I tried to buy a new RS3 when they were announced in the US, didn’t think it would be a big deal. I was a current Audi owner and had years long and multi-car history with the brand. Got all the way through getting approved for a special color and completing the full spec. Told them I was happy with it and was ready to put a deposit down. At that point they told me that they were charging a $10k dealer markup. I told them I wasn’t doing that and they tried to give me all kinds of excuses why they were charging it. I just am not interested in giving away 10 grand. I hit up BMW and told them I’d be interested in an M3 if I could get an exclusive paint slot and I’d pay MSRP. They told me I’d have to wait for the 2023 model year but otherwise they would make it happen. I ended up spending more overall, but I got a bit bigger car with 100 more horsepower and was treated well.
Yeah, Toyota marked me up right into a Tesla. I wanted a RAV4 Prime for my wife as a mommy wagon. They wanted $55,000 for it. A $10,000 markup. I explained to the sales rep that under no circumstances would I pay above sticker for a Toyota and he basically told me to kick rocks. So I did. I went home and ordered a Model Y that same day. It was $60,000 with options (this is before Tesla themselves increased the price on their cars) so it was more than the RAV4, and quite frankly wasn’t our first choice of car, but dammit I am NOT paying a fucking markup on a car that’s clearly going to depreciate. We also went to Volvo to look at a XC60 Recharge and they charged a $6,000 markup. No thanks. I’ll take my Tesla and in 6 or 7 years we can revisit the issue. Fucking crooks.
@@Soh90 $10k on a Toyota is even more insulting! My mom lost her car in Hurricane Ian and she was trying to replace it with just a Honda Accord with a base price of like 30k and they were trying to charge her 15,000 over. So like just adding on an additional 50% to an old woman that had lost her car due to a hurricane. terrible people out there.
@@auralxtc Yes, absolutely terrible. It’s one thing to charge a $15,000 markup on a $150,000 car. Charging 15k over on a $30,000 car is just disrespectful. It shows a lack of integrity and lack of ethics. Hondas, Toyotas, Mazdas etc are supposed to be “affordable” cars that the common man can buy. Therefore to me marking those cars up is unethical. I’m sorry moms lost her car and now has to navigate this treacherous market. I bought all three of my cars in 2021. I feel very fortunate to have made it out unscathed without paying a markup on any. I feel like I just made the cut before it became a plague.
I really hope that dealerships eventually just turn into pickup locations for already purchased vehicles. Where manufacturers sell DIRECTLY to consumers. Eventually if dealers keep this up long enough, we could be seeing a collapse on the new car market, and an explosion on used car market sales.
True, imagine just a straight up website for each manufacturer where you can search a car in the nearest dealership for a car thats in stock for MSRP. Would save soooo much money for us consumers but is it gonna happen? NO.
I don't mind the dealership experience, but its when there's completely unregulated internal processes that allow dealerships that CONTROL the entire flow of vehicle releases artificially lifting prices of cars because people will pay it. It's not something that continue to happen
I think that instead of dealerships being privately owned, they should be owned by the manufacturer and managed by someone. This way, cars can actually be sold at MSRP instead of receiving crazy dealer markups. I still see immense value in dealerships, but not in the way they’re being run right now (the manufacturer pays to have their cars sold at the dealership by a guy who is not associated with the company whatsoever). They could be a lot better if the manufacturer just has complete or at least a majority ownership in the dealership. Hell, I’d be happy if they even just had enough ownership in the dealer to keep the prices at our close to MSRP, cuz we all know the manufacturers don’t like dealer markups the same way we don’t (they deter potential customers from buying new cars)
Then I have no job :( Edit: it is important to note I work at a VW dealership and the largest markup I've ever seen is $5000 on the Golf R and we get 1 of those every 6 months
Not to defend dealers here, but if car dorks are willing to fork over the markup, it would be bad business to leave that money on the table. Blame your fellow "car enthusiasts."
@@erimei8478 bingo there is the winner .. buddy is a dealer owner and he said throughout the Covid pandemic that people were more than happy to pay whatever markup there was
Problem with the dollars per second look is that the quicker a car is, the "higher" the dollars per second will be cuz there are less seconds. Theoretically, a better comparison would be price x time, so the lower the number the better value in terms of speed and pricing. Example: $30k car x 1 min time vs a $40k car x 40 second time. The $40k car has a better value in terms of track time.
Yeah because in $/sec a $40,000 car running 40sec is exactly the same as a $20,000 car running 20sec. Useless metric unless I’m misunderstanding something
@@Cheddarcheese6 we’re all actually on the same page here. Based on the units of your calculation, you are also demonstrating that $/sec is a useless metric. The result of $20k x 0.2 isn’t dollars PER second. It’s dollars TIMES seconds. $20k x 0.2 = $20k x (20 sec / 100). Dividing by 100 isn’t necessary but it doesn’t change the overall result (the cheaper faster car is better). At the end of the day, Alex should have used a calculation more similar to what you did ($ x sec) instead of what he did ($ / sec).
I work for a dealership in Canada, and I do really feel bad for you guys down in the states with all the bullshit markups. The customer service and how they getaway with it is beyond me. Here in Ontario it is against our regulations to markup new cars, so all of them sell at sticker. It’s just the shortage of inventory that’s hurting.
@@SkylineFTW97 That’s what a lot of us Canadians did during the 2008 recession, people bought cars from the US and drove em back cause they were cheaper with the dollar at the time.
@@theninethrees8044 I can imagine anyone in or near a border state will have considered it. I live in Maryland, a few hours from the closest border crossing (probably upstate NY), but if I were buying new and it meant not paying $5-10k in markup, I'll gladly take a day or 2 to make the trip.
These car dealerships need to be put under control this is nuts. The manufacturers need to get a tighter grip on this, or govt needs to remove dealerships as a "necessary" middle man
Car manufacturers cannot control the dealerships due to government oversight, and the dealerships can buy out any politician and stop any law from controlling the dealership
The manufacturers are in on it too. They have "profitability targets" that dealers must hit and get punished for underperforming. Source: I work for corporate
Sorry if someone said this already, but R&T probably couldn't do this because it would hurt their manufacturer relationships. Also why they can't be brutally honest in reviews. Thanks for the video - worthwhile viewing for sure!
Well this video isn’t necessarily true either. If you bought 30 Porsche’s from the same dealer, odds are they’ll give near zero ADM on a GT4RS. I personally know a guy who paid no ADM on a GR Corolla. So R&T would be arbitrarily setting ADM adjustments.
thats why they suck ass. You cant trust auto journalists. Every car they review is "great perfect 5/5!" I cant blame them getting to drive 100k+ cars around while you get basically sucked off by the manufacturers, paying for their day, dinner and hotel etc.
@@garythecyclingnerd6219 the trouble is, that doesn’t represent the general audience, which is what this video is all about. Somebody might want a GT4 RS now even though they’ve never bought a Porsche before, and then find out that they have to pay a lot in mark up. That’s really bad.
@@devandrasimanjuntak1646 Neither test reflects reality 100%: not all people are going to pay ADM, and those who do pay vastly different amounts. Basing this test off calling a few dealers isn’t reflective of reality either. So R&T either makes up ADM numbers on a few calls or uses MSRP. This isn’t a bad video per se, but it’s an impossible task because dealers don’t disclose this data
“Mercedes wouldn’t give me a price” *name drops laguna* Bro I literally knew it, walked in there wanting an AMG and the salesman basically laughed me off the lot. I went across the street to Audi and went on a 45 minute test drive in a brand new s4 (way out of my price range I wanted used) and then he even let me take out a brand new rs6 avant- when he knew I had no right even looking in its direction.
I actually really understand the porsche thing. Half of the time, each dealer is trying to avoid the flippers who come in, buy the car for 2 weeks, and sell it off at insane markups because money isn't real and credit is the key from turning reality into fiction
Unless it was an order that the buyer backed out on, you haven’t been able to get a desirable Porsche from the showroom in years. These days, even base Boxsters and Caymans have to be custom ordered off dealership allocations.
There wouldn’t be flippers if they just produced more cars Porsche specifically does limited units on purpose to create inflated demand causing flippers.
This is the car journalism I love! Someone get this man his own magazine asap Entertaining and critical reviewing of the industry, with a healthy dose of integrity.
Although I see where ypur head is, and I agree. However, a magazine in 2023 is a terrible idea. How about a TV segment or something in that nature. Like a top gear kinda thing would be cool with Dakota and gels. A fun watch for sure
@@AlexMartini. You probably have read this in the comments but you really should've multiplied dollars by seconds. Thus you get the unit of dollarseconds, that way as lap time decreases it reduces the final value, so lowest is the best value This is very related to concept of cost-performance which I basically live my life by, essentially, getting the most bang for your buck
@@AlexMartini. if you have 2 cars that cost the same but one is twice as slow as the other, the slower car gets half the "dollars per second" as the fast one. According to your metric, the slower car is somehow of better value
I went to one of my local honda dealers, and they have a Type R in the showroom that they are selling for $57,000. $10K mark up (which is basically nothing in this market, plus "dealer specials" which has Window Tint, clear bra, etc.
