Buyer Beware: Tips for Avoiding Dealer Markups in 2023

The vast majority of car buyers in the U.S. are not accustomed to ordering vehicles from an OEM through a dealership, instead preferring the convenience of driving a new car “off the lot” that day. But as inventory has decreased over the past several months due to several economic and political factors, many dealerships have reacted by adding additional dealer markups to their stock, often to the tune of thousands of dollars.

If you’re in the market for a new vehicle in 2023, it’s important to arm yourself with the information you need to avoid being fleeced. Don’t take dealer ads at face value: If a new car price seems too good to be true, it probably is.

In this article, we will explain dealer markups, why some dealers started marking up the prices of new vehicles beyond their MSRP, and what you can do about it.

What are Dealer Markups?

A market adjustment or markup is essentially a fee that a car dealership devises to reflect a situation of low supply and high demand. It can range from a few thousand dollars to upward of tens of thousands of dollars on high-end or limited-production vehicles. A dealer tacks these arbitrary amounts onto the MSRP to increase profit on high-demand models.

How to Spot Dealer Markups

Dealer markups can be misleading and sneaky. They may show up under the following terms listed on the label and on your sales invoice:

• Market adjustment
• Additional dealer markup (ADM)
• Additional dealer profit (ADP)
• Adjusted market value

These are the costs to look out for and avoid. Dealer markups often appear as a second window sticker separate from the MSRP. You’ll want to look for a rectangular sheet of paper, often posted near a new vehicle’s official window sticker or elsewhere on the windshield. While this isn’t an official factory sticker, that doesn’t mean that you can request the dealer to waive them. If you are unwilling to pay for these dealer markups, the dealership in question will happily wait for the next unfortunate buyer who will.

Tips for Dealing with Add-Ons or Markups 

Verify the price hikes: If you’ve found a vehicle you’re interested in, call the dealerships ahead of time and ask if it has a markup or is equipped with any dealer add-ons.

Try to negotiate: If the vehicle you have your eye on has a market adjustment, try offering half of its cost. The dealer may counter, but this might save you thousands of dollars.

Order the car: In most cases, a factory-ordered vehicle will not have been marked up. You can get the exact car you want at MSRP with the right dealership. If any dealership insists on adding accessories to a factory-ordered vehicle, we suggest shopping elsewhere.

Ask for ‘Out the Door’ costs: When you’re dealing with dealers over the phone or on the internet, be sure to ask for the ‘Out the Door’ cost – including all taxes and fees – so that dealers cannot change the price later on or claim that you do not qualify for the set price.

Cast a wider net: Not all dealerships will subscribe to a “market adjustment” philosophy. Your goal is to find those dealers and shop with them.

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Marino Chrysler Jeep Dodge Ram believes that our customers deserve honest and transparent pricing and should never pay above MSRP for any Chrysler, Jeep, Dodge, or Ram. Our philosophy of honest pricing and an honest car buying process means that the price our customers see is the price they pay.

Are you in the market for a new vehicle? We’ll make it easy, fast, and fun – the way that car buying should be.

Check out our online inventory of new vehicles at https://www.marinochryslerjeepdodge.net/new-vehicles/ or give our sales team a call at 1-773-794-7811 to set up a test drive.