So, were auto prices just too high?

[Ghoulish Delight]

Originally Posted by scaeagles

We have a Cadillac dealer in town saying they'll beat the official employee discount price on some vehicles by as much as 2500. Now how can they do that? It's because the cars are priced WAY above the cost of production.

Ah, but that doesn't mean they are over priced. I'm talking over priced from a pure supply-and-demand standpoint. From that perspective, the definition of overpriced has nothing to do with profit margin on an individual unit, it has to do with whether they would make more money by lowering price and increasing volume. It looks like that's the case, that the prices were outpacing the demand curve. But was it JUST that the prices were too high, or was a combination of lower price + marketing spin?