READ THIS! (& sub please) - Sub here - bit.ly/3kXgWr0 | NEW EDIT 3-13-23: I made a part 2 here - th-cam.com/video/2LOQzoNNLEg/w-d-xo.html NEW EDIT 3-4-23 : I'm doing a follow up video + i'm linking a new sheet a subscriber helped me with to measure VALUE PER MPH, it's here: bit.ly/3ycT5Kp Let's talk about the math as I want to provide clarity + dialogue! Assumptions I made: 1. The cars on track are utilizing 100% of their capabilities to achieve their fastest time. As such, the times these cars hit are fixed. 2. Cars on track are required to perform at their top capabilities to fix their performance. No cars can "go slow" to improve their value. (Cost per second would decrease as lap time increases) - Is it perfect math? No, definitely not. But i'm not measuring against a cars value with the metric, i'm attempting to measuring a cars speed against its price. - I'd love to hear your thoughts on this below. Dealerships seem to be getting weird and it's reminding me an awful lot of 2007 housing crisis hahaha
You put time on the wrong side of the fraction. It should have been in average speed. Because you want to minimize time and maximize speed. So price/speed is the metric, not price/time. If you want value it's cost/(thing you want to maximize) not cost/(thing you want to minimize). You want house in terms of cost/(sq ft) because more sq ft is better. More time is not better. More time is worse.
Hey Alex, do you think you could actually post the data you used? If it's a Google sheet or just an excel spreadsheet that people could download that'd be sick. I'd appreciate being able to look at the data you gathered and process it a little differently to get some other interesting insights out of it
@@WeAreChecking I scraped the data: Here's a google sheet docs.google.com/spreadsheets/d/e/2PACX-1vRpFsxZZsCESjFzaqkcNVJ7ro5k3pm_4H2zULKt-gxNywArKwH5LLisRKWtI8v2H0GgQU6Xsg2-tIm8/pubhtml I added in a sort of value index. If you plot raw $/mph it's just a straight line, since doubling the price doesn't really double the speed. A better metric is log($) which correlates pretty well with mph, but then you might as well normalize it between 0 and 1. So it's (x-min(x)) /(max(x)-min(x)) where x is log($)/mph. That's how I determined value.
love the work u put in talking to dealerships sucks please consider remaking some of the video, with the right metric tho bc right now slower cars r scoring higher than faster cars at the same price..
Love the content, and I super appreciate the rest of the video, but you may want to consider pinning a correction. The logic doesn't change with intent or scale, as you go faster, the preferred outcome, the number will always increase.
Great video, however I think the metric of dollar/second seems flawed. For instance if a $40k car ran the track in 1 second, you're telling me it's value is worse than the other cars? I think maybe the slowest car in the test as a baseline and using cost/second faster would make more sense. It would probably give you a better understanding of value.
Using avg lap speed works too. Issue with your method, while way more useful than the one in the video, is it hopes the slowest car is also the cheapest. Otherwise you end up with some negative numbers.
@@jbhumphe negative numbers aren't necessarily bad. In that scenario, instead of paying for shaving seconds, you get paid to shave seconds for those select cars
Yeah, the dollar/second thing doesn’t make any sense. It penalizes cars for being fast, and artificially raises the “dollar amount” because a faster time results in a higher dollar/sec number… I like the investigation he did but he really should just be comparing prices. Having a faster car doesn’t actually raise the price of that car, as implied by his dollar/second analysis. Just to be ridiculous, you could have a Bugatti with a dollar per second value essentially zero if you never finished driving it around the track. It makes no sense, and has nothing to do with actual value.
Needs to be dollars multiplied by seconds, or dollarseconds, that way as lap time decreases it reduces the final value, so lowest is the best value This is very related to concept of cost-performance which I basically live my life by, most bang for your buck
There should be laws against price markups, at this point all we are doing is participating in inflationary and speculative bids masquerading as car sales.
Dealer markups are ruining enthusiast cars. They lower the number of total units sold, hurting the manufacturer. And make the car too expensive to afford, hurting the enthusiast. A car built to a $40k price point Doesn’t have the fit and finish and materials that a $60k car does. So a car that is a value at $40k is sold for $60k the car is viewed as lower quality hurting the reputation of the car and brand. How often are we told “ we don’t make them anymore because they weren’t selling” well maybe they would’ve sold more if you weren’t charging 30% over sticker! There would be so many more enthusiast cars on the road if they sold at msrp. More sold encourages manufacturers to put more money into engineering and building more enthusiast cars. I despise mark ups
I drive an ‘18 Focus ST, and I was saving up to get a GR Corolla (I live in Central California). The cheapest Core edition that I found around this area was $69,000 and others were going for low-mid $70,000s. I had some money saved up and I was willing to pay a couple thousand over sticker price but a $30k markup on a $37k car is just insane. I instead used some of my saved money to get wheels, tires, suspension and a tune on my ST, now making right around 370hp.
I’ve been fighting dealer markups for about 2 years to get my dream car I might finally have a break through soon. But im not going to lie I have damn near cried but I mustered up the strength and walked out the dealership twice in 2 years
Thank you for this real-world look at these cars. These markups are insane. I was fortunate enough to get my FK8 Honda Civic Type R at MSRP and I am never selling that car. These markups during this dumpster fire of an economy do not seem to be sustainable. You are right. Something has to change.
It will.. and just as in 08, the dumbfucks with more money than memory will be upside down on their 600k houses and 70k (but actually 35k) vehicle loans. I honest to god feel the lower and middle classes will suffer near nothing this time. Reason being is that middle and upper management jobs have exploded far in excess of whats sustainable. Meanwhile the "essential" type of jobs (SURPRISE! the "low to un-skilled") are STILL in major demand to the point where even undocumented immigrant laborers are hard to find. This recession is going to fucking clear house of all these worthless yet over the top-compensated jobs and bring sanity back to the car and housing markets. Give a bunch of spoiled people with no real world experience ever having to struggle 6 figure incomes a month out of college and u get our current economy.
@@dr._breens_beard To add to that, throw in a US President who has no concept of how the economy works and how to actually take care of the taxpayers and country he is supposed to be looking out for and you have the mess we are in.
I've been in the market for a ~$100k track car. What has shocked me the most is that the dealership experience is worse than buying a Kia! These salespeople act like they're doing ME a favor because it's not a $500k car. I really don't have the patience for it.
As a time attack racer I absolutely love Lightning Lap. Big nod to you giving props to C&D at the end and attacking the dealerships. You should ask if they will let you on window shop and hangout with them for a bit! See if you can get their opinions on markup that would be interesting.
Thank you for putting the time into this. This is such an important video. The market is absolutely destroyed now- for both new and used cars. Dealerships can charge whatever they want because there are always people rich enough and willing to ignore a markup because they want the hot new thing right now- same goes for magically inflating the value of used cars that were worthless a few years ago because they're "vintage" now. The only people hurt are us regular folks.
This is insane!! 😂 I’ll NEVER pay above MRSP. So far I’ve managed to always pay below… I’d just wait or buy a car less sought after. If a dealer mentions “market adjustment”, I walk out.
This is great if you're buying certain cars, but dealerships are wise to how in demand sports cars are in certain demos, and how few of them manufacturers are making now. If you're just buying an SUV or a family four door, great, do your thing...but since 2020 if you want something that doesn't put you to sleep to drive, the dealerships know what's up and are going to fleece you for it. Sure, you can wait, but they can wait longer, and some sucker is going to pay their markup.
What if you get into a car accident? And you’re forced to buy a car in this market? Are you still paying under MSRP even if the dealer refuses to sell to you?
Textiles make pennies on the dollar to make by slave labor. Cars take millions of dollars of R&D. Whose going to work on these things if you close down dealerships amyway?
@@putrid2529 you don't need car dealerships. you can still have OEM service centers by the manufacturer! but we don't really need car dealerships dictating price of cars etc...
@@putrid2529 Markups are purely for the rats that work in sales. The manufacturer doesn't touch that money and the manufacturer's R&D is as involved as the manufacturer when it comes to dealerships. So with that beings said, go back to your hole- a civic isn't worth 70k.
Even working as a technician at a dealership I only dream of the day they get stripped of the ability to sell. They ruined it for us and don't deserve the privilege anymore.
