Price Gougers: The New Car Brands Being Marked Up the Most

Price Gougers: The New Car Brands Being Marked Up the Most

Price Gougers: The New Car Brands Being Marked Up the Most

Inventory shortages of key components such as computer chips has the entire automotive industry on skates right now, and limited supply is putting pressure on automakers in the face of huge buyer demand. Some brand dealerships are taking advantage of low vehicle inventory and marking up prices, and automakers are shifting what resources they have to building more profitable—read: more expensive—trim levels and models, driving prices upward and leaving budget shoppers in the lurch. Edmunds has collected car buying data from January on the best and worst offending brands, with Cadillac, Land Rover and Kia—or, more accurately, their dealers—gouging the most.

The Worst Offenders

Cadillac was far and away the worst last month, when it comes to how much customer's actually paid for their new Caddy over its listed MSRP. According to Edmunds, Cadillac buyers spent more than $4,000 over MSRP on average. That severe markup was nearly two grand higher than the next-worst offender, Land Rover, with an average Actual Transaction Price (ATP) coming to over $2,500 over MSRP on average last month. That's not exactly unexpected, but what's surprising is who came in third.

Kias are in high demand, and its dealers are taking full advantage. It was the third automaker on the list of markup offenders, with an average ATP $2,289 higher than average MSRP in January. Genesis was 6th on Edmunds markup list, at $1,600 over MSRP on average, and Hyundai was the eighth-worst listed offender at $1,500 above MSRP on average.

The Korean auto group's expansive lineups, inspired and bold new styling, and its onslaught of new or updated vehicles for this year give it a strong hold over market demand, which it will likely keep until supply chain issues stabilize. So, it may be awhile before you find a good deal on a Kia or Hyundai again.

Who Had The Deals?

Edmunds' list of data also showed the best brands for shoppers underpaying, where the Actual Transaction Price was lower than the car's listed MSRP. The winners from January include Alfa Romeo, which seems to be begging people to buy its aging, small lineup of cars, selling an average $3,421 under MSRP. That's certainly an anomaly, a bad sign for the brand's profitability, and pretty much three grand more severe than any other automaker last month.

The smaller, but very welcome deals came from Volvo, averaging an ATP $869 under MSRP, Lincoln at $510 under MSRP, Ram at $465 under, and BMW and Mini averaging small $200 and $150 under average MSRP, respectively. That's not a lot of money on the hood for the customer, save for Alfa, but it's still quite a significant deal when you compare BMW's numbers to, say, Cadillac's intense markups.

If you're buying luxury, maybe look at BMWs first this month. Ram was also the only brand with a full-size pickup on sale that came in under average MSRP, so look for truck deals there, and Mini has that new SE electric car that also comes with the full government EV tax credits, if you just need a city cruiser. Check out our best car buying tips on understanding MSRP and how to negotiate a good deal. Here's Edmunds full list of data:

MSRP vs ATP by Vehicle Make for January 2022

  • Cadillac: $4,048
  • Land Rover: $2,565
  • Kia: $2,289
  • Porsche: $1,721
  • Acura: $1,701
  • Genesis: $1,603
  • Honda: $1,508
  • Hyundai: $1,498
  • Audi: $1,325
  • Jaguar:$1,109
  • Toyota: $1,015
  • Nissan: $904
  • Infiniti: $820
  • Dodge: $729
  • Mercedes-Benz: $719
  • Fiat: $718
  • GMC: $677
  • Chevrolet: $625
  • Subaru: $592
  • Chrysler: $460
  • Volkswagen: $428
  • Jeep: $353
  • Mazda: $312
  • Lexus: $235
  • Mitsubishi: $207
  • Ford: $163
  • Buick: $17
  • Mini: -$151
  • BMW: -$199
  • Ram: -$465
  • Lincoln: -$510
  • Volvo: -$869
  • Alfa Romeo: -$3,421

The industry average MSRP is now up to a whopping $44,989 according to Edmunds, and industry average ATP is above that, at $45,717. That leaves the industry average markup at $728 over MSRP, which isn't a lot of money compared to the average MSRP, but it's still more than you should be paying.

Take a good look at the list if you're planning on shopping for a new car, and do your best to stick to the lower half. You may or may not like a Volvo better than an Audi, or a Ram better than a Ford, but you probably like saving hundreds of dollars more than anything. And be on the lookout for dealers who are charging thousands above MSRP—if you can wait to buy a new car, or can shop around dealers farther afield, we suggest giving that a shot to avoid overpaying for a new car in the near future.

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