It seems that the era of people willingly overpaying for new cars may be at an end as data shows that the number of people that willingly let dealers overcharge them for a shiny new piece of metal saw a decrease in the last year.
Data from JD Power’s 2024 U.S. Sales Satisfaction Index (SSI) Study shows that the number of car buyers willing to pay markup for a new car dropped seven percent in the last year. For mass market brands like Hyundai and Ford in 2023, 15 percent of buyers were willing to overpay; just eight percent of buyers were willing in 2024. Those numbers get smaller with premium buyers: in 2023 10 percent of premium buyers overpaid. That number fell to just six percent in 2024.
According to J.D. Power, the reason for the drop is higher dealer inventories. The struggles during and immediately after the pandemic saw buyers clamoring for any inventory they could find. Dealers capitalized on this by marking up everything, especially hot models that debuted at the time like the Ford Bronco and F-150 Lighting. There were financial repercussions to this of course. Many have found themselves underwater on their car loans as resales values for certain segments tanked. If you paid $70,000+ for a $40,000 Kia EV6 in 2022, you’re probably in some real deep doo doo right about now.
There were other surprising findings in the study:
- EV buyers are less satisfied with their vehicles than gas vehicle buyers. These buyers are also less satisfied with the knowledge and expertise of dealer staff when it comes to buying EVs; JD Power says Tesla buyers in particular aren’t satisfied with the explanation of vehicle features.
- Sales satisfaction for premium brands saw Porsche take first with Infiniti and Jaguar coming in second and third.
Porsche also took two top spots for the highest rated premium car and premium SUV in JD Power’s segment awards, which ranks the highest ranked brands in a particular segment. Nissan took the top spot for mass market car, Buick took the top spot for mass market SUV/Minivan and GMC took the top spot for mass market truck.