As inflation and supply chain shortages rip through the country under President Joe Biden, the auto industry is approaching crisis mode.
Auto dealers are selling vehicles well above the manufacturer’s suggested retail price to make up for the money lost from inflation and inventory shortages, the New York Post reported Saturday.
One dealership in New Jersey was selling a 2021 Ford Bronco for $49,855 last week. The MSRP was $34,855, meaning the dealership was upcharging with a “market adjustment” of $15,000, or 43 percent, according to the Post.
“We are going to be like Cuba soon,” a customer at All American Ford in Old Bridge told the Post. “No new cars and we’ll all be driving ’57 Chevys.”
The dealership also was selling an olive green 2021 Ford Bronco for a staggering $62,970. That model had an MSRP of $37,790, according to the report.
In a handwritten note on the window sticker, All America Ford said it added $15,000 for upgrades and $10,000 for a “market adjustment.” Added together, those increases come to a 66 percent price increase compared with the MSRP.
As dealerships have adopted the practice of adding large “market adjustments,” many Twitter users have accused them of using a crisis to their advantage.
Some people will take advantage of a crisis to make an extra buck taking advantage of everyday consumers. All American Ford is one of them. Money, money, money, money. https://t.co/ymqTIDJXLy
— Francesco Juve (@FrancescoJuve6) February 12, 2022
This isn’t Market Adjustment. This is price gouging from an Actuall @Cadillac dealership. $30,000 “market adjustment “ people stop paying this craziness. It should be illegal and considered price gouging
— Chante’ Monique (@chantemonique) February 14, 2022
@NCAGO I tried to purchase a new vehicle at a dealership in Charlotte yesterday and they’ve added a $2000 “market adjustment” on top of the MSRP to new vehicles. @JoshStein_ said “it doesn’t matter the type of crisis”. Isn’t the vehicle shortage a crisis? Can something be done?
— Jeff Goddard (@ToxicoloJeff) February 4, 2022
However, a sales manager at All American Ford told the Post that the price increases were not an attempt to make more money but simply a necessary reaction to severe shortages.
“We normally have over 100 Ford F-150s on the lot,” the manager said. “Right now we have only five.”
While other dealers in that area might not have been raising prices quite as much as All American Ford, the Post reported many were adding “market adjustments” to their prices.
At Quality Chevrolet in Old Bridge, reporters found multiple 2022 Chevy Silverado and Equinox models with $5,000 upcharges compared with MSRP.
In addition, the Post reported auto shoppers are losing leverage when it comes to negotiating on prices. Since the demand for new cars is typically higher than the supply, dealerships can turn away buyers until they find one who is willing to pay the listed price.
“Nothing is going under sticker anymore,” an employee of All American Ford told the Post.
According to The Wall Street Journal, Ford and General Motors have warned against dealerships charging more than sticker price. Ford Chief Executive Jim Farley said dealerships who engage in the practice might be cut off from future supplies.
“We have very good knowledge of who they are,” Farley said during a conference call, according to the Journal.
Whether the price increases are a business tactic or just a reaction to shortages, the fact remains that Biden’s failing economy continues to wreak havoc on American industries.
The supply chain and inflation crises have been fueled by his incompetent leadership, and the problems facing the auto industry are the inevitable result.
This article appeared originally on The Western Journal.