Car dealerships are the new Wild West and this has resulted in more than 80% of customers paying over sticker price last month.
While the government doesn’t seem to have the will to act, a number of automakers have been warning dealers about shady practices and large markups.
The latest are Hyundai and Genesis, which told dealers that customers are voicing their “displeasure with certain pricing practices which, if left unchecked, will have a negative impact on the health of our brand.” The letters, obtained by Automotive News, noted these practices include “affixing side stickers with price markups to our vehicles” as well as advertising one price online and then apparently raising it when customers visit the dealership in person.
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The automakers said these tactics have resulted in sale prices “above” and “in some cases way above-MSRP prices.” The brands went onto note this risks damaging their “long-term ability to capture new customers and retain loyal ones.”
Despite the potential for long-term damage, the letters concede dealers are independent businesses that are free to set their own pricing policies as long as they’re “consistent with law and your contractual obligations.” That being said, the brands “cannot stand idly by watching the actions of the aforementioned dealers.”
As a result, dealers that push things too far could be hit with penalties to discourage bad behavior. These are said to include cuts to their advertising benefits and reductions in product allocations.
While it remains to be seen if dealers will heed the warnings, the brands said “We believe that the risk of losing customers and potential future customers far overweighs any short-term gains to be had from what customers describe as unfair pricing.”
That being said, a quick look on Cars.com reveals plenty of markups including a 2022 Hyundai Palisade Calligraphy with an MSRP of $50,730 being listed for $66,728. Another dealer is asking $65,015 for an Ioniq 5 SEL, despite retailing for just $49,400 with optional all-wheel drive.
