Insane Survey Claims Most People Would Pay $19,000 Over MSRP
With vehicle prices surging over the last two years, the age of negotiating a price below sticker seems to have ended. Manufacturers are raising their rates to cope with inflation. But they’ve also noticed how much abuse they’ve been willing to endure via dealer markups. You rarely hear someone talking about how much they saved on their new car anymore. Now, the topic of interest is how much financial abuse you managed to avoid before driving it off the lot.
A recent study has suggested that most shoppers may be masochists that revel in economic humiliation. Commissioned by Quantrell Auto Group, the survey asked 3,361 car owners about their last vehicle purchase – learning that 35 percent purchased something they hadn’t planned on. The remaining 65 percent reportedly said they would be willing to spend up to 39 percent over MSRP to get the vehicle they actually wanted.
Car and Driver, which shared the results, noted that this amounted to around $19,000 being added to the price of the typical American automotive purchase by citing that the average new-car price now exceeds $48,000.
Considering that the study was conducted by a dealer network located in Lexington, Kentucky, and has a vested interest in seeing people pay outrageous prices for cars, it would be wise to take in these results with a healthy dose of skepticism. Then again, people have already been paying nonsense prices for the last two years – suggesting that the average consumer may not be all that sharp.
Obviously, these are desperate times and respondents for the survey in question were unlikely to be people that had been bounced out of the market thanks to high vehicle pricing. Reports that the average American household could no longer afford to buy a brand-new car were flourishing in 2017, when the average transaction was around $34,000 and dealer markups weren’t obligatory. At the time, people were outraged that the average cost of a new car has gone up 35 percent in just as many years. But that was a simpler time when few could even imagine the approaching horror.
Though that doesn’t excuse what’s happening today. Anybody paying ridiculous 39-percent markups at this point is either exceptionally weak-willed and foolish or enjoys the kind of discretionary income most people would envy. Hopefully, the people that responded to the survey aren’t actually shelling out that kind of money for a new vehicle and just made the claim by factoring hypothetical dollars they’ve no intention of giving away.
Other than the possibility that people responding to surveys don’t take them all that seriously, there were a few other takeaways from the study. Apparently, people living in Idaho are willing to pay for the largest dealer markups, with respondents suggesting that 71 percent over MSRP would be okay. However, those residing in Rhode Island, West Virginia, and both of the Dakotas said they weren’t all that interested in anything over 11 percent.
Sadly, it’s not obvious what connections can be made from this. North Dakota has a relatively high household income compared to the national average, while West Virginia has one of the lowest. But they both had the same pricing tolerance whereas Idaho is somewhere in the middle and is supposedly loaded up with people who would very nearly pay double the price for a vehicle they wanted.
Maybe the real lesson should be that context matters. After all, the survey didn’t find a bunch of people who actually paid these prices – just ones that claimed they would. However, if you happen to know someone who says they’re willing to entertain obscene prices, you may want to inform them they’re part of the problem between slaps.
[Image: Gretchen Gunda Enger/Shutterstock]
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A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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You know what they say about fools and their money. Unbelievable stupidity in this world.
I just told my Ford dealer they could go F**k themselves over the 5k ADM they wanted for my Bronco order. And that was sith an estimated 12 month delivery time. There's going to be a lot of people buried in their 2021 and 2022 cars for paying over MSRP. When the music stops, the depreciation is going to be mammoth.