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Car Makers Tell Dealers to Back Off Predatory Pricing Strategies

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Multiple car makers are telling dealerships to knock it off with high markups and predatory pricing schemes as dealers try to take advantage of the hot car market.


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After receiving numerous complaints from customers, Ford, General Motors, Subaru, Hyundai, and Infiniti have all sent letters to dealers warning that excessive markups and bait-and-switch sales tactics ultimately hurt the brands and sales in the long run. 


Ford's latest letter stems from dealers charging sometimes exorbitant reservation fees well above the official $100 just for a chance to purchase a new F-150 Lightning, the electric version of Ford's popular F-150 pickup. Similarly, GM sent a letter telling dealers to stop the reservation antics and markups on the 2023 Chevy Corvette Z06. 


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There have been a number of customer complaints over Subaru dealers attempting to charge buyers a "low inventory surcharge" up to $6,000, putting the car out of reach. Hyundai has also warned dealers to lay off slimy sales tactics including bait-and-switch advertising and huge markups that mean cars are being sold for way above sticker price. 


Whether these warnings will help stem dealers' tactics remains to be seen. Ultimately, dealers are independent businesses that are under no obligation to sell vehicles for the manufacturer's suggested retail price. Car makers do, however, hold sway in distribution and advertising support, which may be enough to get some dealers back on track.


Gallery: Car Buyers Are Paying More Than Sticker Price — Here's How Much


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