The order books for the 2023 Cadillac LYRIQ are already full, but some dealerships have Debut Editions on sale. While the all-electric SUV has a reasonable starting MSRP of $59,990, consumers are going to have a hard time finding a model at that price when they go shopping for one at a dealership. As GM Authority reports, dealers have already placed a markup on the LYRIQ.
The outlet shares a story about a customer named Melanie that placed a pre-order for a 2023 Cadillac LYRIQ Debut Edition. When Melanie reached out to a dealership in Thousand Oaks, California to inquire about her vehicle, a sales rep from Silver Star Cadillac told her that the dealership would be applying a $5,000 market adjustment fee to her allocation because of “high demand and limited supply.”
“I was able to independently confirm a preorder for Lyriq and was asked to select a dealership,” Melanie said in a post on markups.org. “I had inquired online and was told nothing of this mark-up until they received MY allocation. No way, no how! I don’t suffer fools gladly, especially greedy fools!”
We certainly understand where Melanie is coming from, as dealer markups for vehicles are absurd. But, as far as markups go, this is one of the more modest ones we’ve seen. As GM Authority points out, some reservation holders for the GMC Hummer EV Pickup Edition 1 saw markups as high as $50,000. More recently, we’ve seen markups as high as $26,000 for the Toyota bZ4X. In the modern age of purchasing a new car, markups have become common. Previously, they were only tacked onto exclusive vehicles.
Earlier this January, General Motors warned dealers about applying markups to its vehicles. As the outlet reports, the automaker sent a letter to dealers warning them that they would be “forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity,” of its brands. GM stated that it would reroute future products to other dealers or take “other resources prescribed by the Dealer Sales and Service Agreement.” Based on Melanie’s story, it doesn’t look like dealers care about GM’s idle threats.
As much as we hate dealer markups, they’re perfectly legal, as automakers give dealers the freedom to price the vehicles they sell based on demand. Because of the chip shortage and supply chain issues, dealers are marking up cars as demand for vehicles far outweighs the supply. There’s not a lot consumers can do if they want to avoid paying a dealer markup. They can try to shop around at different dealerships, though that might involve traveling to another state or simply refusing to purchase the vehicle. Some consumers are more than happy to pay the markup, which makes the situation worse for other shoppers.
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