Dont Buy These Overpriced Car
What are the most overpriced cars? That’s what we’re gonna find out. It’s no secret that new cars are more expensive now than ever before, and a big part of the insane prices, unfortunately, comes from some dealerships that are price gouging, consumers charging ridiculous markups and add-ons that can sometimes add thousands of dollars to the total price.
Today I’m gonna show you the most overpriced new cars right now that are the toughest ones to get a deal on.
I’m also gonna show you an example of what a terrible dealership deal looks like so that you know what to watch out for.
And I’ll also show you an example of what an amazing deal looks like so that you’ll be fully prepared when dealing with the dealership.
So the first category of cars that are the most overpriced at the moment, according to data from consumer reports and true cars are Toyota hybrids.
Anyone who has shopped for a Toyota Hybrid in the past one to two years would know that they are some of the most difficult vehicles to find brand new and also the most difficult ones to get a decent price on.
Just as one example, according to data from True Cars and Consumer reports, you can expect to pay around 8% over MSRP if you wanna buy a brand new Toyota Prius, which is the equivalent of around $2,200 over MSRP.
And if you wanna buy a Toyota Sienna hybrid, you can expect to pay around 7% over MSRP, which is the equivalent of around $2,900.
Given how difficult it is to buy one of these vehicles, the supply is so limited that in some areas you could be waiting anywhere from several months to over a year long if you wanna order one of these vehicles.
It’s not hard to understand how some dealerships can be charging enormous markups, and it’s not just Toyota Hybrids that are extremely difficult to get a decent price on.
This is also happening with other hybrid models from brands like Hyundai, Kia and also Honda. Buying a hybrid from any one of these brands can be extremely challenging at the moment.
In many cases, you might need to order one and wait several months or even longer. So it could be very challenging to find a dealership that’s not going to overcharge you.
And in some cases it’s not just the hybrid models. In the case of Toyota, it’s also extremely difficult to get a decent price on one of their gas models as well, including the Toyota Corolla, the Toyota Camry, and also the Toyota Corolla cross, which according to the consumer reports and True Cars, data sells for around 6% over MSRP, which is the equivalent of just under $1,800.
Another car brand similar to Toyota, which seems to have very limited supply where dealerships could be charging over MSRP is Kia.
According to the data from consumer reports and true cars, the Kia Telluride, for example, sells for around 7% over MSRP, which is the equivalent of a $2,900 markup.
The Kia Sportage or the Sportage hybrid sells for around 9% over MSRP, the equivalent of around $2,900.
And this is even the case for the Kia Stinger, which because it’s being discontinued, can be in very short supply in some areas with an 11% markup over MSRP, the equivalent of around $4,000.
And this is also true for the Kia Rio, another model that’s going to be discontinued. And as a result, some dealerships are charging over MSRP for them on average around $1,600.
Another category of vehicle that can be extremely overpriced at the moment are sports cars. These include the Toyota Supra, which sell for around 6% over MSRP, the equivalent of around $3,600.
The Toyota GR 86, which sell for around 16% over MSRP, which is the equivalent of around $5,800.
The Nissan Z, another limited production sports car, which sell for around 12% over MSRP, the equivalent of a nearly $5,000 markup.
And finally, there’s the Porsche nine 11, another sports car that’s extremely difficult to get with waiting periods from several months to over a year depending on the version and enormous markups over MSRP as a result.
There’s also one pickup truck that made the list from the consumer reports and TrueCar data for being extremely overpriced. And that truck is the Ford Maverick.
According to the data, because the Maverick is extremely difficult to get and is a very high-demand model, it tends to sell for around 11% over MSRP, which is the equivalent of around a $2,700 markup.
Now in my experience, putting together deals and helping consumers on a daily basis, much of this data is unfortunately very accurate.
It’s the popular high-demand vehicles that have limited supply that are the most challenging ones to find a decent price on, and the ones where you’re the most likely to encounter a dealership that’s charging a markup or charging extra fees or add-ons, these include most hybrids and some plugin hybrids.
Most of the more affordably priced cars, including compact cars and mid-size cars, and also small crossovers and small SUVs.
Now the bigger question is are dealerships even allowed to be doing this in the first place? Well, technically, as long as the dealership is disclosing everything and they advertise the price, that includes all the fees and charges, it is technically allowed.