I'm confused on the math here (I'm probably just dumb) Price divided by time at the track? So wouldn't a 30,000 prius running a half hour be a way better value than a 30,000 car doing a lap in 10 seconds (as an extreme comparison) 30k prius/30 minutes(or 1800 seconds) would be 16.6 dollars per second. Vs a 30k car doing a lap in 10 seconds would be 3000 per second, even though it's a faster car for the same price Again, I'm probably just misunderstanding 2:15 haha If the c8 at 140k ran 158 seconds, like you had an example at, you said about $880. Better value if it ran 300 seconds, it'd only be $466 per second?
The base line of the test is that you're spending X amount of money for Y amounts of second at "full capacity" driving. My assumption is that every car on the track is going as hard as possible and utilizing all its features, power, and technology to make their base time possible. The formula breaks the moment you "casually" drive a car on the track. hope this helps!
@@AlexMartini. It makes no sense at all, less seconds is a good thing. So if I have a $50K car with a lap time of say 180 seconds and another $50K car with a much quicker lap time of say 165 seconds, the slower car has cost of $278 per second whereas the much faster car (for the same money) costs $303 per second. So by your logic the slower car (for the same money) would be the better value? Sorry but it is a completely idiotic reference. It is true that beyond a certain point you end up spend a lot more for smaller and smaller performance gains, cost/performance is typically a diminishing return. Oh and you can't start out doing an analysis looking at costs vs lap times, and then say the GTI is better for "reasons". There are all sorts of intangible aspects of those high priced cars that make them well worth the money to those that can afford them. Once you start doing that your whole analysis goes out the window. Every automaker has some models that are very reliable and others that "fall apart", even Honda and Toyota have had plenty of reliability issues. For example the 1999 to 2005 Buick LeSabre and the Ford Crown Vic are two of the most reliable cars ever made, beating out scores of Honda's and Toyota's, even though Buick and Ford are not known for reliability. The point is you can't look at different models and infer their predicted reliability from a different model. These Hyundais are brand new models with completely different engines, transmissions... Some Hyundai models have been very reliable so... It is to early to say how reliable these cars will be.
In December i was in the market for a new car. Dealers wanted $15k on top of list for the RS3. Im in New Jersey. Ended up settling with a 2023 m340 xdrive with all the msport packages. Very happy!
So love the video and the content on this channel, and sorry if I'm confused, but cost per second (CPS) might not be the best metric, as it shows preferred values for slower cars. So let's say you have a $10 car, and you go around a track in 5 seconds, that'd be a $2 CPS, if you had a $10 car that goes around a track in 1 second that'd be a $10 CPS, despite the faster car being preferred. This means as price and speed increases, the scale gets disproportionately inflated because it costs more to go faster, and as you go faster you are dividing by fewer seconds. A better metric might be cost per second improved. So a baseline of the slowest car (or whatever) then cost per second reduced below that benchmark
I fixed his calculation: docs.google.com/spreadsheets/d/e/2PACX-1vRpFsxZZsCESjFzaqkcNVJ7ro5k3pm_4H2zULKt-gxNywArKwH5LLisRKWtI8v2H0GgQU6Xsg2-tIm8/pubhtml
I love what you’re doing man. This gives the consumer a different perspective on the cost of purchasing. Another twist you can add to this is adding cost of ownership for the first 2 years. You wouldn’t be able to pull data for cars such as the GR corolla but you’d be able to pull data for other cars.
While I know this takes place in the USA and is using American pricing, most of the dealership markups aren’t seen in Canada due to regulations on dealerships that are enforced and have to be followed for new car dealers to keep their franchising with a brand. These are province for province, but most follow a similar system to Ontario, with OMVIC. Would be cool to see this be implemented slowly state-by-state to see its impact on new car sales, whether good or bad.
Hey Alex! I didn't quite get your value per second index. Let's say car A and car B both cost $50k, but car A does the lightning lap in 180 secs whereas car B does it in 200 secs. Car A is obviously the better value because it's faster for the money, but your index gives $277 and $250 respectively, making it look like Car A is more expensive for its performance when it isn't. Am I missing something?
I really like this alternative perspective. Very good work. I know you would agree that current dealer markups values to do equal the same actual selling prices. With the 2023 Honda Civic Type R for example, although many dealers are listening at $15-25K over, most buyers willing to make a reasonable effort to call dealers outside of their area, negotiate, and do the research, will get them at an average of $10K over sticker (or even 5K over sticker). Those paying $15K + for a 2023 Civic Type R are an exception to the average transaction.
Alex, God bless you because you are a saint for this. You are doing God’s work calling out these ridiculous price gouges that these dealerships are making. The amount of time and effort put into this in hopes of making sense of this awful car market mess is greatly appreciated. This market’s climate is so insane it’s hard to imagine a time where it would actually be cost effective to buy new. Poor young broke boys like me and I’m sure a lot of your audience can’t even rationalize spending this much on a car, especially since half of the price tag is just greed trying to squeeze every last penny out of people too young/ignorant to understand how devastating an expense like that could be on your life. Keep up the great work and can’t wait on your next project💪💪
Hyundai falls apart? News to me. My sister had a 2005 Santa Fe and she drove that thing into the ground. Bought it used in like 2010 with 70k miles and she put 300k on it only ever changed the oil. Now she has an Elantra and it’s not giving her any problems
The m240i x drive , m4 csl, c8 zo6 and the gr corolla are my picks but somebody needs to put a dealership markup limit I understand they need to make money but those are insane no wonder most people try to buy used cars so much
First time viewer here. I actually hate C&D, always been more of a R&T guy, but I love your assessment, and your presentation, and your attitude! Why can hardly anyone comprehend that a low powered but good handling and braking car is all you need for fun? Acceleration is boring, momentum is the balls! Keep up the fine work!
I think the American car community needs to engage in grassroots lobbying against dealerships. Call and write your local, state, and federal representatives and tell them this markup process and dealership behavior is anti consumer. The dealers certainly have no problem paying lobbyists on their behalf
You earned my sub with this video! I know people arugment its a supply and demand thing, I get it. But if this is true, you know what, I rather the manufacturers "mark up" all of the prices in the first place. e.g. if a 50K type-r is actually selling at 75k, hell, I rather pay that amount to Honda, so that at least a portion of it can go back to r&d and such, instead of into dealerships pockets. I know its not going to happen though.
I think Car & Driver, and other car news publications, don't want to go into the weeds of car valuations. Some of these cars they tested, are arguably collector pieces that would sit in some collector's garage, and appreciate over time. The story behind a "special" car is way more important than it's actual performance, in today's world of car valuation.
While I agree, I think it's important to understand that the test on performance is based off of dealer value. When an as tested price means literally nothing, then how does a consumer understand the foundation of the testing? That's my only thing with this. Ideally, there should be an added column for this year or adjacent years that evaluate "common dealer markup %" so then consumers see more transparency rather than what I feel is a "clickbait" price. Just my opinion!
@@AlexMartini. I think you're spot on right. It would be more transparent if C&D added an a price as tested vs average Dealer value comparison with this type of test. It just sucks that most of the dealer value, incorporates the type of buyer they're targeting, and current supply & demand conditions.
Used to work at a dealership and quit because of the shady (and illegal) practices done there. Just a heads up for anyone shopping for a car right now, they will say "no mark-ups" but then they'll have a "market adjustment" or a fee with a different name to essentially do the same thing. Also, ask to be sent pics of something particular on the car because they could just be trying to get you on the lot even though the car was "just sold 30min ago", even though this is textbook definition of bait and switch. Pro tip, go at the end of the month because the sales managers will be more willing to cut down the price to get their unit bonuses.
This was a great video! Also, love ya alex, but I dont think you get to have a Ferrari in the garage and claim you're broke lol. It may very well be true, but the 'rarri ownership bars one from saying it out loud. 🤣
THANK YOU for putting this together. I too consume basically all forms of automotive media religiously, and have done so for more than a decade, but these publications are completely tone deaf regarding price. Oftentimes it’ll be a quick anecdote in the video mentioning markups, but it seems like a cop out and disconnected from reality to preach “value” to consumers when REALITY is completely different. Something needs to change here and the first publisher/TH-camr to do it will get major viewership.
This dollar per second metric doesn't really make much sense. A $10 car running 1 second laps gets $10/sec value while a $10 car running 2 second laps gets a $5/sec value. But the first car is better bc its faster for the same price so the higher value of metric is better. But if a $100 car runs one second laps its a $100/sec value vs a $10 car running one second laps at $10/sec then the lower metric value is better because a way cheaper car runs the same lap time as an expensive car. So there's not really anyway to compare which car is better. Good video tho
Have you driven the new GTI? (Not sarcasm genuinely curious to hear your thoughts about it) Part of the reason journalists (not just Car and Driver) have been hard on it is because the interior took a massive step backwards from the last generation, with cheap touch capacitive controls everywhere including the steering wheel that you inevitably touch while driving, starting cruise control or turning on/off driver aids. There are alot of annoyances in the Mk8 that are not present in the Mk7
@@AlexMartini. hey doesnt the cost per second metric penalize cars for being fast? If a car takes forever to get around the track it has a better cost/second than a car that is the same price and is faster around the track
my dude... this was one of the most useful, well thought out "comparisons" in MANY ages. I'd almost read Road and Track and think of it as anything but a series of long winded industry commercials if you were writing for it. As is, R&T is like a commercial that my wallet has ad-blockers for.
