Non-Tesla Dealers marking up car prices

[Rovin]

On another topic looks like people are getting absurd quotes from dealers regarding their electric cars preorders and the companies are not doing anything to stop them because of strong laws protecting the stealership…My bmw lease is up and after all these horror stories I am staying away from the stealerships..Looks like the companies are not learning from Tesla’s success

 

[daniel]

There's a long history of dealerships pricing their cars according to supply and demand. A car in abundant supply will get marked down from MSRP and a car in short supply will get marked up. In addition, you have to negotiate the price and that favors people who are skilled at that. When the 2004 Prius first came out some dealerships were charging several thousand dollars over MSRP, and people were paying. Dealerships have no incentive to price cars below what people will pay.

If a popular car maker offers an EV but only makes a handful of them, they will fetch premium prices. I think Saturn started out with a fixed price and no bargaining or up-charging. Don't remember what became of that. When the Leaf first came out, Nissan gave the allocation to the buyers, and allowed the buyer to select their preferred dealership, which gave an advantage to the buyer. (But then messed up the roll-out so badly, losing orders and changing allocations, that some people who ordered at the very beginning were still waiting months after much later orders had been filled. At least it was an attempt to reduce up-charging.)

It's all just capitalism 101. Fortunately for us, Teslas are far and away the best cars on the road, and are electric, and are sold at a fixed price. The down-side is service.

 

[glide]

On another topic looks like people are getting absurd quotes from dealers regarding their electric cars preorders and the companies are not doing anything to stop them because of strong laws protecting the stealership…My bmw lease is up and after all these horror stories I am staying away from the stealerships..Looks like the companies are not learning from Tesla’s success

Maybe you haven’t been paying attention but Tesla is also increasing their prices.

Maybe you also have not taken a basic economics course where supply and demand were discussed.

Hopefully you’re not in the market for anything else (luxury goods, housing, etc) because you will find those principles also apply.

 

[rudholm]

The correct answer when a dealer asks for a "Market Adjustment" is to walk out. If everyone did that, they would stop doing it.

I think the bigger problem with dealers and EVs is that dealers don't want to sell EVs because they don't support their revenue model, which is based largely on their Service Department.

 

[Rovin]

Maybe you haven’t been paying attention but Tesla is also increasing their prices.

Maybe you also have not taken a basic economics course where supply and demand were discussed.

Hopefully you’re not in the market for anything else (luxury goods, housing, etc) because you will find those principles also apply.

Maybe I understand economics...Maybe you should know the Difference that Tesla is indeed increasing prices but the difference here is Ford is not increasing the prices but a dealer is increasing/gouging prices that don't directly benefit Ford...I know there is supply/demand issue but there is a fine line where the price increase should have a limit for a depreciating assets like a car

 

[glide]

Maybe I understand economics...Maybe you should know the Difference that Tesla is indeed increasing prices but the difference here is Ford is not increasing the prices but a dealer is increasing/gouging prices that don't directly benefit Ford...I know there is supply/demand issue but there is a fine line where the price increase should have a limit for a depreciating assets like a car

So now you’re saying cars are depreciating assets? Not according to Elon. A model 3 is really a $1,000,000 robo-taxi in disguise.

 

[Rovin]

So now you’re saying cars are depreciating assets? Not according to Elon. A model 3 is really a $1,000,000 robo-taxi in disguise.

Well it is his opinion but in general cars are a depreciating assets....The FSD is not yet a level-3 autonomous system so being a robo taxi is far far away

 

[daniel]

Maybe I understand economics...Maybe you should know the Difference that Tesla is indeed increasing prices but the difference here is Ford is not increasing the prices but a dealer is increasing/gouging prices that don't directly benefit Ford...I know there is supply/demand issue but there is a fine line where the price increase should have a limit for a depreciating assets like a car

A car dealer is a retailer. In the absence of a contractual agreement with the manufacturer or distributer, a retailer can charge whatever they like for the things they sell. One of the inherent problems with a free-market economy is that people with more money get the scarce commodities and people without money don't. A free market sets prices as sellers adjust their prices to what their customers will pay. The problem is not that some car dealers are scumbags. The problem is the extreme disparities of wealth that allow some people to jump to the head of the line by paying a premium while leaving others without the basic necessities of life.

Car dealers have always set their prices above or below MSRP according to the demand and the negotiating skills of the buyer. This is nothing new. Fixed pricing is one of the things I like about Tesla.

You say: "...the price increase should have a limit for a depreciating assets like a car."

There is a limit: It's what people will pay. If you want the government to set a limit, that's a can of worms. And if you want Ford to impose a limit on its dealerships, well, Ford knows what the dealerships are doing and if they do nothing about it, then they're apparently happy with it. Bottom line: you set the limit on what you will pay. In the case of cars, there are always other cars, and other dealerships. Don't buy from scumbags. I don't. (In around 1986 I was deciding between a Honda and a Toyota. I ended up getting the Honda because the Toyota dealer was an a-hole.)

 

[glide]

A car dealer is a retailer. In the absence of a contractual agreement with the manufacturer or distributer, a retailer can charge whatever they like for the things they sell. One of the inherent problems with a free-market economy is that people with more money get the scarce commodities and people without money don't. A free market sets prices as sellers adjust their prices to what their customers will pay. The problem is not that some car dealers are scumbags. The problem is the extreme disparities of wealth that allow some people to jump to the head of the line by paying a premium while leaving others without the basic necessities of life.

Car dealers have always set their prices above or below MSRP according to the demand and the negotiating skills of the buyer. This is nothing new. Fixed pricing is one of the things I like about Tesla.

You say: "...the price increase should have a limit for a depreciating assets like a car."

There is a limit: It's what people will pay. If you want the government to set a limit, that's a can of worms. And if you want Ford to impose a limit on its dealerships, well, Ford knows what the dealerships are doing and if they do nothing about it, then they're apparently happy with it. Bottom line: you set the limit on what you will pay. In the case of cars, there are always other cars, and other dealerships. Don't buy from scumbags. I don't. (In around 1986 I was deciding between a Honda and a Toyota. I ended up getting the Honda because the Toyota dealer was an a-hole.)

This is the answer. Again, year-one economic principles are still in play.