Some dealerships are required to follow all in price advertising. That means that the price you See advertised by a dealer, whether it’s a vehicle listed on their website or elsewhere or any other form of ad, must include all fees and charges except for the sales tax and licensing.
Any dealership that does not include all fees and charges in their advertised price could be breaking the law and could be investigated.
And it’s really important that any consumer that encounters a dealership that’s trying to charge you a price over the advertised price reports that dealership to ovi.
Now, it’s important to also mention that auto manufacturers are not required to follow all in price advertising, which means that the price that you get from a dealership could be very different from the price that you see on a car manufacturer website.
But dealerships are required to follow all in price advertising. So before you go to a dealership, make sure you take a screenshot or a copy of the ad with you so you know what the price you should be paying is.
Now that we know that some dealerships could be overcharging, let’s take a look at an example of a terrible deal compared to a really good deal so that you know exactly what to watch out for. Let’s start with an example of a really bad deal.
Now I get a lot of example of dealer quotes that come to me from consumers that I deal with, but here’s an example of a really extreme case of what a terrible deal looks like.
Now here we can see that on this price quote from the dealership, we have a sale price of $34,645.
Now that’s the MSRP plus the freight and delivery charge, which should be the price that you’re paying for the vehicle.
But unfortunately, we have a long list of dealer add-ons that dramatically increase that price.
We can see that the dealership is trying to charge almost $2,500 for a rust module, $2,400 for road hazard plus $425 for two year prepaid package.
Not exactly sure what that is, but there it is. We also have further down $75 for wheel locks and $500 for anti-theft etching.
And finally we have $3,375 for map, 84 months, 200,000 kilometers, which I’m assuming is some kind of maintenance plan or extended warranty plan.
And altogether, all of these add-ons add up to just over $9,000, which represents just over 25% of the MSRP, which means that the total price further down after we include the mandatory charges and the sales tax is nearly $50,000 for a a mid-level trim Mazda CX 30, which is an absolutely ridiculous price to pay.
And this highlights why it’s so important to get a proper price quote from a dealership and carefully go over the price breakdown line by line so that you know exactly what the dealership is charging you and whether you know if you’re overpaying or not.
Now let’s take a look at an example of what an actual good deal should look like for the exact same model. Now this is an example of a price quote report that we prepare for all of our car help clients.
Now we have a price breakdown of the MSRP for the exact same vehicle, the Mazda CX 30, and we can see that we have an MSRP of 30,350 plus our mandatory fees, freighted and delivery destination, and an optional package, which was on the other example as well, giving us the same total MSRP of 34,545.
Now this is something that we do only for car help clients. We compare the MSRP to the invoice price, which is the dealer cost, what the dealership pays for this vehicle.
And we can see that the dealership invoice is $32,439, which means that the dealership has a profit margin of around $2,100 on this vehicle.
So we share this with our car help clients to use it as a negotiating tool. So knowing that the dealership has around $2,100 profit on this particular vehicle, you could try and negotiate say around a thousand dollars discount.
That way you’re getting some really good savings, but also leaving a little bit of money on the table.
So the dealership is happy and still making a profit, but it really depends on the vehicle that you’re shopping for and what the supply and demand is like for it.
Now, moving further down, the price breakdown, we can see the mandatory charges. We have a few small levees that are mandatory here in Ontario.
We have our plate and licensing fee of $60 and we’ve also included a rebate, a Mazda rebate for current Mazda owners, which is $500 off the price. Now with that, that brings us a total price of $34,215.
We have none of the add-ons, none of those unnecessary products and extras that were found on the other dealership quote, which means that after we add in our sales tax, we have a total price that’s just over $10,000 lower than the price on the other quote, $10,000 on a vehicle that’s exactly the same.
This is a perfect example of what’s considered a fair deal because you’re only paying the mandatory fees and absolutely nothing else. And even though there’s no discount that’s been negotiated into this price, that’s okay.
At least you know that you’re getting a fair price and you’re not overpaying for the vehicle like you are in the other example. But because we do provide
The consumer with the invoice price, if you wanted to negotiate an additional discount, at least you know how much negotiating ability you have.
As you can probably tell, it can still be a very challenging time to be shopping for a vehicle right now, especially if you wanna buy one of the types of vehicles that was mentioned Already that still have very limited supply and you can still encounter dealerships attempting to overcharge. But hopefully things will improve in the future, but only time will tell.