A New Brand of Sticker Shock Hits the Car Market

THE WALL STREET JOURNAL:

How hard is it to buy a car today? For Kevin Peters, it recently involved a one-way flight and 330-mile road trip to avoid overpaying for a new truck.

Mr. Peters initially spent three weeks shopping around San Diego for a new F-150 Lariat pickup, only to encounter extra charges of $5,000 to $8,000 above the suggested retail price. He decided to fly to a dealership in Las Vegas, where he got what is considered a bargain: He paid the sticker price of $73,520.

“The rules have changed so dramatically,” he said. “Despite being armed with information, the dealer’s position is ‘This is kind of a take-it-or-leave-it proposition.’ ”

Pandemic-related supply chain problems are stretching the new-vehicle shortage into a second year, with near-empty dealer lots, sky-high prices and months long waits for new wheels. The prolonged disruption is now exposing fault lines in the car business’s century-old retailing model and prompting a broader rethinking of the entrenched way Americans buy cars.

Consumers are revolting. Like Mr. Peters, many are expanding their searches outside their hometowns and even across state lines. Some are banding together online to call out dealers charging the biggest markups. Others have taken their concerns directly to automotive CEOs via personal letters.

Car companies say they don’t want dealers charging above sticker and in some cases are pushing back, but dealerships are independent businesses that control the final transaction.

Many dealers say they must make do with their scant vehicle supplies and be realistic about what the market will bear, especially for high-demand models. In extreme cases, dealerships are charging $35,000 to $40,000 above the manufacturer’s suggested retail price, or MSRP, on luxury cars that normally sell for $80,000 or more.

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