QOTW: Dealership Markups. Pure Business or Pure Greed?
Have you ever, or would you ever pay over MSRP on a hot new model like the Ford F-150 Raptor?
When the 2017 Ford F-150 Raptor first went on sale last year, it was a hot model in short supply, causing dealerships to add on the dreaded “dealer markup.” Commonly referred to as ADMs, these are common in the world of limited edition sports cars, but the huge early demand for the newest Raptor also saw big markups over MSRP. Dealerships were charging anywhere from $5,000 to $30,000 over the Raptor’s normal sticker price, making an already pricy truck practically unobtainable.
The automakers frown upon the dealership markup, but they can’t legally prohibit dealers from doing it. In most cases, a new high performance model like the Raptor or the 2015 Shelby GT350R Mustang will carry that big upcharge. Of course, dealerships can do this because in the long run, some consumers are willing and able to pay those bigger prices, and critics of this practice point out that it wouldn’t happen if some consumers didn’t agree to such markups.
That brings us to our “Question of the Week.”
Would you pay a dealer markup for a new Ford vehicle, or have you done so in the past? This doesn’t have to be just the new F-150 Raptor or a Ford truck, but any hot new vehicle in the past which demanded big money on top of the MSRP.