Cadillac LYRIQ Buyers See Dealer Profit Margins
Order books for the 2023 Cadillac LYRIQ are already full, but some dealers are offering Debut editions. While the all-electric SUV has a reasonable starting MSRP of $59,990, consumers will be hard-pressed to find a model at that price when going to a dealership to buy one. As GM Authority reports, dealers have already placed a markup on the LYRIQ.
The outlet shares the story of a customer named Melanie who placed a pre-order for a 2023 Cadillac LYRIQ Debut Edition. When Melanie contacted a dealership in Thousand Oaks, California to inquire about her vehicle, a representative of Silver Star Cadillac’s sales told him the dealership would apply a $5,000 market adjustment fee to his allocation due to “high demand and limited supply.” ”
“I was able to independently confirm a pre-order for Lyriq and was asked to select a dealership,” Melanie said in a post on markups.org. “I inquired online and was not told about this increase until they received MY allowance. No way, no how! I don’t like fools, especially greedy fools!
We certainly understand where Melanie is coming from, because dealer profit margins for vehicles are absurd. But, as far as profit margins go, it’s one of the most modest we’ve seen. As GM Authority points out, some reservation holders for the GMC Hummer EV Pickup Edition 1 have seen markups of up to $50,000. More recently, we’ve seen markups as high as $26,000 for the Toyota bZ4X. In the modern era of buying a new car, markups have become common. Previously, they were installed only on exclusive vehicles.
Earlier in January, General Motors warned dealers against applying markups to its vehicles. As the outlet reports, the automaker sent a letter to dealers warning them that they would be “forced to take action if they learn of unethical sales practices or brokerage activities that compromise the ‘integrity’ of its brands. GM said it would redirect future products to other dealers or use “other resources prescribed by the dealers’ sales and service agreement.” From Melanie’s story, it doesn’t seem like the dealerships care about unnecessary threats from GM.
As much as we hate dealer mark-ups, they are perfectly legal because automakers give dealers the freedom to price the vehicles they sell based on demand. Due to chip shortages and supply chain issues, dealers are marking cars as demand for vehicles far exceeds supply. There’s not much consumers can do if they want to avoid paying a markup. They may try shopping at different dealerships, although this may involve going to another state or simply refusing to buy the vehicle. Some consumers are more than happy to pay the markup, which makes the situation worse for other shoppers.
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Pictured: 2023 Cadillac LYRIQ