I think people forget the jobs created by dealerships so people can have a livelihood. I do think dealerships shouldn’t exist but its very difficult to replace those who worked at the dealerships for 10+ years to find a similar job
Totally agree. I think dealerships need to change though. Margins are healthy when markups werent 50% of the cars total value. This is the same argument from 2008 where Banks got in trouble for lending out more than a house was worth, nowadays its cars and people think that it's okay. I just am not ok with that haha
I think dollars per second doesn't work out. You should multiply price by time and decide by a constant. So if a lower dollars per second is better, you're saying a slower car is better. Deciding by a bigger number gives you a lower answer. So the best is to decide by the same average time per tier and not decide by their individual times.
I was very interested in the VW GolfR Mk8 but found that every dealer I could find had a $10k+ markup over MSRP, so it was $46k+. Decided to see if there were any other AWD performance cars under $60k and discovered the new for 2022 BMW M240i, and found that I could get it fully loaded, for $56k. As a result, there is a BMW 240i xDrive is in my garage right now. The issue with the M240i xDrive is right now is availability, there is a line 3 deep at every dealership waiting on an allotment, but almost all are doing MSRP.
Bought a 3.0 premium manual Supra two weeks ago for MSRP (plus a bs paint protection at 2.5k as the ‘markup’). Also, was on the list for an A91 manual at MSRP from the local dealer and got a call yesterday (passed on the opportunity instead of screwing the next guy on the list). Only 1 out of the four local dealers were doing straight markups and they were at +15k. How many dealers were really getting +25 for a Supra?
The markup on all these hatchbacks like the Corolla and Civic is just insane, taking cars that are honestly just your basic economy car at the end of the day and placing them into the luxury performance car price range.
That's what happens when sports cars, especially manual sports cars, are made in such small quantities compared to SUV's and trucks, especially in America.
I didn't understand the markups until I went to my local Toyota dealership and saw the severe lack of inventory and clients. The supply curve has gotten kicked to the left driving that beautiful equilibrium price up. Then people want cars, pushing that curve to the right, further driving the mark up. Until the fervor wears down and manufacturing is back in order, these mark ups aren't going anywhere.
Dollars per second does not make sense as a measure. Fewer seconds is better, right? But that makes your denominator smaller, so the metric goes up. But if you reduce the price, the metric goes down.
bought a car in 2022 and paid about 5-7k markup. I guess it isn't that bad compared to some of the other stories that I have heard but it left such a bad taste in my mouth that I don't think i wanna ever buy a car from a dealership ever again. I initially "haggled" with the guy down from a 10k markup because I just flat out refused to pay it and was about to walk out. He got it down to a 5k markup but when i went to go sign the papers, i realized that they charged me another 2/3 grand in "paint protection coat" and "alarm". I told them to take it off because I don't want those things but they said "there is no way to take it off because it is already on the car. You have to buy it as is"...... WTF. I needed a car because I drive quite a bit but i felt so ripped off after the whole transaction. I seriously might look into getting a tesla as my next car so that I don't have to deal with the whole fuckery that you are forced to deal with at a dealership
I saw a GR Corolla roll into my work last week. I stopped the guy at lunch and we talked about. He managed to get it without ADM. They had promised him a GR86 but they never got one - so they have him the Corolla allocation.
Picked up a used PP2 mustang gt for 35k. 2:53.8 is what it got on the lightning lap. To think new cars twice that price aren't even below 3 minutes kills my brain.
I've bought 3 new cars during the pandemic all at MSRP. 2021 Jeep Trackhawk, 2022 BMW X3M Comp, and a 2023 Cadillac CT4-V Blackwing. You just need to find an honest dealer group.
These dealer markups are absolutely disgusting and should be criminalized. Markups on mass-produced vehicles should be forbidden and there should be a max markup of 10% on limited production vehicles
It blows my mind as a Canadian that there are no laws down in the states preventing dealer mark-up. It's illegal in Canada to sell a new car over MSRP. That's the whole point of the MSRP....preventing dealer mark-ups and making sure the product is priced fairly across the nation.
yeah but it would be impossible to compare if you dont use a set rule. Like only msrp prices considered because markups can vary wildly from place to place. So it would be even more inaccurate if you dont use a standard
Man, I remember when Car And Driver loved this Alfa Romeo sedan and rated it over an M5 even though it broke down in public after 5000 miles. No one in magazines has to live with a car (long term tests barely are) when rating them. With the exception of Consumer Reports.
I tried to buy a new RS3 when they were announced in the US, didn’t think it would be a big deal. I was a current Audi owner and had years long and multi-car history with the brand. Got all the way through getting approved for a special color and completing the full spec. Told them I was happy with it and was ready to put a deposit down. At that point they told me that they were charging a $10k dealer markup. I told them I wasn’t doing that and they tried to give me all kinds of excuses why they were charging it. I just am not interested in giving away 10 grand.
I hit up BMW and told them I’d be interested in an M3 if I could get an exclusive paint slot and I’d pay MSRP. They told me I’d have to wait for the 2023 model year but otherwise they would make it happen. I ended up spending more overall, but I got a bit bigger car with 100 more horsepower and was treated well.
That’s good tbh I made sure the numbers matched. As well
I may not be the biggest BMW fan but that's good on them for trying to not markup the damn car
Yeah, Toyota marked me up right into a Tesla. I wanted a RAV4 Prime for my wife as a mommy wagon. They wanted $55,000 for it. A $10,000 markup. I explained to the sales rep that under no circumstances would I pay above sticker for a Toyota and he basically told me to kick rocks. So I did. I went home and ordered a Model Y that same day. It was $60,000 with options (this is before Tesla themselves increased the price on their cars) so it was more than the RAV4, and quite frankly wasn’t our first choice of car, but dammit I am NOT paying a fucking markup on a car that’s clearly going to depreciate. We also went to Volvo to look at a XC60 Recharge and they charged a $6,000 markup. No thanks. I’ll take my Tesla and in 6 or 7 years we can revisit the issue. Fucking crooks.
@@Soh90 $10k on a Toyota is even more insulting!
My mom lost her car in Hurricane Ian and she was trying to replace it with just a Honda Accord with a base price of like 30k and they were trying to charge her 15,000 over. So like just adding on an additional 50% to an old woman that had lost her car due to a hurricane. terrible people out there.
@@auralxtc Yes, absolutely terrible. It’s one thing to charge a $15,000 markup on a $150,000 car. Charging 15k over on a $30,000 car is just disrespectful. It shows a lack of integrity and lack of ethics. Hondas, Toyotas, Mazdas etc are supposed to be “affordable” cars that the common man can buy. Therefore to me marking those cars up is unethical. I’m sorry moms lost her car and now has to navigate this treacherous market. I bought all three of my cars in 2021. I feel very fortunate to have made it out unscathed without paying a markup on any. I feel like I just made the cut before it became a plague.
I really hope that dealerships eventually just turn into pickup locations for already purchased vehicles. Where manufacturers sell DIRECTLY to consumers. Eventually if dealers keep this up long enough, we could be seeing a collapse on the new car market, and an explosion on used car market sales.
True, imagine just a straight up website for each manufacturer where you can search a car in the nearest dealership for a car thats in stock for MSRP. Would save soooo much money for us consumers but is it gonna happen? NO.
I don't mind the dealership experience, but its when there's completely unregulated internal processes that allow dealerships that CONTROL the entire flow of vehicle releases artificially lifting prices of cars because people will pay it. It's not something that continue to happen
Doubt it happening. Idiots will pay what they need to pay to play.
That won’t happen cuz there’s so many peoples jobs that depends on that side of any dealership
I think that instead of dealerships being privately owned, they should be owned by the manufacturer and managed by someone. This way, cars can actually be sold at MSRP instead of receiving crazy dealer markups. I still see immense value in dealerships, but not in the way they’re being run right now (the manufacturer pays to have their cars sold at the dealership by a guy who is not associated with the company whatsoever). They could be a lot better if the manufacturer just has complete or at least a majority ownership in the dealership. Hell, I’d be happy if they even just had enough ownership in the dealer to keep the prices at our close to MSRP, cuz we all know the manufacturers don’t like dealer markups the same way we don’t (they deter potential customers from buying new cars)
If a politician wants to earn my heart, they just have to say they want to close all car dealerships
Direct to consumer sites for cars IS the future, that's a promise.
say new we still need used
I'd like to know who actually buys new cars 20k over sticker. Idiots.
