Dealer markups are usually a classic case of supply and demand. On specialty and performance cars like a Dodge Demon, 911 GT3 or even a Civic Type R, I get why this happens. But now folks are paying markups on Korean-made family cars.
The Hyundai Palisade and its mechanical twin the Kia Telluride are very good SUVs. They are spacious, offer great features, and ride very well. Both brands have fielded some excellent competition in a very crowded field, and the demand for these cars is high. However, I’m amazed that buyers are apparently shelling out quite a bit over MSRP on a car that isn’t that special, in the grand scheme of things, and is sure to depreciate hard.
I’ve had several conversations with buyers who are interested in the Palisade and/or Telluride only to go to their local dealer can get some sticker shock on what some dealers are asking for these vehicles. Surprisingly enough, the Hyundai dealers seem to be a bit more egregious about this practice versus the Kia stores that have had historically not the best reputation for positive car-buying experiences.
There are some Palisades listed for sale at $10,000 over MSRP:
While the Kias are marked up to between $5,000 to $7,000 over MSRP:
While these upcharges may seem mild compared to Supras going for over six-figures or the market adjustments that impacted Dodge Demons or Civic Type Rs, remember these aren’t cars with a hardcore performance buyer, a specialty and limited market looking at unique cars. By contrast, the Palisade and Telluride have all kinds of competition in the way of the Pilot. Highlander, Explorer, Atlas, and Ascent just to name a few. All of which can be had with very competitive discounts.
Let’s also not forget the higher-end Korean cars tend to depreciate at a highly accelerated rate compared with other Asian branded cars, so the folks that paid sticker price or above on these two vehicles are going to be in for a serious shock when they go to trade those cars in.
So what should you do if you are interested in the Palisade or Telluride? The answer is simple: wait. Just like all other mainstream cars, when the hype dies down and inventory builds up, discounts and rebates will make them more appealing.