The trend of car dealerships charging over the Manufacturer’s Suggested Retail Price (MSRP) can be attributed to several factors:
- Supply and Demand: This is the most common reason for price hikes. When the demand for a particular model is high, and the supply is low, dealerships may charge more than the MSRP. Customers are sometimes willing to pay the premium to secure the vehicle they want.
- Limited Inventory: Global events can affect the car manufacturing industry. For example, the COVID-19 pandemic and the global shortage of semiconductor chips have significantly affected the auto industry, resulting in reduced production and limited inventory. With fewer cars available, dealerships can and often do charge more.
- Desirable Models or Features: Dealerships may charge over the MSRP for cars with particularly desirable features, models, or editions that are in high demand. For instance, performance models, limited editions, or new models with innovative features may command prices above the MSRP.
- Dealer Add-Ons: Dealerships may also charge more than the MSRP due to add-ons, such as extended warranties, additional accessories, paint protection, and more. While these can add value, they can also significantly increase the price of the vehicle.
- Geographic Location: In some regions or cities, it might be more common for dealerships to charge over the MSRP, especially if the demand for vehicles is high and there’s limited competition among dealerships.
As a consumer, it’s crucial to do your research, understand the market, and be prepared to negotiate or look elsewhere if a dealership is charging over the MSRP. Sometimes, waiting until the supply stabilizes can also lead to more reasonable pricing.