Thanks to the COVID-19 pandemic, there has been a supply shortage in auto parts for months and months now. What it has done is left is a gaping hole at dealerships, usually filled to the brim with ready-to-sell vehicles. But that doesn’t mean the demand for new cars has gone.
In fact, as the pandemic is waning, people are looking to buy new vehicles en masse, it seems. And yet nowhere seems to be able to supply them, at least not like they used to.
But that’s only scratching the surface of the crisis auto customers are currently facing.
As it turns out, even if you are able to find a new vehicle that you like and is available, it may be far out of your price range. And I mean far.
As the New York Post reported on Sunday, some customers are seeing markups on vehicles of over $15,000.
Take customers of the All American Ford dealership in Old Bridge, New Jersey, for example. Here, the Post reported a new 2021 Ford Bronco being sold for $49,855 last week. However, it is noted that the MSRP or recommended retail value of such a vehicle is only $34,855. This means that the dealership is charging $15,000 or 43 percent as a “market adjustment.”
Similarly, the same dealership was trying to sell another 2021 Ford Bronco, this one in the shade of olive green, for a whopping $62,970. Again, the MSRP of that exact model is only around $37,790, according to the Post.
The sticker on the car told customers that $15,000 had been added to cover “upgrades” while another $10,000 was due to “market adjustment.” Together, the increases force any willing customer to pay well over 66 percent of what the vehicle is actually worth.
Naturally, more than a few customers are irate about the staggering prices on the stickers, with many calling what the dealership is doing nothing less than price gouging and taking advantage of the hard-working Americans who make the dealership possible.
However, according to the dealership itself, or at least its sales manager, the price increases have nothing to do with trying to make an extra buck off of their customers. Instead, the manager says that they are merely the only option the dealership has left to cover the shortages it has suffered in the past few months and years.
As the manager explained, “We normally have over 100 Ford F-150s on the lot. Right now, we have only five.”
Needless to say, such shortages have cost the dealership greatly, and adding “market adjustments” is pretty much the only way it can afford to stay afloat.
And All American Ford is not the only dealership, either in New Jersey or nationwide, increasing their prices.
Just down the road at Quality Chevrolet in Old Bridge, multiple 2022 Chevy Silverado, and Equinox models were found with ‘market adjustments’ of around $5,000 over the MSRP.
Now, if you have any experience car shopping, you’ll know that you can usually haggle a bit to get a lower price. But right now, employees of dealerships such as All American Ford say that’s just not possible. “nothing is going under sticker anymore,” one employee told the Post.
Initially, you might think this means that dealerships will lose out big time when customers simply can’t pay that amount. But with the supply of such vehicles so low and the demand for them so high, the Post notes that the dealerships now actually have the ability to simply turn down those customers, choosing to wait around for someone who will pay that much.
But, as you might imagine, this isn’t really helping the situation at all.
The only saving grace for some customers seems to be warnings recently put out by auto manufacturers such as General Motors and Ford, who say that dealerships who charge more than sticker price will be cut off from future inventory.
Of course, with less inventory and no option to up prices, dealerships are left between choosing to close up shop or having their supplies cut off.
As one customer says, the whole thing isn’t looking too good. “We are going to be like Cuba soon. No new cars and we’ll all be driving ’57 Chevys.”