Then I have no job :(
Edit: it is important to note I work at a VW dealership and the largest markup I've ever seen is $5000 on the Golf R and we get 1 of those every 6 months
Nah, the used market is already ridiculous and this would make it 10x worse
It’s crazy how dealerships can’t fathom why there looked at as the “bad guys”.
Not to defend dealers here, but if car dorks are willing to fork over the markup, it would be bad business to leave that money on the table. Blame your fellow "car enthusiasts."
They understand, they just can’t admit it.
@@erimei8478 Fair point
Your right. But where are the good guys these days? Everyone is ruthless.
@@erimei8478 bingo there is the winner .. buddy is a dealer owner and he said throughout the Covid pandemic that people were more than happy to pay whatever markup there was
Problem with the dollars per second look is that the quicker a car is, the "higher" the dollars per second will be cuz there are less seconds. Theoretically, a better comparison would be price x time, so the lower the number the better value in terms of speed and pricing. Example: $30k car x 1 min time vs a $40k car x 40 second time. The $40k car has a better value in terms of track time.
Yeah $/sec is useless. Unfortunate since the question he’s asking is interesting and could provide great insight.
Yeah because in $/sec a $40,000 car running 40sec is exactly the same as a $20,000 car running 20sec. Useless metric unless I’m misunderstanding something
@@Cheddarcheese6 we’re all actually on the same page here. Based on the units of your calculation, you are also demonstrating that $/sec is a useless metric. The result of $20k x 0.2 isn’t dollars PER second. It’s dollars TIMES seconds. $20k x 0.2 = $20k x (20 sec / 100). Dividing by 100 isn’t necessary but it doesn’t change the overall result (the cheaper faster car is better). At the end of the day, Alex should have used a calculation more similar to what you did ($ x sec) instead of what he did ($ / sec).
Dollars vs. time is not a linear relation, it’s mostly a diminishing return relation.
Came to say this!!!
I work for a dealership in Canada, and I do really feel bad for you guys down in the states with all the bullshit markups. The customer service and how they getaway with it is beyond me. Here in Ontario it is against our regulations to markup new cars, so all of them sell at sticker. It’s just the shortage of inventory that’s hurting.
People stateside will probably cross the border, buy up there, and drive it back over. 95% of Canadian cars are US legal anyway.
@@SkylineFTW97 That’s what a lot of us Canadians did during the 2008 recession, people bought cars from the US and drove em back cause they were cheaper with the dollar at the time.
@@theninethrees8044 I can imagine anyone in or near a border state will have considered it. I live in Maryland, a few hours from the closest border crossing (probably upstate NY), but if I were buying new and it meant not paying $5-10k in markup, I'll gladly take a day or 2 to make the trip.
@@SkylineFTW97 im in nY and was considering buying a Canadian spec civic si since they're cheaper than USDM and nicer overall too
By restricting mark ups, the inventory disappears and you get shortages. People then buy as many cars as they can, sell them for profit as used car.
These car dealerships need to be put under control this is nuts. The manufacturers need to get a tighter grip on this, or govt needs to remove dealerships as a "necessary" middle man
Car manufacturers cannot control the dealerships due to government oversight, and the dealerships can buy out any politician and stop any law from controlling the dealership
Best part is the whole pt of the necessary middle man was supposedly to prevent exactly what's happening now BECAUSE of the middleman.
Supply and demand, simple economics
The manufacturers are in on it too. They have "profitability targets" that dealers must hit and get punished for underperforming. Source: I work for corporate
Yes. Govt intervention is the answer 🤣. Govt intervention is why dealerships are the only way we can buy cars.
Sorry if someone said this already, but R&T probably couldn't do this because it would hurt their manufacturer relationships. Also why they can't be brutally honest in reviews. Thanks for the video - worthwhile viewing for sure!
Well this video isn’t necessarily true either. If you bought 30 Porsche’s from the same dealer, odds are they’ll give near zero ADM on a GT4RS. I personally know a guy who paid no ADM on a GR Corolla. So R&T would be arbitrarily setting ADM adjustments.
All three of you in this scenario are right
thats why they suck ass. You cant trust auto journalists. Every car they review is "great perfect 5/5!"
I cant blame them getting to drive 100k+ cars around while you get basically sucked off by the manufacturers, paying for their day, dinner and hotel etc.
@@garythecyclingnerd6219 the trouble is, that doesn’t represent the general audience, which is what this video is all about. Somebody might want a GT4 RS now even though they’ve never bought a Porsche before, and then find out that they have to pay a lot in mark up. That’s really bad.
@@devandrasimanjuntak1646 Neither test reflects reality 100%: not all people are going to pay ADM, and those who do pay vastly different amounts. Basing this test off calling a few dealers isn’t reflective of reality either. So R&T either makes up ADM numbers on a few calls or uses MSRP. This isn’t a bad video per se, but it’s an impossible task because dealers don’t disclose this data
“Mercedes wouldn’t give me a price” *name drops laguna*
Bro I literally knew it, walked in there wanting an AMG and the salesman basically laughed me off the lot. I went across the street to Audi and went on a 45 minute test drive in a brand new s4 (way out of my price range I wanted used) and then he even let me take out a brand new rs6 avant- when he knew I had no right even looking in its direction.
Buy did you buy or just waste the poor chaps time? 45 minutes is an awful long time
Much respect to you for doing this research. Dealerships are swamps full of ogre shit.
Thanks bro
That's not being very fair to ogre swamps...
I don't want to hear Shrek's name enter this
SOMEBODY ONCE TOLD ME
@@Andrew_Amos you’re the only one who brought his name into this
I actually really understand the porsche thing. Half of the time, each dealer is trying to avoid the flippers who come in, buy the car for 2 weeks, and sell it off at insane markups because money isn't real and credit is the key from turning reality into fiction
Who buys a new porsche from the showroom? For that price I want to customize the options
Unless it was an order that the buyer backed out on, you haven’t been able to get a desirable Porsche from the showroom in years. These days, even base Boxsters and Caymans have to be custom ordered off dealership allocations.
There wouldn’t be flippers if they just produced more cars Porsche specifically does limited units on purpose to create inflated demand causing flippers.
I not only hate dealerships, I hate the people who bug the cars at the inflated prices
This is the car journalism I love! Someone get this man his own magazine asap
Entertaining and critical reviewing of the industry, with a healthy dose of integrity.
Thanks man! :)
Him, regular car reviews, and ttac are amazing for honesty and integrity.
Although I see where ypur head is, and I agree. However, a magazine in 2023 is a terrible idea. How about a TV segment or something in that nature. Like a top gear kinda thing would be cool with Dakota and gels. A fun watch for sure
@@AlexMartini. You probably have read this in the comments but you really should've multiplied dollars by seconds. Thus you get the unit of dollarseconds, that way as lap time decreases it reduces the final value, so lowest is the best value
This is very related to concept of cost-performance which I basically live my life by, essentially, getting the most bang for your buck
@@AlexMartini. if you have 2 cars that cost the same but one is twice as slow as the other, the slower car gets half the "dollars per second" as the fast one. According to your metric, the slower car is somehow of better value
Honestly dealer markups are the reason I have never bought a new new car.
I won't. I'm too cheap hahahaa
@@AlexMartini. Facts 🤣🤣🤣🤣🤣🤣
it's the reason many people didn't, but thanks to COVID the entire market is even more screwed than it was following cash 4 clunkers.
I went to my local dealer and their type R was going for 44,000 and some change surprisingly!
I went to one of my local honda dealers, and they have a Type R in the showroom that they are selling for $57,000.
$10K mark up (which is basically nothing in this market, plus "dealer specials" which has Window Tint, clear bra, etc.
Where is this?
READ THIS! (& sub please) - Sub here - bit.ly/3kXgWr0 |
NEW EDIT 3-13-23: I made a part 2 here - th-cam.com/video/2LOQzoNNLEg/w-d-xo.html
NEW EDIT 3-4-23 : I'm doing a follow up video + i'm linking a new sheet a subscriber helped me with to measure VALUE PER MPH, it's here: bit.ly/3ycT5Kp
Let's talk about the math as I want to provide clarity + dialogue!
Assumptions I made:
1. The cars on track are utilizing 100% of their capabilities to achieve their fastest time. As such, the times these cars hit are fixed.
2. Cars on track are required to perform at their top capabilities to fix their performance. No cars can "go slow" to improve their value. (Cost per second would decrease as lap time increases)
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Is it perfect math? No, definitely not. But i'm not measuring against a cars value with the metric, i'm attempting to measuring a cars speed against its price.
