What Does “Dealer Markup” Mean?

Finding a new vehicle suitable for your needs nowadays is tricky, but it is even tougher to strike a good deal when buying it. The current market favors the seller. As such, you should be vigilant to avoid car sellers who treat the market like a winning lottery ticket. These sellers add thousands of dollars in dealer markups and mandatory add-ons to the MSRP (manufacturer’s suggested retail price) to increase their profits. 

A dealer markup is also known as the market adjustment fee. It is the amount a dealer adds to your vehicle’s price based on the demand and supply of vehicles. The dealer markup is thus a selling price above the car maker’s MSRP. In extreme cases, the fee will range from a few hundred dollars to a doubling of your car’s price. The dealer markup fee has been controversial for decades, but some sellers insist it is required to make up for losses made on other sales.

Where Can You Find the Dealer Markups Information?

By law, the window sticker for a new car for sale should display its MSRP. The dealer markup will often be included as a second sticker price. At times, the markup comprises the cost of add-ons like seat protection, pin stripping, nitrogen-filled tires, undercoating, and VIN etching done by the dealer.  

With most dealer lots currently empty because of supply chain disruptions and semiconductor chip shortages, car shoppers have little to no room to negotiate the dealer markup. In the past, buyers often settled for used cars when the selling price became too high. Unfortunately, this is not an option nowadays because the demand for used cars has also increased, thus increasing their costs. 

Do You Have to Pay a Dealer Markup? 

Markups are almost all but unavoidable at this point. Some high commodity vehicles you are almost certain to pay a hefty markup on. My philosophy in life is that you don’t know unless you ask.. So, why not try to negotiate those markups?

Question every line item in detail… great dealerships will work with you and help you get the best deal they can offer. Stealerships won’t. Be ready to walk! You can always find a better place to shop, that will work for you. 

How Can You Fight Back Against Dealer Markups? 

You can fight back against dealer markups by researching your options and knowing your dream car’s MSRP beforehand. You can then shop around in multiple online dealerships to find one with the lowest possible price. However, this option might not always work because the majority of dealers do not disclose their markups online. You might be surprised when you walk into their dealerships with your pre-approval only to get a higher selling price. 

In early 2022 Markups.Org was founded with the sole purpose of illuminating the free market and pressuring the automotive industry to be competitive. Customers can report stealerships that bait customers by advertising new cars for sale at MSRP, only to find hidden fees, add-ons, markups when they arrive. The site crowdsources information to gather data on dealers with and without markups. With its simple spreadsheet-style user interface, Markups.org makes it easier to search and/ or filter dealerships, so you can avoid stealerships and have a good shopping experience at an honest dealership. 

The ultimate leverage shoppers currently have is Markups.Org. Share your experience while car shopping with our audience. The more dealerships and vehicles we collect data on, the better consumers can navigate their local dealerships. 

Don’t Give Up 

You might give up after a bad experience… but we encourage you to stay with it. There are plenty of dealerships out there right now that are working hard to provide you with the support you need to get a good vehicle at MSRP.  

Armed now with the information above, you can have confidence in how best to avoid dealer markups that will significantly increase your vehicle’s bottom line.  

Check out the dealerships and stealerships near you: https://bit.ly/Markups-ViewListings 

And make sure to share your experience by posting new markups listings: https://bit.ly/Markups-AddNewListing 

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