Quote:
Originally Posted by rps1m
So far, this whole dealer markup phenomenon seems to be relegated to the west coast.
|
More like specific to the part of the country where there is a lot of people with a lot of $ and IMHO a side-effect of this allocation scheme. There are probably some of those dealers in other parts of the country that are going to get one allocation and have no waiting list for it that will sell it at MSRP or less. While in CA (for example) there is a much higher
density of people looking to buy one and the dealers probably have a waiting list twice the size of their allocation (or at the very least have received a lot of inquiries about the car know they will get only 2 to maybe 4 cars max) and therefore figure out they will be able to sell them with a markup.
I think the dealers (at least the sales managers) already know how many cars they will get for the year (though they may not know exactly when they will get them) and since they will get so few of them they are not taking much of a risk by asking initially for a large markup, if the car does not sale at that markup, it's OK! You just display it in your store window and let the average customer drool on it/dream they could afford it, it's like a billboard rather than gathering dust in a parking spot in the back of the lot. If someone bites at that price, great they make extra $, if no-one buys it at that price after 2-3 months then maybe you'll sell it for no markup, but in the mean time you're sitting pretty with the knowledge that you will sell that car in the end, you have the upper hand and there's nothing the customer can do about it...