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I'd love to hear your thoughts on this below. Dealerships seem to be getting weird and it's reminding me an awful lot of 2007 housing crisis hahaha
You put time on the wrong side of the fraction. It should have been in average speed. Because you want to minimize time and maximize speed. So price/speed is the metric, not price/time.
If you want value it's cost/(thing you want to maximize) not cost/(thing you want to minimize). You want house in terms of cost/(sq ft) because more sq ft is better.
More time is not better. More time is worse.
Hey Alex, do you think you could actually post the data you used? If it's a Google sheet or just an excel spreadsheet that people could download that'd be sick. I'd appreciate being able to look at the data you gathered and process it a little differently to get some other interesting insights out of it
@@WeAreChecking I scraped the data: Here's a google sheet docs.google.com/spreadsheets/d/e/2PACX-1vRpFsxZZsCESjFzaqkcNVJ7ro5k3pm_4H2zULKt-gxNywArKwH5LLisRKWtI8v2H0GgQU6Xsg2-tIm8/pubhtml
I added in a sort of value index. If you plot raw $/mph it's just a straight line, since doubling the price doesn't really double the speed. A better metric is log($) which correlates pretty well with mph, but then you might as well normalize it between 0 and 1. So it's (x-min(x)) /(max(x)-min(x)) where x is log($)/mph. That's how I determined value.
love the work u put in
talking to dealerships sucks
please consider remaking some of the video, with the right metric tho bc right now slower cars r scoring higher than faster cars at the same price..
Love the content, and I super appreciate the rest of the video, but you may want to consider pinning a correction. The logic doesn't change with intent or scale, as you go faster, the preferred outcome, the number will always increase.
Great video, however I think the metric of dollar/second seems flawed. For instance if a $40k car ran the track in 1 second, you're telling me it's value is worse than the other cars? I think maybe the slowest car in the test as a baseline and using cost/second faster would make more sense. It would probably give you a better understanding of value.
Using avg lap speed works too. Issue with your method, while way more useful than the one in the video, is it hopes the slowest car is also the cheapest. Otherwise you end up with some negative numbers.
@@jbhumphe negative numbers aren't necessarily bad. In that scenario, instead of paying for shaving seconds, you get paid to shave seconds for those select cars
Yeah, the dollar/second thing doesn’t make any sense. It penalizes cars for being fast, and artificially raises the “dollar amount” because a faster time results in a higher dollar/sec number…
I like the investigation he did but he really should just be comparing prices. Having a faster car doesn’t actually raise the price of that car, as implied by his dollar/second analysis.
Just to be ridiculous, you could have a Bugatti with a dollar per second value essentially zero if you never finished driving it around the track. It makes no sense, and has nothing to do with actual value.
This was bugging me i was glad someone else thought of this
Needs to be dollars multiplied by seconds, or dollarseconds, that way as lap time decreases it reduces the final value, so lowest is the best value
This is very related to concept of cost-performance which I basically live my life by, most bang for your buck
There should be laws against price markups, at this point all we are doing is participating in inflationary and speculative bids masquerading as car sales.
Commenting purely for appreciation of the work you've done alex
Dealer markups are ruining enthusiast cars. They lower the number of total units sold, hurting the manufacturer. And make the car too expensive to afford, hurting the enthusiast. A car built to a $40k price point Doesn’t have the fit and finish and materials that a $60k car does. So a car that is a value at $40k is sold for $60k the car is viewed as lower quality hurting the reputation of the car and brand. How often are we told “ we don’t make them anymore because they weren’t selling” well maybe they would’ve sold more if you weren’t charging 30% over sticker! There would be so many more enthusiast cars on the road if they sold at msrp. More sold encourages manufacturers to put more money into engineering and building more enthusiast cars. I despise mark ups
I drive an ‘18 Focus ST, and I was saving up to get a GR Corolla (I live in Central California). The cheapest Core edition that I found around this area was $69,000 and others were going for low-mid $70,000s. I had some money saved up and I was willing to pay a couple thousand over sticker price but a $30k markup on a $37k car is just insane. I instead used some of my saved money to get wheels, tires, suspension and a tune on my ST, now making right around 370hp.
I’ve been fighting dealer markups for about 2 years to get my dream car I might finally have a break through soon. But im not going to lie I have damn near cried but I mustered up the strength and walked out the dealership twice in 2 years
Gonna be fun dancing around the dealerships when they go under. Nothing can make up for this level of price gouging.
i need to work more then a year to be able to afford the cheapest ones is still crazy to me. thank you for the effort, great video.
Thank you for this real-world look at these cars. These markups are insane. I was fortunate enough to get my FK8 Honda Civic Type R at MSRP and I am never selling that car. These markups during this dumpster fire of an economy do not seem to be sustainable. You are right. Something has to change.
It will.. and just as in 08, the dumbfucks with more money than memory will be upside down on their 600k houses and 70k (but actually 35k) vehicle loans. I honest to god feel the lower and middle classes will suffer near nothing this time. Reason being is that middle and upper management jobs have exploded far in excess of whats sustainable. Meanwhile the "essential" type of jobs (SURPRISE! the "low to un-skilled") are STILL in major demand to the point where even undocumented immigrant laborers are hard to find. This recession is going to fucking clear house of all these worthless yet over the top-compensated jobs and bring sanity back to the car and housing markets. Give a bunch of spoiled people with no real world experience ever having to struggle 6 figure incomes a month out of college and u get our current economy.
@@dr._breens_beard To add to that, throw in a US President who has no concept of how the economy works and how to actually take care of the taxpayers and country he is supposed to be looking out for and you have the mess we are in.
I've been in the market for a ~$100k track car. What has shocked me the most is that the dealership experience is worse than buying a Kia! These salespeople act like they're doing ME a favor because it's not a $500k car. I really don't have the patience for it.
As a time attack racer I absolutely love Lightning Lap. Big nod to you giving props to C&D at the end and attacking the dealerships. You should ask if they will let you on window shop and hangout with them for a bit! See if you can get their opinions on markup that would be interesting.
New car reviews are pointless because I cant afford any of them! Seriously who tf is dropping 75k on a car????
Thank you for putting the time into this. This is such an important video. The market is absolutely destroyed now- for both new and used cars. Dealerships can charge whatever they want because there are always people rich enough and willing to ignore a markup because they want the hot new thing right now- same goes for magically inflating the value of used cars that were worthless a few years ago because they're "vintage" now. The only people hurt are us regular folks.
I wish the manufacturers put more of a hand on what the dealers could do. This is insane
This is insane!! 😂 I’ll NEVER pay above MRSP. So far I’ve managed to always pay below… I’d just wait or buy a car less sought after. If a dealer mentions “market adjustment”, I walk out.
This is great if you're buying certain cars, but dealerships are wise to how in demand sports cars are in certain demos, and how few of them manufacturers are making now. If you're just buying an SUV or a family four door, great, do your thing...but since 2020 if you want something that doesn't put you to sleep to drive, the dealerships know what's up and are going to fleece you for it. Sure, you can wait, but they can wait longer, and some sucker is going to pay their markup.
What if you get into a car accident? And you’re forced to buy a car in this market? Are you still paying under MSRP even if the dealer refuses to sell to you?
CLOSE ALL CAR DEALERS! AND IF A CAR SITS THERE FOR MONTHS!!! OFFER DISCOUNTS... imagine going to the mall and paying MARKUP prices on clothes
Textiles make pennies on the dollar to make by slave labor.
Cars take millions of dollars of R&D.
Whose going to work on these things if you close down dealerships amyway?
@@putrid2529 you don't need car dealerships. you can still have OEM service centers by the manufacturer! but we don't really need car dealerships dictating price of cars etc...
@@putrid2529 Markups are purely for the rats that work in sales. The manufacturer doesn't touch that money and the manufacturer's R&D is as involved as the manufacturer when it comes to dealerships.
So with that beings said, go back to your hole- a civic isn't worth 70k.
Man I love my Chevy Dealer. They've had 2 Z06s on their lot and neither had any markup.
Even working as a technician at a dealership I only dream of the day they get stripped of the ability to sell. They ruined it for us and don't deserve the privilege anymore.
Yep, sticking with a used, manual c7 z06 with a 2.9s 0-60mph with rear wheel drive fun… just need to get rims that don’t break
A crashing new car market where dealerships get destroyed would be hella cool.
I'm confused on the math here (I'm probably just dumb) Price divided by time at the track? So wouldn't a 30,000 prius running a half hour be a way better value than a 30,000 car doing a lap in 10 seconds (as an extreme comparison)
30k prius/30 minutes(or 1800 seconds) would be 16.6 dollars per second.
