Car demand in the United States is at extraordinary levels. Unfortunately, car supply is extremely low. A primary reason the appetite for new cars is so high is the pent-up demand from the COVID-19 pandemic, when many people could not go to dealers at all.
People who wanted to buy 2021 models found themselves out of luck in many cases. In other cases, they had to pay considerably above the manufacturer suggested retail price — and the car that dealers overcharge the most is the Jeep Wrangler.
Supply of cars has been primarily affected by a lack of the semiconductors used in car electronic and navigation systems. This shortage is not expected to end this year. It has triggered the shuttering of assembly lines at some of the largest manufacturers. It also has made a large dent in car company earnings.
One way car sales are measured is “days on dealer lot.” The figure is usually close to 60. According to iSeeCars, the average days on the lot dropped to 25 in October. This has triggered an unfortunate trend for many buyers. (These are the fastest selling cars in America right now.)
At the time, iSeeCars noted, “Car buyers are willing to pay over MSRP for new cars and highly-elevated used car prices because they have embraced the reality that inventory shortages are here to stay for the next several months.”
A newly released iSeeCars study covers the new car models that were sold by the largest percentage over the manufacturer’s retail prices, a practice that infuriates consumers and causes complaints. The position dealers take is that people can either pay the premium or someone else will.
At least 20 models sold for 19% or more over the manufacturer’s suggested retail price in October. The highest figure was for the Jeep Wrangler at 28.6% above the MSRP, which increased the price by over $10,000 to an average of $43,338. The Wrangler is Jeep’s midsized, and usually relatively inexpensive, sport utility vehicle. (This car brand has the worst dealers in America.)
The Wrangler usually gets good rankings from the car media. Car and Driver rates it 7.5 out of 10, and Motor Trend rates it 8.6 out of 10.
24/7 Wall St. reviewed iSeeCars study about which models dealers overcharge for the most.
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