Would you ever: "Market Value Adjustment"

So, I just saw a photo on Facebook that was taken by someone at the local car show.

Porsche of New Orleans has a Porsche 918 Spyder in stock and on display at the show. The dealer price tag shows MSRP as $951,600. Market Value Adjustment is $1,000,000. That makes your final price $1,951,600. That's a million dollars to the dealer, above what is, no doubt, a high margin car.

This has me thinking. Would anyone in GRM land ever pay a market value adjustment on a car?

I don't think I could. Someone else would want to sell me the car at it below MSRP, or someone else makes a similar car that isn't subject to gouging.

I don't think I would. Any of the cars I'd want that would have one will be available quickly without one.

No way. The local dodge dealer had about a $5k market adjustment on the dart for the first year after they came out, and had tons of them on the lot. They finally stopped and now there isn't a while parking lot full of them sitting there unsold.

I remember stopping at the dealer and seeing a $1000 market adjustment on the PT Cruiser. I would just wait or take a pass.

"Market Value Adjustment" = "A fool and his money" fee.

Back in late 2011 my gf was looking at new 2012 basic civics. The dealer had a $2200 market adjustment on the car and would not take my gfs offer of 18800, about a grand off msrp or come any were near it. We walked. A month later they called and gave her a price is 17700. They were so stuck on their inflated price they must have forgot her offer.
PS. Floor mats, pin stripes and door moldings came with it at no extra. On the first visit they were another 800.

I feel bad for any one that did no walk at the time. Steve

Typically MVA shows up when there is a lot of hype about a new model car and quickly just becomes part of the depreciation. Especially as production eventually meets demand. Sometimes it happens when there is a lot of demand for particular cars because of other reasons-- An oil spike in 2008 had a lot of Toyota dealers putting MVAs on Priuses, for example. Those willing to pay it are often overly obsessed with status, aren't astute financially, and/or don't care about throwing money away. Those aren't traits I'd expect to find in GRMers generally.

Personally, I think it is foolish to pay an MVA and wouldn't do it. If I wanted a car that bad, I have enough will power and patience to wait until the MVA disappears or at least shop around to find a dealer that isn't charging one.

That said, I suppose there are instances where it would make economic sense and where you might not have a choice if you really want a particular car. For example, the Ford GT. Built in a limited quantity and now worth about a double what they went for new. That would have been a good buy on an awesome car even with some MVA.

I don't know about the 918 or a 1M premium. That strikes me as the oil-sheik-wants-the-first-one kind of money. And perhaps a dealer who is just testing the market rather than defining it. He probably would E36 M3 his paints if someone actually paid that and doesn't care if he holds on to it for another 6 months and gets "just" a $100k MVA when there are a few more available.

I certainly would.

Anything I would buy is such a piece of crap that the Market Value Adjustment would be a negative number. I would only help me.

I bought a 1990 Miata 25 years ago yesterday (has it really been that long?). It took months and much grinding of teeth because I refused to pay any MVA. At that time, most Miatas were sold before they even hit the ground. I suspect the same thing will happen with the ND for a while, so I'm staying away from any Mazda dealerships for at least the next two years.

SVreX wrote: I certainly would. Anything I would buy is such a piece of crap that the Market Value Adjustment would be a negative number. I would only help me.

I love this. Next time I buy a car, I'm calling my offer a market value adjustment.

MVA means an instant walk from me. I consider it legal extortion.

If somebody is so anxious to buy a hot new car, why should the dealer not make out like a bandit? Wait a few months, and buy it at suggested list. Wait a year and a half, buy it at a discount.

In the case of the 918, I bet if the dealer sold at list, the new owner would turn around a pocket a wad when he resold...

For a cayman gt4 I would, but that's about it. Porsche North America dings dealers that do market value adjustments FYI. Call them and that dealer won't get the next limited run car when allotments are determined.

I suspect the million dollar markup on that car was a publicity stunt to get people talking about them.

