These are the car models with the highest profit margins above the recommended retail price

Key learning points

  • Luxury cars top the list of vehicles commonly listed above MSRP, indicating strong demand and differing sales tactics among luxury dealers.
  • Electric cars are performing significantly worse, possibly due to a weakening market and insufficient charging infrastructure.
  • The best luxury car models have a markup of about 19-25% over the MSRP, while electric cars have the most favorable list price MSRP.



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Car prices, like most other commodities, have risen recently due to many factors. Supply chain shortages, long-term impacts of the pandemic and geopolitical events can all influence the sticker placed on the window of a shiny new car. In addition, the MSRP (manufacturer’s suggested retail price) is a guideline, a guideline that allows dealers to advertise and sell under, at, or over.


What if a trend could be observed? And what if there were specific types or brands of cars that were routinely listed above or below sticker price? Fortunately, data collection and analysis website iSeeCars already has extensive analysis for 2023-2024, and the results may surprise you. Some might not – luxury cars And performance cars are more likely to be quoted above their list price. There’s more to the story, so below we’ll take a quick look at what the data has to say, and which cars could be routinely sold for below recommended prices.

iSeeCars methodology:
“iSeeCars analyzed more than 16 million new car sales from January 2023 to January 2024. The average list prices of new cars, as well as the average of their suggested retail prices, were collected by month, as well as by body style, fuel type and model. Heavy-duty vehicles and models with a low volume were excluded from further analysis. The differences between average prices and average suggested retail price were expressed as percentage differences.’

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In the original post, iSeeCars looked at approximately 16 million new car sales from January 2023 to January 2024. They looked at the average list prices of new cars and the average of their suggested retail prices, and then analyzed the data taking several factors into account. such as month, body style, fuel type and model. The differences between the average prices and the average recommended retail price were expressed as percentage differences. Of course, through negotiations and special offers, the cars can be sold for more or less than their list price.

However, there are some important insights early on. Firstly, iSeeCars’ analysis indicates that new cars are listed at an average of 7.2% above their suggested retail price. The good news is that this is already almost 2% less than twelve months ago. Another important conclusion is that the categories that score the highest in relation to their recommended retail price come from luxury brands, while the average recommended retail price ratios of electric cars are at the lower end. Your shiny new 2024 Mini Hardtop will likely carry a price tag that goes above MSRP, while a Ford F-150 hybrid will likely sell for below MSRP, according to the same data.


Key points about the current MSRP pricing environment

  • Luxury cars at the top of the list price/MSRP gap may indicate a strong market for the category and a distinct attitude and sales activity among luxury dealers
  • Electric cars occupy the lowest share of cars below their recommended retail price – this could indicate a slowing market and low demand
  • Several factors can influence the declining demand for electric cars, such as a mediocre charging network

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Tesla’s Model X and Model S experienced a lack of popularity in 2022 due to a slowdown in demand and production challenges.

Performance and luxury cars command a premium

Below we see a small overview of the top ten models with the highest price increase compared to their recommended retail price from 2023-2024. All models, apart from the Toyota Corolla Cross Hybrid, come from luxury brands.


At the top is MINI, a premium sub-brand of BMW. Porsche has a lot of attention, which could indicate a strong ethos among dealers for applying surcharges and customers’ willingness to pay more. We might expect the reverse to be true for budget brands. For reference, the Mini Hardtop in iSeeCars’ data showed a jump from its average MSRP of $30,000 to an average list price of $37,000.

Average List Price and MSRP Difference (Top 10 Highest)

Car model

Increase in list price compared to recommended retail price (’23-’24)

MINI hardtop

25.5%

Porsche Taycan sedan

23.1%

Porsche Cayenne

21.9%

Porshe Macan

21.3%

Porsche Taycan car

20.9%

Cadillac CT5-V

20%

Porsche 718 Boxster

19.9%

Toyota Corolla Cross-Hybrid

19.4%

BMW X3 M

19.4%

Cadillac CT4-V

19.3%


Data courtesy of iSeeCars

Takeaways from the luxury car data above

  • Porsche dominates the top ten luxury car models whose list prices are furthest above the recommended retail price of ’23-’24
  • The top ten models have a dealer markup of approximately 19-25% over their MSRP

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Electric cars are experiencing a dip in demand

Nissan Leaf - Charging shot, front view
Via: Nissan

The table below shows the top ten car models whose list average prices were furthest below their average MSRP between 2023 and 2024. None of the models are true luxury models and the top five consist of four electric cars and one hybrid. There are a total of five electric cars and two hybrids. iSeeCar’s data could reveal weakened demand for electric vehicles.

Of course, there are many factors and this data is open to interpretation, but two key areas could be at play here: declining interest and weak charging infrastructure. The Hyundai Kona Electric has the most favorable price-to-recommended retail price ratio (for customers), as customers saw sticker prices on average $1,753 below MSRP.


Average List Price and MSRP Difference (Top 10 Highest)

Car model

Difference in list price compared to recommended retail price (’23-’24)

Hyundai Kona Electric

-4.6%

Volkswagen ID.4

-3.6%

Ford F-150 Hybrid

-3.3%

Kia EV6

-2.5%

Hyundai Ioniq6

-2.4%

Nissan Maxima

-2.2%

Chrysler Pacifica plug-in hybrid

-2%

Nissan Ariya

-1.9%

Hyundai Ioniq 5

-1.9%

Volkswagen Arteon

-1.8%

Data courtesy of iSeeCars


Takeaways from the section above

  • In contrast to cars with an average list price above the recommended retail price, the cars with the most favorable list price-recommended retail price ratio are often electric and economical cars.
  • The Hyundai Kona Electric had the lowest average list price relative to MSRP of -4.6% – which equates to almost $2,000
  • Several factors are at play, but declining interest in electric cars may be responsible

Why electric cars are less expensive while luxury cars are sold at a profit margin

We can draw whatever conclusion we want about why some cars sell for more or less than their MSRP, but iSeeCars’ data and analysis paints an interesting picture. Perhaps unsurprising to many, it raises questions and highlights different dealer practices for specific categories, as well as infrastructure issues.

There is already commentary about the electric car charging network and its many problems. The EV industry has grown rapidly over the past fifteen years, perhaps outpacing the evolution of the charging network to the point where there are hotspots struggling to meet charging demand.


Is interest in electric vehicles declining? That’s another deep dive into the data that iSeeCars could make, but it could be responsible for the difference in list price and MSRP we see above. Declining interest could be due to critics’ views on the impact of electric cars on the environment (and on poor countries). The lack of charging infrastructure and its quality is likely to be a major problem for electric vehicles in the coming years. If anything, list prices reflect this, as more people buying electric vehicles can slowly help improve the network.

Source: iSeeCars

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