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Markups Might Be A Thing Of The Past!

23712 Views 102 Replies 37 Participants Last post by  TakesTheWheel
This is good news for consumers and bad for dealerships. Hyundai will instruct dealers to stop markups on their new products. Kia will most likely follow suit and stop with this nonsense.

Article for more info: Hyundai Is Latest Automaker Fed Up With Ridiculous Dealership Markups
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I like the dealer markups because it increases resale price. It is a good deal for those of us that paid MSRP... I am also wondering if this really applies to Kia which is run independent of Hyundai Genesis.
I like the dealer markups because it increases resale price. It is a good deal for those of us that paid MSRP...
Sure, if you're selling now. But I expect these mark-ups to be a very short-term issue, whether Kia steps in, or not. The current pricing is driven by the supply chain issues and pent-up demand. As those forces ease, (and they're predicted to this year), prices should start to come down. By the end of the year, there will be new options in this category from Toyota, Subaru, Nissan, Audi, and Genesis, plus the '23 EV6 & I5 models will be coming out. The competitive landscape is probably going to look MUCH different within a year. It will be sad to be someone who paid a mark-up.
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No not rea
I like the dealer markups because it increases resale price. It is a good deal for those of us that paid MSRP... I am also wondering if this really applies to Kia which is run independent of Hyundai Genesis.
I don't think so. The car market has been turned upside down in just one year. This time last year dealerships were discounting off MSRP on nearly every sale, now 80% of dealerships of all manufacturers are charging markups. Once supply increases its going to settle back down. And that $57,000 car you just paid $75,000 for a year ago is going to be depreciated down to a value below $50,000 or less. You are also paying interest and taxes on that air they pumped into the deal, along with gap insurance to cover the delta between loan and value (LTV). When you go to sell or trade it 3 or 4 years from now, you are still going to have a big chunk of that $18,000 in air hanging around your neck. The only person who benefits from these dealer mark ups is the owner of the dealerships. That's it. Not you, not me, and certainly not the sales people. I come from the school of thought that its "win-win or no deal", and dealer markups are a one way street. In my NTBHO.
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If this article is accurate, 2022 AWD Kia EV6 Invoice Price, MSRP, and Payment Ranges and invoice price is only around 4-5 bills under msrp, then paying msrp is not so bad. I learned decades ago never to pay msrp-suckers deal. But if this info is true, then I won't feel so bad.
The idea of the a good deal is to let the dealership make just enough profit and not a penny more to stay in business. To do this, you need to know the invoice price, the holdback amount and the advertising allowance. Then add like $500 to dealer's real cost and see if you can buy the car. Then, and only then did you get a great deal. For example of the MSRP is $50,000, the invoice is $49,000, the holdback is $2,500 and the advertising is $1,300, then the vehicle cost the dealership $45,200 and a good deal is $45,700.
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Those prices must include destination charges. If so, they seem similar to what a Kia salesman posted on facebook (below). Of course, he was posting this as "proof" that they don't make hardly any money @ MSRP, to justify mark-ups. As if we don't know that isn't the only source of their profit. :rolleyes:
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No not rea


I don't think so. The car market has been turned upside down in just one year. This time last year dealerships were discounting off MSRP on nearly every sale, now 80% of dealerships of all manufacturers are charging markups. Once supply increases its going to settle back down. And that $57,000 car you just paid $75,000 for a year ago is going to be depreciated down to a value below $50,000 or less. You are also paying interest and taxes on that air they pumped into the deal, along with gap insurance to cover the delta between loan and value (LTV). When you go to sell or trade it 3 or 4 years from now, you are still going to have a big chunk of that $18,000 in air hanging around your neck. The only person who benefits from these dealer mark ups is the owner of the dealerships. That's it. Not you, not me, and certainly not the sales people. I come from the school of thought that its "win-win or no deal", and dealer markups are a one way street. In my NTBHO.
It also depends on the vehicle. I bought my Kia Telluride in 2019 prior to Covid and people were paying thousands over MSRP. The reason was that even at MSRP, it was an excellent value. The vehicle was back ordered from the time of launch and people have been waiting as much as 8 months for them. The Telluride never caught up with demand, but it wasn't due to COVID supply chain issues. As they explained to me at the dealership, KIA was relatively unharmed by supply chain issues for the last two years. It is only now starting to catch up with them, so they predict issues through all of 2022 and into 2023. I don't believe that a year from now that EV6 or Telluride will be selling for thousands under MSRP.

