We have covered many topics regarding this new phenomenon of dealerships of almost all companies marking up their newest stock of inventory because it’s an “issue with the economy.” We have listed reasons, excuses, amounts, and percentages all dealing with the greedy dealerships. As a short recap, a dealership makes money not by marking up the price of the car, but by the percentage of cars it sells. Think of it like an incentive program, the more cars you sell, the more money you make from the manufacturer. At the time of that article being researched, most dealerships were getting about 2% of the value of the car they sold. This number fluctuates depending on the MSRP of the car.
However, by law, they can mark up their prices as much as they want and because of the supply and demand law, it’ll work. If I am the only person selling water but the rate at which I get a supply of water is slow, then I have the ability to raise prices and still see sales growth. The only way we as buyers can really combat this is by simply not buying a new car for the next year and a half to two years.
Now here’s where things get interesting. Some reports have suggested a steady decrease in dealer markups on popular brand-new vehicles. We are seeing this unfold right now with the 2023 Toyota RAV4 Hybrid, the 2023 Tundra, and the 2023 Tacoma. Now we are starting to see more reports of the new 2023 Toyota Sequoia being marked up with horrendous numbers.
On Facebook’s 2023 Toyota Sequoia group, Dewey Rebouche posted, “Every dealership adds 20k to a 23 Sequoia! We flew to Mississippi to get ours. No wait, no extra money added from dealer.” This is very surprising considering that the top trim of a Sequoia is only 80-90k. If the math checks out, dealers are adding an additional 25% “market adjustment” to these cars and selling them for 100k+. This right here is pure robbery. Taking advantage of a loophole and getting used to it. I am a capitalist at the heart but greed is where you cross the line and what these dealerships are doing is textbook corporate greed.
Granted, not all dealerships charge that insane amount. Due to a decrease in sales because of the economy, its understandable to see a little bit of a markup. I was driving by a prominent Mercedes dealership earlier and they had the new EQ-S with a sticker of 70k over MSRP.
Don’t expect to see this decrease anytime soon. Unless the large mass of consumers can get together and pledge to not buy a brand new car for the next 2 years, we’ll start to see less and less dealerships mark up prices. The only other way this will stop is if legislation is passed to cap off the automotive dealer add-on. I am not for that because I don’t like government intervention within the marketplace, it’s how things got messed up in the first place.
What do you think? Did you buy your 2023 Toyota Sequoia above MSRP? Let us know in the comments Below.
Harutiun Hareyan is reporting Toyota news at Torque News. His automotive interests and vast experience test-riding new cars give his stories a sense of authenticity and unique insights. Follow Harutiun on Twitter at @HareyanHarutiun and on YouTube at Toyota Time for daily Toyota news.