In several cases, people paid more than a 100% markup.
Scandalous dealer markups on in-demand vehicles have become very common over the last few years, but they still sting. That being said, if you’re not the person handing over a lot of money for a desirable car and do not see yourself looking for one of the market’s hottest cars for a long time to come, it can be entertaining to see just how far some have been willing to go to get their hands on something others cannot.
Whether lofty markups are ethically responsible is a matter of one’s perspective, but as long as they continue to be legal, they’re a part of the automotive industry in America. But how did they get so bad?
CarBuzz
The Perfect Storm
The COVID-19 virus created the perfect storm in the new car market, which also had a knock-on effect on the used car market.
First, a semiconductor chip shortage was created by the world going into lockdown. Once the worst was over, the work-from-home model was quickly adopted, creating a massive demand for computers. A snowball effect quickly formed, and chip manufacturers couldn’t keep up. In addition to creating the semiconductor chip shortage, the virus also had a knock-on effect on manufacturing in general, which created other parts shortages. There wasn’t enough time to build a sufficient inventory, so specific manufacturing sectors would always lose out. Then Russia invaded Ukraine, creating more supply challenges due to embargo and air travel restrictions in the region.
These things combined led to a shortage of new cars delivered to dealers.
CarBuzz
Chevrolet
Chevrolet
1. Dodge Demon 170
The Dodge Challenger SRT Demon 170 is the maddest gas-powered model the American automaker has ever produced. To make matters worse, Dodge is done with V8 engines, which means this car represents an end of an era.
Dodge knew there was a potential for ridiculous markups. The MSRP for the Demon 170 is $99,666, and Dodge said that preference would be given to dealers who would sell the car at the suggested price. This approach failed because several allocations went to Dodge dealerships, who advertised allocations on Facebook Marketplace for $200,000 over sticker.
After discovering that people would be willing to pay that, the price in some places quickly jumped by another 50 grand.
This creates a huge problem. People who pay $100k for the Demon 170 would be more likely to take it to the drag strip. But once you’ve spent $350,000 on a car, would you risk it? This car was meant to be enjoyed by audiences at drag strips, but now they’ll be stored in climate-controlled garages.
Dodge
Dodge