Vs a 30k car doing a lap in 10 seconds would be 3000 per second, even though it's a faster car for the same price
Again, I'm probably just misunderstanding 2:15 haha
If the c8 at 140k ran 158 seconds, like you had an example at, you said about $880. Better value if it ran 300 seconds, it'd only be $466 per second?
exactly, this way of calculating is just wrong. math aint mathing
The base line of the test is that you're spending X amount of money for Y amounts of second at "full capacity" driving. My assumption is that every car on the track is going as hard as possible and utilizing all its features, power, and technology to make their base time possible.
The formula breaks the moment you "casually" drive a car on the track. hope this helps!
@@AlexMartini. that's fair. Definitely an interesting concept, I've only seen $/hp before
@@AlexMartini. It makes no sense at all, less seconds is a good thing. So if I have a $50K car with a lap time of say 180 seconds and another $50K car with a much quicker lap time of say 165 seconds, the slower car has cost of $278 per second whereas the much faster car (for the same money) costs $303 per second. So by your logic the slower car (for the same money) would be the better value? Sorry but it is a completely idiotic reference.
It is true that beyond a certain point you end up spend a lot more for smaller and smaller performance gains, cost/performance is typically a diminishing return. Oh and you can't start out doing an analysis looking at costs vs lap times, and then say the GTI is better for "reasons". There are all sorts of intangible aspects of those high priced cars that make them well worth the money to those that can afford them. Once you start doing that your whole analysis goes out the window.
Every automaker has some models that are very reliable and others that "fall apart", even Honda and Toyota have had plenty of reliability issues. For example the 1999 to 2005 Buick LeSabre and the Ford Crown Vic are two of the most reliable cars ever made, beating out scores of Honda's and Toyota's, even though Buick and Ford are not known for reliability. The point is you can't look at different models and infer their predicted reliability from a different model. These Hyundais are brand new models with completely different engines, transmissions... Some Hyundai models have been very reliable so... It is to early to say how reliable these cars will be.
In what world, is someone spending $70,000 on a Toyota Corolla? I'd love to meet that person to sit down with them to understand the logic.
Now this is some good content. This video needs to go viral!
In December i was in the market for a new car. Dealers wanted $15k on top of list for the RS3. Im in New Jersey. Ended up settling with a 2023 m340 xdrive with all the msport packages. Very happy!
So love the video and the content on this channel, and sorry if I'm confused, but cost per second (CPS) might not be the best metric, as it shows preferred values for slower cars. So let's say you have a $10 car, and you go around a track in 5 seconds, that'd be a $2 CPS, if you had a $10 car that goes around a track in 1 second that'd be a $10 CPS, despite the faster car being preferred. This means as price and speed increases, the scale gets disproportionately inflated because it costs more to go faster, and as you go faster you are dividing by fewer seconds. A better metric might be cost per second improved. So a baseline of the slowest car (or whatever) then cost per second reduced below that benchmark
I fixed his calculation: docs.google.com/spreadsheets/d/e/2PACX-1vRpFsxZZsCESjFzaqkcNVJ7ro5k3pm_4H2zULKt-gxNywArKwH5LLisRKWtI8v2H0GgQU6Xsg2-tIm8/pubhtml
@@anticarnick interesting, I hadn't thought to use average mph but it makes sense, this seems like a good solve, nice!
@@A0SAirsoft This is a great read and i'm doing a follow up :)
I love what you’re doing man. This gives the consumer a different perspective on the cost of purchasing.
Another twist you can add to this is adding cost of ownership for the first 2 years. You wouldn’t be able to pull data for cars such as the GR corolla but you’d be able to pull data for other cars.
While I know this takes place in the USA and is using American pricing, most of the dealership markups aren’t seen in Canada due to regulations on dealerships that are enforced and have to be followed for new car dealers to keep their franchising with a brand. These are province for province, but most follow a similar system to Ontario, with OMVIC. Would be cool to see this be implemented slowly state-by-state to see its impact on new car sales, whether good or bad.
Can Canadian sellers sell below msrp? I know that use to be kinda common before 2020 at least.
Hey Alex!
I didn't quite get your value per second index. Let's say car A and car B both cost $50k, but car A does the lightning lap in 180 secs whereas car B does it in 200 secs. Car A is obviously the better value because it's faster for the money, but your index gives $277 and $250 respectively, making it look like Car A is more expensive for its performance when it isn't.
Am I missing something?
I really like this alternative perspective. Very good work. I know you would agree that current dealer markups values to do equal the same actual selling prices. With the 2023 Honda Civic Type R for example, although many dealers are listening at $15-25K over, most buyers willing to make a reasonable effort to call dealers outside of their area, negotiate, and do the research, will get them at an average of $10K over sticker (or even 5K over sticker). Those paying $15K + for a 2023 Civic Type R are an exception to the average transaction.
I really like this comparison, Alex. It really illustrates that dealer asking prices are way out of control for enthusiast cars. Good job.
Alex, God bless you because you are a saint for this. You are doing God’s work calling out these ridiculous price gouges that these dealerships are making. The amount of time and effort put into this in hopes of making sense of this awful car market mess is greatly appreciated. This market’s climate is so insane it’s hard to imagine a time where it would actually be cost effective to buy new. Poor young broke boys like me and I’m sure a lot of your audience can’t even rationalize spending this much on a car, especially since half of the price tag is just greed trying to squeeze every last penny out of people too young/ignorant to understand how devastating an expense like that could be on your life. Keep up the great work and can’t wait on your next project💪💪
Hyundai falls apart? News to me. My sister had a 2005 Santa Fe and she drove that thing into the ground. Bought it used in like 2010 with 70k miles and she put 300k on it only ever changed the oil. Now she has an Elantra and it’s not giving her any problems
The m240i x drive , m4 csl, c8 zo6 and the gr corolla are my picks but somebody needs to put a dealership markup limit I understand they need to make money but those are insane no wonder most people try to buy used cars so much
First time viewer here. I actually hate C&D, always been more of a R&T guy, but I love your assessment, and your presentation, and your attitude! Why can hardly anyone comprehend that a low powered but good handling and braking car is all you need for fun? Acceleration is boring, momentum is the balls! Keep up the fine work!
how did they not do this with a GR86? Thats nuts to me lol
They did it last year. They only test 'new' cars I think.
@@goldengooch1867 gotcha, thank you for showing me the error of my ways
I think the American car community needs to engage in grassroots lobbying against dealerships. Call and write your local, state, and federal representatives and tell them this markup process and dealership behavior is anti consumer. The dealers certainly have no problem paying lobbyists on their behalf
You earned my sub with this video! I know people arugment its a supply and demand thing, I get it. But if this is true, you know what, I rather the manufacturers "mark up" all of the prices in the first place. e.g. if a 50K type-r is actually selling at 75k, hell, I rather pay that amount to Honda, so that at least a portion of it can go back to r&d and such, instead of into dealerships pockets. I know its not going to happen though.
Thank you for the video!! So true!
I inquired about a 23 Honda Civic SI, MSRP $28K and the dealer told me market value was $42K 🤦♂️
The gr corolla is still the one I want to most but it most definitely is not worth $70k+
That’s what I don’t understand they easily sell for 40k so why did he say 70k
@@Arnie3 bc dealerships mark them up $20-30k bc of demand
Went to a dealership 1 time and will never go back.
I think Car & Driver, and other car news publications, don't want to go into the weeds of car valuations. Some of these cars they tested, are arguably collector pieces that would sit in some collector's garage, and appreciate over time. The story behind a "special" car is way more important than it's actual performance, in today's world of car valuation.
While I agree, I think it's important to understand that the test on performance is based off of dealer value. When an as tested price means literally nothing, then how does a consumer understand the foundation of the testing? That's my only thing with this. Ideally, there should be an added column for this year or adjacent years that evaluate "common dealer markup %" so then consumers see more transparency rather than what I feel is a "clickbait" price. Just my opinion!
@@AlexMartini. I think you're spot on right. It would be more transparent if C&D added an a price as tested vs average Dealer value comparison with this type of test. It just sucks that most of the dealer value, incorporates the type of buyer they're targeting, and current supply & demand conditions.
Used to work at a dealership and quit because of the shady (and illegal) practices done there. Just a heads up for anyone shopping for a car right now, they will say "no mark-ups" but then they'll have a "market adjustment" or a fee with a different name to essentially do the same thing. Also, ask to be sent pics of something particular on the car because they could just be trying to get you on the lot even though the car was "just sold 30min ago", even though this is textbook definition of bait and switch. Pro tip, go at the end of the month because the sales managers will be more willing to cut down the price to get their unit bonuses.
