Dealership Markups Are Getting Insane
Car buyers and market observers are used to seeing large dealership markups on models that are tough to get — first editions of popular cars, usually, or models that are produced in small numbers, or both.
It’s no shock to see the Ford Bronco or Chevrolet Corvette marked up by thousands of dollars. Motor Trend reported markups of $30K on Broncos, for example. C8 Corvettes are also being marked up like crazy.
While annoying, it’s somewhat understandable, given how the franchise-dealer system works, as well as how basic capitalism and supply and demand work. You don’t have to like the phenomenon, but the logic behind its existence is sound.
Still, we draw the line at an almost $6K markup of a Mitsubishi Mirage.
You read that right. A dealership in Tennessee marked a Mirage — a freakin’ Mitsubishi Mirage — up by nearly $6,000 over its manufacturer suggested retail price (MSRP), charging $24,260 for one after a $5,995 upcharge.
This is a result of the greater issues surrounding the industry right now. Inventories are at historical lows, due in part to the semiconductor chip shortage, and pricing for both new and used cars is all sorts of insane.
Still, it’s a bit jarring to see this kind of markup on a car that’s a) produced in large enough numbers that it is far from “rare” and b) marketed as basic transit to those who either can’t afford much or who simply only want the cheapest car they can get, regardless of income.
The Mirage isn’t in high demand, and it isn’t rare or built in low numbers. So this is either a dealership trying to get as much as it can out of each sale, knowing supply is tight, or a store screwing over low-income consumers, some of whom may have shaky credit, as Jalopnik asserts. Or it’s both.
Either way, it’s another reason to not buy a car in the short term unless you absolutely have to.
[Image: Mitsubishi]
Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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@Lou_BC--What you and Yankee said about the skilled labor shortage and about many of the younger workers is spot on. There are a few younger workers who are really good but it is few. There is an independent garage that I go to that has a couple of long time experienced mechanics but most of the rest come and go. Many of the youth are told to get a college degree but are not steered toward fields that they can get a good paying job with potential for growth. Art History, History, Literature, and other humanities degrees might make a person more knowledgeable and a better informed individual but they do not qualify you for a good job. I have 3 degrees Business Management, Petroleum Land Management, and Accounting and it was the Accounting degree that advanced my career and opened doors for me. When I was younger my goal was to get away from Accounting but after numerous jobs where I was laid off because of downsizing or a bad economy I was able to finally able to get a good job and advance myself because of my Accounting degree and experience. Few jobs are exciting but much of what you do is your attitude. You can find satisfaction in any job.
Fast forward one year since this article was published....and the Mirage hatch is in demand AND they are being sold as fast as they are stocked; the sedan a little less so but still sought after.