|
Well, markups don't exist unless excess demand exists, so its not bad for the brand because for every customer turned off by high prices, there are tons who are willing to pay the high prices. They wouldn't exist if enough people were against them.
Also, MSRP really doesn't give the dealers enough of a profit margin. The difference between invoice and MSRP can be from a couple hundred dollars to a couple thousand. Out of that, take out overhead costs, salesman commissions, finance commissions, PDI costs, gas costs for test drives, administrative costs, taxes, insurance, and lot fees. And realize that most cars don't even go for MSRP. So you can see dealerships don't actually make profits on new car sales. So the rare occasion when they have a really desirable car that someone is shoving money in their face to buy, they should turn that down and give it to the person who won't even give them enough to meet expenses? That's patently absurd. If profits are outlawed (think rent control) then there will be a huge shortage of Camaros, and then they'll be rationed by under the table means. Either way, if you're looking to get a car where demand exceeds supply, one way or another you'll have to pay to get it. It doesn't matter if markups are illegal or not.
|