MSRP is really an imaginary value. The street price is based on what people pay when they drive off the lot. Years ago I purchased a Chysler minivan. I had done comparison shopping to Honda. They both had the same MSRP, but Chrysler had ridiculous discounting. Honda wouldn't budge off of MSRP. So it isn't MSRP as much as net average people pay to drive them off the lot. This is why dealer markup drives up street value. I paid MSRP and have a $7500 rebate coming, so I am not worried about value in this case.
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Those prices must include destination charges. If so, they seem similar to what a Kia salesman posted on facebook (below). Of course, he was posting this as "proof" that they don't make hardly any money @ MSRP, to justify mark-ups. As if we don't know that isn't the only source of their profit. :rolleyes:
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Here is another site echoing similar numbers...Kia EV6 Markups May Be Unavoidable
Those prices must include destination charges. If so, they seem similar to what a Kia salesman posted on facebook (below). Of course, he was posting this as "proof" that they don't make hardly any money @ MSRP, to justify mark-ups. As if we don't know that isn't the only source of their profit. :rolleyes:
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This is only partially true. Even at invoice the dealer makes money on holdback, floorplan assistance, advertising assistance and any other incentive offered by the mfg.

I just filed a complaint with about 10 attachments on KIA'S website of screenshots of $10,000 markups and conversations via email I've had with dealers. I don't expect a personal response but it has to start somewhere. Vote with your wallet.
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This is only partially true. Even at invoice the dealer makes money on holdback, floorplan assistance, advertising assistance and any other incentive offered by the mfg.

I just filed a complaint with about 10 attachments on KIA'S website of screenshots of $10,000 markups and conversations via email I've had with dealers. I don't expect a personal response but it has to start somewhere. Vote with your wallet.
You have the option is go buy a Chrysler or some other less desirable vehicle. If you are after a first year vehicle of any model, there are not going to be discounts. The more desirable, the less discounts there will be. Why get mad at the dealership? Buy a different car or find a different dealership. The problem is dealerships that don't charge markups don't have cars on the lot, so be prepared to wait.
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This is good news for consumers and bad for dealerships. Hyundai will instruct dealers to stop markups on their new products. Kia will most likely follow suit and stop with this nonsense.

Article for more info: Hyundai Is Latest Automaker Fed Up With Ridiculous Dealership Markups
Hyundai did not, and cannot “instruct dealers to stop markups.” From the letter:

“You are, as an independent business, of course free to adopt any policies, including pricing policies, that are consistent with the law and your contractual obligations.“

Hyundai is concerned about the impact to their brand once the market stabilizes

“Once supply and demand come into greater equilibrium, customers will feel that they were overcharged for their vehicle and thus look to other brands the next time they are shopping. we believe that the risk of losing customers and potential future customers far outweighs and short-term gains to be had from what customers describe as unfair pricing.”
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This is only partially true. Even at invoice the dealer makes money on holdback, floorplan assistance, advertising assistance and any other incentive offered by the mfg.
Right, that was my whole point to him. He thought we were all just dumb consumers who don't know there are multiple paths to their profit.
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Those prices must include destination charges. If so, they seem similar to what a Kia salesman posted on facebook (below). Of course, he was posting this as "proof" that they don't make hardly any money @ MSRP, to justify mark-ups. As if we don't know that isn't the only source of their profit. :rolleyes:
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Was this posted in the Kia EV6 Owners group on Facebook or someplace else?

I believe this matches up with what @MurlinatoR said about the dealer profit on an EV6 matching the Niro or some other lower priced Kia. Of course the invoice price doesn't include the other amounts that @pss mentioned which were holdback and advertising. I actually didn't know that part of the invoice price includes advertising. I had only previously heard of holdback.
Was this posted in the Kia EV6 Owners group on Facebook or someplace else?

I believe this matches up with what @MurlinatoR said about the dealer profit on an EV6 matching the Niro or some other lower priced Kia. Of course the invoice price doesn't include the other amounts that @pss mentioned which were holdback and advertising. I actually didn't know that part of the invoice price includes advertising. I had only previously heard of holdback.
KIA holdback is 3% of invoice.
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When talking sales at MSRP, are people strictly considering MSRP + destination charge OR are some dealer line items (ie handling/prep) also included? Clearly, lines like Dealer Markup, Market Adjustment, or Dealer Profit are not in the MSRP spirit.
Was this posted in the Kia EV6 Owners group on Facebook or someplace else?
Yes, in the Kia EV6 - US Owners Group. See here.
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When talking sales at MSRP, are people strictly considering MSRP + destination charge OR are some dealer line items (ie handling/prep) also included? Clearly, lines like Dealer Markup, Market Adjustment, or Dealer Profit are not in the MSRP spirit.
Personally, I consider an acceptable MSRP purchase to be the car MSRP + destination charge + a reasonable doc fee.
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Was this posted in the Kia EV6 Owners group on Facebook or someplace else?

I believe this matches up with what @MurlinatoR said about the dealer profit on an EV6 matching the Niro or some other lower-priced Kia. Of course, the invoice price doesn't include the other amounts that @pss mentioned which were holdback and advertising. I actually didn't know that part of the invoice price includes advertising. I had only previously heard of holdback.
Why does the customer have to pay an advertising fee? Does the dealer get to write off whatever advertising they do as a business expense?
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