Buyers are paying ‘well above sticker’

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Forget getting a deal; these days, anyone in the market for a new car could pay thousands over the sticker price before they drive off the lot.

Limited inventory due to a persistent shortage of computer chips, along with other supply-chain challenges, helped propel new car prices up 10% from a year ago, according to the latest data from the U.S. Bureau of Labor Statistics.

For new cars, the average transaction price reached an estimated $46,259 in August — the highest on record, a separate J.D. Power/LMC forecast found.

And now, as demand continues to exceed supply, dealers are even charging a premium over the manufacturer’s suggested retail price on new vehicles, according to car shopping site iSeeCars.

“Consumers are willing to pay well above sticker price for new cars because inventory is so scarce and because they know that new car pricing is not expected to improve until 2023 at the earliest,” said Karl Brauer, iSeeCars’ executive analyst.

Some cars are marked up as much as 24%

New Jeeps on display at a New York City car dealership on Oct. 5, 2021.

Spencer Platt | Getty Images

“The market is pretty brutal in terms of pricing,” said Brauer.

The average new vehicle is priced 10% above the sticker price, the recent iSeeCars analysis of 1.9 million new car listings found — with some sought-after models marked up much more.  

The vehicle with the greatest markup was the Jeep Wrangler, which is currently selling for 24% over the MSRP, or roughly $8,433 more than retail, iSeeCars found.

Several in-demand luxury SUVs are also going for at least 20% over sticker, including the Porsche Macan, Genesis GV70 and Lexus RX.

“These are vehicles people buy because they want to have fun on the weekends and they’re less impacted by rising prices,” Brauer said.

However, “if you are in a position that you need a car to serve your basic needs,” Brauer advises car shoppers to “research and compare prices between multiple dealers,” even if they are far away, “and, in some cases, [shoppers] can avoid markups by ordering directly from the manufacturer.”

Auto loan costs are also higher

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