- Topmarq Dealer Weekly
- Posts
- Volume 01, Edition 5
Good morning,
Welcome to Topmarq Dealer Weekly, your snapshot of industry news and happenings. This week, we look at some curious used car numbers and dive into the mind of car shoppers. Learn why one dealer got hit with an eight-figure fine and how markups draw attention.
Reach out and let us know how we’re doing.
Cheers!
Market at a Glance
More of the same old stuff for used cars, but…
A small bump for Acura and Tesla
Lexus numbers take a nosedive
Once again, we visit cargurus.com to check out the world of used car prices. With a few notable exceptions (read on for eye-opening data), it’s mostly status quo. The average transaction price is $30,651 (up by $339 from two weeks ago), with the weekly average increasing by just 0.25% (a 31.11% jump year-over-year). Yep, Nothing exciting when you look at the averages.
And while a few brands saw upticks in used car prices over the past month (Acura up 2.15% and Tesla up 2.77%), it’s the data for some pre-owned Lexus models that generates a “what the…” moment. Over this period, the average transaction amount for a used Lexus dropped by a puzzling 18.35%.
Leading the way downward are second-hand Lexus sedans. Hang on for a wild ride: LS -57.94%, GS -41.97%, ES -19.34%, and IS -17.34%. But even the vaunted Lexus SUVs have taken a hit: the LX is down 38.47%, and the RX drops by 26.44%. Perhaps there’s something wrong with the data, but this decline across multiple models is a head-scratcher.
What Car Buyers Are Thinking
It’s restating the obvious, but car shopping has radically changed over the past two years. And a recent study from Cox Automotive explores what is on the minds of today’s car buyers.
“Like the pandemic, the chip shortage is triggering permanent changes in how consumers shop for and purchase vehicles,” remarks Cox’s Vanessa Ton. “Ordering a vehicle and waiting weeks for it was nearly unheard of in the U.S. before the chip shortage. Now ordering a vehicle from a dealer is more top-of-mind for consumers and they expect it to be commonplace in the future.”
The research reveals:
About one-third of car buyers are willing to order a vehicle and wait up to ten weeks for delivery.
About half (45%) of consumers are postponing a vehicle purchase due to current market conditions.
Most car shoppers anticipate supply chain problems to last more than six months, and a third expect dealer inventory issues to extend for more than a year.
A Dealer Behaving Badly
Whoever said there’s no such thing as bad publicity probably wasn’t facing the wrong side of a multi-million dollar legal action. Ed Napleton Automotive, an Illinois-based dealership group with 51 stores in eight states, settled with the U.S. Federal Trade Commission and Illinois Attorney General over deceptive pricing practices and discrimination charges.
The $10 million settlement alleges that Napleton tacked on expensive add-ons to deals without advising buyers. The action also claimed that the dealer group discriminated against Black customers by imposing higher fees than what was charged to white clients.
Did Your Dealership Make This List?
Crowdsourcing has helped solve crimes and locate missing people, but some cars dealers may not appreciate the practice as markups.org gains traction. The website uses consumer-supplied information and web-scraped data to track dealer markups beyond MSRP. The site launched about a year ago to follow Toyota truck pricing but quickly expanded to cover many makes and models. Reports include information on some zero-markup dealerships. Media coverage via Jalopnik, The Drive, and other outlets is bringing more traffic to the effort.
markups.org
Speaking of Markups…
A recent report from iseecars.com calls out new autos with the highest markups. The scrub of 1.2 million listings reveals the typical asking price for a new vehicle is 9.9% above MSRP, with the Jeep Wrangler (26.7% / $8,925 markup above MSRP) leading the pack. Other standouts include:
iseecars.com