Did you ever wonder about the reasoning behind Kia dealers not charging over MSRP?
Most cars these days sell for more than the manufacturer’s sticker price. The reason for this is that there is a higher demand for such vehicles, including the hobbled production because of a lack of global parts supply.
But you may be surprised to know that the brand of vehicle with the highest percentage of markups on average is quite unexpected. You may instantly assume that this brand is one that sells luxury vehicles or perhaps some high-performance car make.
However, it is not – this is actually Kia, a brand from South Korea, which is regarded as a brand with value purchase. For example, Kia SUVs and sedans sell for at least 6 percent over their MSRP. On the other hand, other vehicles fall behind it such as Honda, Hyundai, and Land Rover, the latter being a luxury brand of SUV.
When it comes to prices in US dollars, the highest dealer markups would be the Land Rover. In fact, customers pay about $3,686 more than the sticker price. Yet, the average purchase cost for its SUV is more than $94,000.
But at the same time, Kia still goes second among all of the car brands in the United States. Customers pay about $2,183 more than the MSRP. This is quite a remarkable discovery considering the fact that the average purchase price for a Kia is around $36,000.
Find out why Kia dealers are not charging over MSRP and everything else you need to know about it.
Kia Dealers Not Charging over MSRP
There are three primary reasons why Kia ranks high when it comes to the dealer price markups.
For instance, it is regarded as a decent value for the price you pay. This is the reputation that Kia has established over the years, whether it is an SUV or a sedan. This is why in this day and age where there is a tight market for vehicles, dealers can easily cash in on this perceived value of a Kia.
Even if you are paying more than what you do for your competitor, you still get a bang for your buck with a Kia. Moreover, Kia has been working hard to eliminate the typical assumption of many people that it is only a brand one buys when settling for a budget vehicle.
This is why the brand has been marketing the attributes and design of the vehicles to promote the fact that it is not a budget vehicle but something worth every dollar you pay. Among the key highlights of a Kia vehicle includes its sporty appearance, as well as the different technologies it comes with whether it is hybrid or electric.
It is also worth noting that Kia dealers are basically independent companies. Thus, they are able to set the prices they want. However, this pricing power has gained numerous benefits from the product line-up and marketing decisions of Kia in the United States.
Even prior to the pressing supply chain issue met by Kia in terms of a slow down with its vehicle production, there are still some models including the Telluride SUV that sells for more than the sticker price. There is also the new and improved Kia Carnival, which is a minivan that has been gaining popularity because of its unique features and being the only one of its kind.
The Carnival and the Telluride both sell about 7 percent over the MSRP. You can also get some premium features on these vehicles. And when these are added into the product, consumers consider it a no-brainer to purchase these.
Aside from the manufacturing slow downs in the entire vehicle production industry, there is something about Kia vehicles that make them more special. The rarity of these models is one other thing people look for. This is why the “days’ supply” for Kia, which refers to the dealership’s inventory levels, has balanced against the speed at which these vehicles sell. It has been down to just one-digit, which is quite impressive.
As for the Kia Soul, which is not quite a very popular model, has obtained a mark-up. Many consumers pay $1,000 more the MSRP in July – and it is only the base model of this vehicle make.
Another reason why Kia vehicles sell for more than their sticker price is the vast number of its fully electric, plug-in, and hybrid vehicle models. Considering the concerns with fuel prices, these vehicles have been selling more as compared to the gas counterparts. Hence, consumers are able to save more money on petrol, which is why they would rather pay a higher amount for a vehicle that can help to stretch their budget.
Among the Kia models that sell for 8 percent over the sticker price include the Sorento Hybrid, Sportage Hybrid, and the Sportage Plug-In Hybrid. As for the EV6 by Kia, which is a purely electric car, it is priced at 6.4 percent over the sticker price.
With the already low base prices as compared to their competitors, Kia customers do not feel bad about paying a bit more just to get more bang for their buck. It is also worth noting that this South Korean car brand is more focused on maintaining a better long term reputation instead of prioritizing quick cash upfront.
Kia is also noted for the multiple extras that come with purchasing a vehicle. These included a warranty coverage that helps with justifying the steeper prices. With that being said, you can most definitely get the best value for your dollar by purchasing a Kia – a combination of aesthetics, performance, lifespan, and some extra perks that every consumer loves.
There are many Kia dealers not charging over MSRP because of the apparent benefits that one can expect by purchasing this brand of vehicle. This is why one can expect a great return on their investment, which offsets the higher cost of the vehicle considering it is expected to last a long time.