Word on the street is that 918's are trading on the secondary market for 1.5 million.
During the height of the Harley craze when order waits were close to a year, I knew two guys who would order a new bike every year. They'd take delivery, drive it for a season and sell it for 2-5k more than they paid to someone who didn't want to wait.
I'm very much in favor of the secondary market jacking prices for impatient people, I do not like dealers doing it. It sets a culture of "I'm going to fleece you" between the dealer and the customer. It makes me think of the dealers who do "nitrogen filled tires-$80" and other BS. I don't want to do business with someone who is blatantly trying to rip me off.

Hell, no. I'll never be that stupid.

FWIW, I once had to deal with a guy who had bought one of the first 4 New Beetles sold in Ohio, he was continually pissed at that car and treated everyone at my place in SC like dirt. Turns out the real reason he was torqued was the selling dealership hit him for $4k MVA; the worst part? His uncle owned the dealership.

drummerfromdefleopard wrote: For a cayman gt4 I would, but that's about it. Porsche North America dings dealers that do market value adjustments FYI. Call them and that dealer won't get the next limited run car when allotments are determined.

I've heard Ferrari does something similar. I've also heard that Ferrari dealers will sell new cars to special customers at the controlled price, let them drive it for a while, then buy it back and put it up for sale at a premium above the controlled new price. The customer gets to play with the new car, gets more than he paid for it from the dealer, then waits for the new next model to play with. Must be nice to travel in those circles.

Isn't it simple market economics? You know, the whole supply and demand thing? Convertible prices go up in the spring, that's MVA. Biturbos are basically free while their E30 competitors are not, MVA.

If this is a new car that will instantly have a $1.5M value when it leaves the lot, then it seems that the market value is...$1.5M.

NO!!!

Theyre pretty much all significantly above msrp once out of Porsche's hands. There's only 918 of them, more than many other supercars sure, but it's also fairly unique in the segment. I read somewhere Porsche loses a small amount on every one they sell, which still doesnt make much sense to me, especially considering the apparent market value now.

I fear this will never be an issue in my life. Even if I had the means to buy such a car in the first place, I would not be willing to pay that kind of mark up.

So what's new? In the '60s & '70s dealers did their own version of MVA which I still see a lot. Actually the practice is probably even older than that. But since I didn't start buying cars until the '60s, I can't say.

The dealer will order a car that's popular with as many trash accessories as the manufacturer lists for a start. Next step,add "dealer installed" pin striping, rust proofing, fancy floor mats, etc. All at full retail markup of about 200% of course. Put the car out there and sell it.

If the people don't take it as it now is, which doesn't happen often, you still have a recourse. Sell the car at original MSRP which includes all the wasteful factory options, then convince the sap of a buyer he/she is getting a great deal. No hassle, straight MSRP!! You still make enough on the factory markups to come out ahead.

It happens every day. And almost no one whines.

SVreX wrote: I certainly would. Anything I would buy is such a piece of crap that the Market Value Adjustment would be a negative number. I would only help me.

This sure helped me with my RX8! I got thousands off in a mazda rebate, an extra grand off from the dealer, plus included bumper to bumper extended warranty. SO many thousands under sticker, because there was absolutely NO demand in the market.

Assuming $4 gas the whole time, I still have 10k more miles to go before the money spend on gas plus the actual amount paid for the car catches up with the MSRP. Who cares about the bad rotary mileage?!

I remember when it was called ADM. Additional dealer markup. When we bought or 79 accord 4 dr ( first year), dealers were adding every piece of crap they could . This was the days of Tektor paint and fabric protectant. They were also on a long back order. We were able to buy one at list and we only added AC. We got really lucky.

The local Honda dealership tried that with one of hideous orange Fits during one of the global gas/oil hiccups a few years ago. The funny thing is I wanted one bad enough to pay retail and live with the color, but there was simply no way I was paying above sticker for it. The dealership absolutely refused to budge, so I walked. A few weeks later, the bottom fell out of the oil market. That stupid car was still there 6 months later. I have to assume they eventually cut it loose for way less than I was offering.