was a Plymouth Prowler with a $37,000 markup!!)

3. People with more $$$ than brains (think BMW) that have NO qualms paying whatever the cost to get the car home...Some people are luckily rich enough or simply too lazy to shop around for a better deal

Not much the bigwigs in Detroit can do, other than maybe send a terse letter...and far be it from me to actually defend the sales sharks, but the general answer you get from them is: When sales are slow, or a certain model isn't popular, you as a buyer can go into the dealer and expect to work out a deal below MSRP....why shouldn't it work in reverse when they have really HOT items?

 

I dont know which is worse... the dealer who marks up over MSRP.... or the buyer who pay this and give them reason to keep doing it.

 

I remember a Ford dealer near my place in December 1993 that had a new SN95 Mustang GT in the showroom that he was selling for $29,000 (it was loaded & listed around $21,000 at the time). By the following month, most I saw were selling for California's typical $1,000 mark up, so I don't think Ford dealers will be able to sustain mark ups as Ford sends more into the market.

I'm not going to bash them as much as I did Pontiac dealers over the GTO. Dealers were offering new Mustangs for just a few hundred over "invoice" for ordering before they even hit showrooms, and I can still find a dealer willing to order one at or just above sticker. Dealers are even letting you sit in and take short rides in cars coming in that were ordered by customers.

Far cry from Pontiac dealers actions regarding GTO. It's darn near impossible to find a new Mustang that isn't spoken for on a dealer's lot, opposed to some dealers having GTOs sitting on lots for months. Also, the "No Test Drive without a promise to buy" policy of every Pontiac dealer I stopped at except one in Tolleson Arizona didn't help.

I don't agree with dealer gouging, but knowing it's only temporary and dealers seem to be going the extra mile to sell them, I'll cut them some slack for now.

Magnumforce's comments on #'s 2 & 3 is right on the money from the buyer's side. If there is little or no supply, it's natural to try to make the most of it off those who MUST be 1st in line.

Same thing's going to happen when the next F-body comes out (let alone the Solstice). Hopefully not to GTO extremes.

 

Even though Mini Coopers have been out for over 2 years all dealers in the Western US and in California (except for Long Beach Mini and one Mini Dealer in Northern Calif) are still charging between $2500-$5000 markup. The two dealers that dont markup currently have between 6 month- 1 year waiting lists (depending on model). I bypassed this local insanity and bought and ordered my-spec Cooper from a Mini of the Hamptons in NY and was actually able to buy it below MSRP.

My point is that if some dealers (especially in sunny/warmer states) start getting to greedy people will find other methods to get the car they want for alot less money.

 

Amen, brother!

I stopped by the local Ford dealer last weekend and there was no mention about any mark-ups anywhere. Maybe they didn't have any... Didn't want to talk to a salesman, so I didn't find it out.

Magnum Force pretty much summed everything up.

TS

 

I was going to note this. At Assael Mini when I test drove, I tested a non-S Cooper that was selling for $28,000.

Why is it tolerated? Consumers are stupid enough to pay it. Around these parts, most any hot car seems to get marked up. Every Dodge dealer I go to has a 3-5k markup on Magnums and SRT-4s, Mazda even had markups on Protege 5's back when they were new and I was looking. I for one don't tolerate it, and just will buy another car. If more customers were like us, it wo uldn't ever happen.

 

Because they lack one or more of the 4 adjectives you just mentioned.

 

Its crazy out here in California isn't it?

I saw a Scion TC with some real nice 18inchers (they could have been 19's) and I have to say that was a clean looking ride so Im not surprised you bought one (they're also a good value for the money too).

 

Case in point, right there.
If you were a buyer, ready to purchase, and walked onto the lot only to find the car you want, color you want, options you want, with a $5k upcharge you DON'T want... what would you do?
I'd Leave... with my money.

1) So did that dealer miss the chance to sell me that car? Sure did.
2) Will he sell it to somebody else? Likely so.
3) At that marked-up price? Maybe... maybe not. Let's say he did sell it.
He COULD HAVE sold 2 cars though. One to me and one to the "sucker" that came later.
4) Would the dealer be better off selling 2 cars? Don't know.
His profit may in fact be much better selling one with a $5k markup as opposed to 2 at regular MSRP.
5) Would Ford be better off selling 2 cars? YES.
Dealers are rated on volume. Ford doesn't care if the dealers are making $XXXX profit per car, or $YY per car, just how much volume is going through there. Ford makes money on EACH CAR SOLD - the more, the better.

Notice how the dealer in the article didn't want to be identified?
*Didn't want anybody reading the article to hear him say, "I'm stickin' it to you down here!"
*Didn't want a visit from the local Ford DSO manager either I'd wager.

I guess I agree with some of you guys about a dealer making what he can. After all, that's what capitalism is all about. But why not $250 or $500?
Does it always have to be $-thousands?!?!

It just curdles my milk to see the Mustang lose ANY potential sales because some dealer wanted to bag you for $5k.
After all, I'm wanting it to prove there IS a market for such a car - a huge market - to justify it's existence and endorse a Camaro/Firebird return.
And every sale makes a stronger case.

 

People who pay markups on mass produced cars like the Mustang GT, GTO, and PT cruiser are fools. Do they not realize the depreciation is going to be insaine?

Imagine buying a GTO 10 months ago, for $4000 over MSPR only to find out now you can get one for $26K LOL.

Do up front rebates from the manufactorer help stop the gouging? Should the '05 GTO get a $1000 rebate from day 1?

 

I have a personal acquaintance here in NC that tops your "greatest one"...

A local Ford Dealership won a Ford GT delivery in the lottery process for 2004.
A "wealthy" local guy who is into $.5-million-and-up exotics wanted a GT to drive and play with, and put out feelers inside Ford.
He found out about the local dealership's lottery pick, and approached them to buy it.
He got it... for a cool $90,000 above MSRP.
Don't know if you can call that dealer mark-up or not given the special case, but $90k above MSRP is stout IMO.

I can only dream of having more money than sense.

On the up-side, I am invited to a private session after he receives it next month.
This guy bought a large tract of farm land near High Rock Lake, and had a .75-mile road course built on it for him to "play" on (just like the cornfield commercial). If he's in a good mood, I may actually get to drive it in an aggressive mode for a while without fear of a ticket or jailtime!

 

Markups on the Mustang is not that common. I have looked at them in MD, VA, and NC with NO markups at all. A dealership I was at the other day on RT 50 in Fairfax, VA har 4 GT's and they were all markeds as MSRP. Even then, they are willing to deal. You can get them for a few hundred over invoice.

 

I think the answer is this: supply and demand.

If you want the manufacturers to have control over it, you'd have to change the laws that prevent the manufacturers from owning/controlling the dealers outright. I'm not sure exactly how much influence they CAN exert (legally), but remember that the dealers are independent businesses, not extensions of the automakers.

I know the automakers can exert some influence (like not awarding Hummer dealer contracts unless the dealer agrees to build the dealership building a certain way, include the offroad course, etc.), so one might think that the automakers might try to include "no gouging" in their dealer contracts. But I'm sure that pricing is handled in the same anti-trust (or whatever the "reasoning") laws that prevent the dealers from being the retailers in the first place. *shrug*

 

*note to self: NEVER buy a car from California*