This was a great video! Also, love ya alex, but I dont think you get to have a Ferrari in the garage and claim you're broke lol. It may very well be true, but the 'rarri ownership bars one from saying it out loud. 🤣
Bruh he has a Ferrari
@@rahatchoudhury175 thats what I said. 😂
@@superrad1659 l don’t watch him so I didn’t know that. I just meant that thanks for sharing and I was surprised
THANK YOU for putting this together. I too consume basically all forms of automotive media religiously, and have done so for more than a decade, but these publications are completely tone deaf regarding price. Oftentimes it’ll be a quick anecdote in the video mentioning markups, but it seems like a cop out and disconnected from reality to preach “value” to consumers when REALITY is completely different. Something needs to change here and the first publisher/TH-camr to do it will get major viewership.
I live in Canada, so their original test of MSRP is the only relevant test for us lol. Regardless, great video!
Dealers don't do markups in Canada?
@@AlexMartini. Nope, it's illegal here!
Bro literally a dealer in bc selling a raptor r 50k over Msrp
They will just front load the MSRP so the 6k markup will be snuck in.
This dollar per second metric doesn't really make much sense. A $10 car running 1 second laps gets $10/sec value while a $10 car running 2 second laps gets a $5/sec value. But the first car is better bc its faster for the same price so the higher value of metric is better. But if a $100 car runs one second laps its a $100/sec value vs a $10 car running one second laps at $10/sec then the lower metric value is better because a way cheaper car runs the same lap time as an expensive car. So there's not really anyway to compare which car is better.
Good video tho
Have you driven the new GTI? (Not sarcasm genuinely curious to hear your thoughts about it) Part of the reason journalists (not just Car and Driver) have been hard on it is because the interior took a massive step backwards from the last generation, with cheap touch capacitive controls everywhere including the steering wheel that you inevitably touch while driving, starting cruise control or turning on/off driver aids. There are alot of annoyances in the Mk8 that are not present in the Mk7
The next model year for the mk8 is supposed to get rid of the touch capacitive controls and my friends who own them say it's not that bad.
Sold all my vehicles and never going to buy another, honestly I couldn’t be happier or wealthier
More Alex scale type things please 😁
IT'S THE ONLY WAY I KNOW HOW TO DO IT BECAUSE MY BRAIN JUST HAS TO MEASURE THINGS.
@@AlexMartini. hey doesnt the cost per second metric penalize cars for being fast?
If a car takes forever to get around the track it has a better cost/second than a car that is the same price and is faster around the track
my dude... this was one of the most useful, well thought out "comparisons" in MANY ages. I'd almost read Road and Track and think of it as anything but a series of long winded industry commercials if you were writing for it. As is, R&T is like a commercial that my wallet has ad-blockers for.
I think people forget the jobs created by dealerships so people can have a livelihood. I do think dealerships shouldn’t exist but its very difficult to replace those who worked at the dealerships for 10+ years to find a similar job
Totally agree. I think dealerships need to change though. Margins are healthy when markups werent 50% of the cars total value. This is the same argument from 2008 where Banks got in trouble for lending out more than a house was worth, nowadays its cars and people think that it's okay. I just am not ok with that haha
I think dollars per second doesn't work out. You should multiply price by time and decide by a constant. So if a lower dollars per second is better, you're saying a slower car is better. Deciding by a bigger number gives you a lower answer. So the best is to decide by the same average time per tier and not decide by their individual times.
i don’t understand y so few commenters (alex included, i guess) seem to notice the upside-down-ness of the “dollars/second” metric..
I was very interested in the VW GolfR Mk8 but found that every dealer I could find had a $10k+ markup over MSRP, so it was $46k+.
Decided to see if there were any other AWD performance cars under $60k and discovered the new for 2022 BMW M240i, and found that I could get it fully loaded, for $56k.
As a result, there is a BMW 240i xDrive is in my garage right now. The issue with the M240i xDrive is right now is availability, there is a line 3 deep at every dealership waiting on an allotment, but almost all are doing MSRP.
Bought a 3.0 premium manual Supra two weeks ago for MSRP (plus a bs paint protection at 2.5k as the ‘markup’). Also, was on the list for an A91 manual at MSRP from the local dealer and got a call yesterday (passed on the opportunity instead of screwing the next guy on the list). Only 1 out of the four local dealers were doing straight markups and they were at +15k. How many dealers were really getting +25 for a Supra?
Dealership mark ups are the worst but they'll always find a sucker willing to pay those prices.
The markup on all these hatchbacks like the Corolla and Civic is just insane, taking cars that are honestly just your basic economy car at the end of the day and placing them into the luxury performance car price range.
That's what happens when sports cars, especially manual sports cars, are made in such small quantities compared to SUV's and trucks, especially in America.
I didn't understand the markups until I went to my local Toyota dealership and saw the severe lack of inventory and clients. The supply curve has gotten kicked to the left driving that beautiful equilibrium price up. Then people want cars, pushing that curve to the right, further driving the mark up. Until the fervor wears down and manufacturing is back in order, these mark ups aren't going anywhere.
Got my 2022 m240i at MSRP this March. Best car I've ever owned, only issue so far being the driver's side camera not working
Thank you for doing this research and putting out this video - very timely and important - subscribed.
Love your enthusiasm my guy!
Dealer mark ups are single handedly killing a lot of cars
Dollars per second does not make sense as a measure. Fewer seconds is better, right? But that makes your denominator smaller, so the metric goes up. But if you reduce the price, the metric goes down.
Awesome video. I love the content and how you are so genuine. Keep it coming
bought a car in 2022 and paid about 5-7k markup. I guess it isn't that bad compared to some of the other stories that I have heard but it left such a bad taste in my mouth that I don't think i wanna ever buy a car from a dealership ever again. I initially "haggled" with the guy down from a 10k markup because I just flat out refused to pay it and was about to walk out. He got it down to a 5k markup but when i went to go sign the papers, i realized that they charged me another 2/3 grand in "paint protection coat" and "alarm". I told them to take it off because I don't want those things but they said "there is no way to take it off because it is already on the car. You have to buy it as is"...... WTF. I needed a car because I drive quite a bit but i felt so ripped off after the whole transaction. I seriously might look into getting a tesla as my next car so that I don't have to deal with the whole fuckery that you are forced to deal with at a dealership
Talked to a Honda dealer last week, they wanted a 50% markup on a new Civic Si... They really think Facebook marketplace doesn't exist...
I'm glad somebody said it. Prices have become outrageous, and manufacturer's marketing has become disingenuous.
Read Chris Harris’ 2011 rant about the rules Ferrari put on him, including never, ever, driving an actual customer’s car…
The Camaro, Mustang and Miata will always be the best bang for the Buck. You can these at MSRP and they're cheaper to upgrade and tune.
I saw a GR Corolla roll into my work last week. I stopped the guy at lunch and we talked about. He managed to get it without ADM. They had promised him a GR86 but they never got one - so they have him the Corolla allocation.
Can I throw in my 2018 Mustang GT 6 speed PP1 that I purchased for $14500 with front end damage that I fixed for $4500? It makes 460HP at 3600lbs
Saw an Escalade V ESV at a Houston Dealership, MSRP ~$159,000 they were asking for a $70,000 Markup ridiculous!
Where did you get 25k in dealer upmark from? There is not a single Supra on autotempest that is 25k above msrp
Picked up a used PP2 mustang gt for 35k. 2:53.8 is what it got on the lightning lap. To think new cars twice that price aren't even below 3 minutes kills my brain.
Nice video, and smart way of calculating the value of performance!
This video earned a sub - first time viewer, great content
one of my buddies is a salesman at a Chevy dealership in Nashville, TN, and he sold a zo6 c8 for $257,000
I've bought 3 new cars during the pandemic all at MSRP. 2021 Jeep Trackhawk, 2022 BMW X3M Comp, and a 2023 Cadillac CT4-V Blackwing. You just need to find an honest dealer group.
These dealer markups are absolutely disgusting and should be criminalized. Markups on mass-produced vehicles should be forbidden and there should be a max markup of 10% on limited production vehicles
It blows my mind as a Canadian that there are no laws down in the states preventing dealer mark-up. It's illegal in Canada to sell a new car over MSRP. That's the whole point of the MSRP....preventing dealer mark-ups and making sure the product is priced fairly across the nation.
yeah but it would be impossible to compare if you dont use a set rule. Like only msrp prices considered because markups can vary wildly from place to place. So it would be even more inaccurate if you dont use a standard
I live vicariously through them. Their point is that they bring me joy!
Almost heard Comrade Alexi come out at the end there
Man, I remember when Car And Driver loved this Alfa Romeo sedan and rated it over an M5 even though it broke down in public after 5000 miles. No one in magazines has to live with a car (long term tests barely are) when rating them. With the exception of Consumer Reports.