How are dealer markups affecting brand and dealership loyalty?

While inflation is widely in effect across the country, dealerships have continued to mark up vehicle prices beyond the recommended MSRPs. In May this year, 80% of consumers paid at or above MSRP. This is causing a decline in the relationship between consumers and dealerships. 

In fact, 31% of consumers who paid above MSRP would not recommend the dealership they worked with to others, according to new data from the GfK AutoMobility analysis. While dealerships are concerned with their own costs, they will likely encounter long-term consequences for such high prices, like damaged consumer relationships with auto brands.

Julie Kenar, Senior Vice President of GfK, remarked, “I think what dealerships need to do is realize that they’re forgoing a long-term relationship with customers when they charge over the MSRP. Consumers can tell which dealers are in it for the long term versus the short term. I really think that it’s incumbent upon the dealers to take that long-term view as opposed to just taking their money and likely never seeing them again.”

Looking specifically at auto brands, of the consumers that were surveyed, 27% said that they would not purchase the same brand again, and 23% reported a negative view of the brand following their experience paying above MSRP.

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