by Gabrielle DeSantis

Car salespeople often go out of their way to let you know how much of a deal you’ll get if you buy. For instance, you could get $500 bonus cash, 0.9% APR, extra credit on your trade — the works. But the key number in car sales is the price of the vehicle. Cars arrive at the dealership with an MSRP, or manufacturer’s suggested retail price. As the term indicates, this is the suggested price of the vehicle.

But if dealerships want to charge more, potentially on a popular model, are they legally allowed to do so?

MSRP, sticker price, and dealer invoice

So, where does the MSRP come from? Is it legal to charge more than that, and is there a difference between MSRP, sticker price, and dealer invoice? Earlier this year, Edmunds went into detail about the different prices a buyer might encounter during an auto purchase. Beginning with MSRP: The manufacturer’s suggested retail price is just that: what the manufacturer (Kia, for example) suggests the dealership charge for the car. The dealer invoice is the amount the dealership paid the manufacturer for the vehicle.

To oversimplify, the dealership’s profit on a vehicle is the sale price minus the dealer invoice (setting side financing, aftermarkets, etc.) When the sale price is the same as the MSRP, every vehicle produces the same profit. But the MSRP is generally higher than the dealer invoice, which gives dealerships negotiating room when buyers aren’t willing to shell out for the MSRP, also known as the sticker price.

Can a dealer charge over the MSRP?

The idea of overcharging based on the MSRP doesn’t appear to make much sense. After all, if a dealership in the next city is selling a car at the MSRP instead of a $1,000 upcharge, there’s no reason to pay more than the sticker price. However, dealerships have been unable to keep certain models in stock. For example, the 2020 Kia Telluride has exceeded expectations in every way, even being named the World Car of the Year.

Dealers have struggled to keep the 2020 Telluride in stock on their lots, eventually raising the prices above MSRP to guarantee bigger profits on the wildly popular SUV. As Kia settled into its reputation as a surprising contender in the SUV market, dealers raised the prices on the 2020 Telluride. Consumers had the choice to pick another vehicle at or below MSRP instead, but few have complained about their Telluride.

Why would a dealer ask for more than the manufacturer’s suggested retail price?

But what about when the tables are turned? Dealers are generally happy to take a small profit — or even no profit or a loss — to move stock and meet quotas, but when popular vehicles like the Telluride are flying off the lot, they can afford to be more discerning when they set the sales price. The MSRP is suggested, and no law or regulation prevents dealers from pricing vehicles higher. But this occurs only when demand is so high that dealers aren’t struggling to make a sale, and it generally indicates that an MSRP is too low.

In the rare case that dealers can’t restock a particular vehicle fast enough, it’s perfectly legal (and a savvy business decision) to charge more than the MSRP. The recent semiconductor chip shortage has led to production delays, causing dealers to receive fewer cars than usual. To compensate, many have raised prices above MSRP or left prices at MSRP instead of reducing them. This slows the overall sales numbers but ensures a profit when the vehicles are purchased.

So, when demand is significantly higher than supply for any reason, raising the price above MSRP allows dealerships to maintain similar revenue goals.

RELATED: Used Cars Devastatingly Skyrocket to New Car Prices

The post Can a Retailer Charge Over MSRP? appeared first on MotorBiscuit.

by Gabrielle DeSantis

With recent news reports about airline passengers behaving badly on airplanes, the expectation that any flight will be entirely safe is long gone. Fools can and do cause trouble for themselves, flight crews, and fellow passengers on all sorts of planes. Nonetheless, some airlines are more dangerous than others, especially if you’re already afraid of flying. Which air carriers should the flight-phobic avoid?

Planes that are unsafe at any altitude

In 2019, Forbes reported that major airlines were relatively safe despite two recent British Airways mishaps, one of which involved a flaming airplane at McCarran International Airport in Las Vegas. Forbes also noted a Boeing 777 that crash-landed in Dubai in 2016 and two fatal Malaysia Airlines crashes.

Explaining that “many of the world’s most dangerous airlines are banned from flying into both the U.S. and E.U.,” Forbes provides a curated list of the most unsafe air carriers at the time. Ariana Afghan Airlines, Bluewing Airlines out of Suriname, Kazakhstan-based Scat Airlines, and Royal Nepal Airlines were listed.

Today, the dangerous airline list provided by AirlineRatings includes the above and adds Pakistan International Airlines, Air Algeria, Pakistan’s Airblue, and Iran Aseman Airlines. Each of these carriers received a one-star (out of eight) safety rating, and only one, Pakistan International Airlines, was deemed coronavirus (COVID-19) compliant.

In March of this year, TripSavvy offered their own list of the world’s most dangerous air carriers, especially for those who fear flying. Calling it “difficult not to have empathy for pilots who land jets in Nepal,” TripSavvy said it is somewhat odd that Nepal Airlines has such an awful track record when considering that the carrier doesn’t fly into or out of the Himalayan airport of Lukla, which they rate as the most hazardous airport in the world. Nepal Airlines has suffered nearly a dozen fatal accidents in the past 30 years.

Another airline deemed to be dangerous is Kam Air. Based in Afghanistan, the carrier suffered numerous fatal accidents resulting in more than 100 passenger deaths since its inception just one decade ago.

Dangerous airlines that are banned

TripSavvy also released a list of severely restricted airlines or those banned from flying within European airspace. Every airline from Afghanistan is on the list, as is every air carrier from Djibouti, Equatorial Guinea, Liberia, and the Republic of Congo. Due to safety issues, every air carrier from Sudan, Kyrgyz Republic, Mozambique, and Zambia is also banned in Europe.

It’s not just airlines that are dangerous. In fact, several otherwise safe carriers have recently had troubles due to passengers who refuse to follow even the simplest safety rules, such as wearing a mask during the current global health crisis.

Airplane passengers behaving badly

On August 8 of this year, the Federal Aviation Administration (FAA) reported 2,786 mask violations and more than 3,800 unruly passengers who put themselves, flight crews, and fellow passengers in peril. It’s unclear why so many people disrupt aircrafts. Still, the FAA is now prepared to enforce a zero-tolerance policy and may levy fines of up to $37,000 per violation while noting that a single incident may result in multiple violations, fines, and criminal prosecution.

Mask violations can come with hefty penalties, too, especially when maskless and/or intoxicated passengers interfere with flight crews and fellow passengers. According to The Hill, such fines can range from $7,500 to $21,000 per incident.

If all this talk about badly behaved passengers and notoriously dangerous airlines has you worried, take heart. Basic Planet offered its own list of the best and safest airlines in America. Topping the list is Virgin Airlines, with JetBlue, Allegiant Airways, Delta Airlines, and Hawaiian Airlines following close behind.

RELATED: Are Helicopters Safer Than Planes?

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