2022 Yukon Denali: Dealer Markup?

[altona]

Allocations are based on previous year's sales. Those that kept the sold and stock orders coming in during Covid doom and gloom will be rewarded with more allocations this year (and next). I read allocation are calculated quarterly and divvied out weekly.

So, a large volume dealer during the last 2 years will still be a high-volume dealer this year and unfortunately a low volume dealer will remain low regardless of how many customers sold orders they take.

 

[Yarosuav]

I think it’s all a crapshoot - I custom ordered my Yukon Denali Duramax on 1/20 from a small family owned dealership. A lot of options, including Premium Package, Advanced Tech, Max Tow, Air Suspension, etc.

I picked it up on 3/31, and been driving it for couple weeks. A little over two months for the whole process…

 

[ProfeZZor X]

The “must finance or lease through their vendors” is a little shady. Sure we don’t charge you over MSRP but we’ll make a huge profit charging you several points in interest over what you realistically can get anywhere else lol

Financing in-house is where dealerships make all of their money.

Imagine your car gets there and the best rate they can give you is like 5-6%

I'm aware of all the trickery dealerships do to make as much money from you as possible. Like telling you the bank approved your loan with an interest rate of 7%, but in reality, the bank only charged you 4%, and the dealer pockets that 3%.

In the case of Casa, all you have to do is agree to their lenders upon delivery of the vehicle, but refinance through your credit union after you've driven off. That one is an easy fix.

 

[Dailypaints]

I’m looking to purchase/order a brand new 2022 Yukon Denali, fully loaded, and the dealer I’m talking wants a $9k markup. I essentially told him no thanks.

Has anyone recently ordered or purchased something similar without a markup? I know the car market is tight, but that just seems ridiculous.

I drove 30 minutes to drive a Yukon I found online. Sticker was around $78,000. First thing I asked, was there a dealer mark up? He said yes, $25,000. I about fell down. I've seen $10,000 a lot but $25,000? That's ridiculous! I just ordered one from a dealer with no mark up. It may take 6 mo to get but I'm not paying over retail for a car.

 

[firsttimetahoe]

I'm aware of all the trickery dealerships do to make as much money from you as possible. Like telling you the bank approved your loan with an interest rate of 7%, but in reality, the bank only charged you 4%, and the dealer pockets that 3%.

In the case of Casa, all you have to do is agree to their lenders upon delivery of the vehicle, but refinance through your credit union after you've driven off. That one is an easy fix.

Yeah…but just have to make sure they let you prepay it without penalty…wouldnt be shocked if they have that clause in there

 

[Bambler]

In my opinion, we’re staring down the barrel of a recession. Rising interest rates are almost followed by a recession. Once that hits, these markups will look downright silly.

 

[firsttimetahoe]

In my opinion, we’re staring down the barrel of a recession. Rising interest rates are almost followed by a recession. Once that hits, these markups will look downright silly.

Recessions do tend to impact the income stream of people who can afford these cars. The auto industry is going to continue experience inventory issues for the next year. Dealers will not be sitting on excess inventory that they can't sell.

 

[Polo08816]

In my opinion, we’re staring down the barrel of a recession. Rising interest rates are almost followed by a recession. Once that hits, these markups will look downright silly.

Recessions do tend to impact the income stream of people who can afford these cars. The auto industry is going to continue experience inventory issues for the next year. Dealers will not be sitting on excess inventory that they can't sell.

It depends on what you define as "excess" and "can't sell".

I think the metric we will focus on is the change in "days supply" of inventory. In other words, how much longer do vehicles sit on dealer lots. I submit that the aforementioned metric would be affected depending on how severe a recession may be. It may also be affected by how much volume one manufacturers competitors inject into a particular segment as well.

 

[firsttimetahoe]

I think the metric we will focus on is the change in "days supply" of inventory. In other words, how much longer do vehicles sit on dealer lots. I submit that the aforementioned metric would be affected depending on how severe a recession may be. It may also be affected by how much volume one manufacturers competitors inject into a particular segment as well.

Inventory is going to continue to be barebones. The chip shortage is only going get worse. Ukraine makes over half of the neon that is needed for every semiconductor in the world. They haven’t been producing neon since the war. They probably won’t start producing again for a long time. No other company in any other country can simply just start to make up for that production that is missing. That’ll take years. Eventually we’re going to eat into all of the reserves of neon and there will be a major problem with producing things that are dependent on chips. This applies to outside the auto industry too. I’ve seen estimates that say this will take 6 months for the reserve to be entirely depleted.

Since every vehicle these days relies on chips, they’re going to have to either start selling cars with zero features or more cars will be made and sitting in lots waiting for chips for a long long time.

If the demand for these types of vehicles remains high, and the inventory remains low, dealer markups will continue to exist and potentially become even greater.

Mrs and Misses Smith who earn a nice living and want to buy an $75k Yukon Denali don’t care about a recession. And if they really want that car, they may spend $10-$25k in a markup during a recession just to get there hands on one.

 

[R32driver]

Inventory is 100% for sure going to remain low due to chip shortages. I was reading an article this morning where Volkswagen (currently the #2 largest vehicle manufacturer in the world) announced they are planning on the chip shortage/vehicle shortage to last into 2024 at this point...

Low inventory and crazy dealer markups will continue to be the norm for at least a couple more years, maybe longer if the war drags on or escalates