What Is a Dealer Markup?
A dealer markup, also called ADM (Additional Dealer Markup) or a market adjustment, is an extra charge a dealership adds to the MSRP of a vehicle. It appears on a supplemental sticker next to the factory window sticker, and it goes directly to the dealership's bottom line.
Markups became widespread during the vehicle inventory shortages of 2021 through 2023 when demand far exceeded supply. Dealers charged $2,000 to $10,000 or more above MSRP on popular models, and buyers paid it because alternatives were scarce.
Inventory has improved significantly since then, but markups have not disappeared. They have shifted to specific models: new launches, limited production vehicles, hot-selling trucks and SUVs, and anything with a waitlist. If you are shopping for one of these vehicles, you need to know how markups work and how to avoid them.
ADM vs Market Adjustment: What Is the Difference?
Nothing. They are the same thing with different labels. "ADM" is the traditional industry term. "Market adjustment" became popular during the inventory crisis because it sounds like a natural economic response rather than an arbitrary price increase.
Some dealers also use terms like "dealer premium," "market value pricing," or "adjusted market value." Regardless of the name, the effect is the same: you pay more than the manufacturer intended, and the entire premium goes to the dealer.
How to Spot a Markup Before You Arrive
The worst time to discover a markup is when you are sitting in the finance office ready to sign. Here is how to identify markups before you waste a trip:
Check the Online Listing
Many dealers list their asking price on their website, Cars.com, or Autotrader. If the listed price is above the MSRP shown in the vehicle details, that difference is a markup. Some dealers are transparent about it; others bury it in the fine print or only reveal it during the sales process.
Ask for the Out-the-Door Price in Writing
Before visiting any dealer, email or call and ask for the total out-the-door price on the specific vehicle you want. If the price significantly exceeds MSRP plus taxes, registration, and standard dealer fees, ask them to itemize every charge. A markup will show up as a line item.
Look for the Addendum Sticker
When you visit the lot, check the window for two stickers. The factory Monroney sticker shows the MSRP. A second sticker (the addendum) shows dealer-added items and any markup. If you see "Market Adjustment: $3,000" or "Additional Dealer Markup: $5,000" on the addendum, that is pure dealer profit above the manufacturer's price.
Watch for Hidden Markups in Add-Ons
Some dealers disguise markups as mandatory add-on packages. Instead of listing a $3,000 ADM, they install $500 worth of accessories (paint protection, wheel locks, door edge guards) and price them at $3,000. The effect is the same, but it looks more justified on paper. Always ask what each line item costs and whether you can decline it.
Which Vehicles Get Marked Up the Most?
Markups tend to appear on vehicles with these characteristics:
- New model launches (first year of a redesign or new model)
- Limited production vehicles (special editions, performance variants)
- High-demand trucks and SUVs (especially full-size trucks and three-row SUVs)
- Popular EVs with tax credit eligibility
- Vehicles with factory allocation constraints (dealers receive limited quantities)
In the NJ and tri-state market, you will commonly see markups on vehicles like the Toyota RAV4 Prime, Honda Civic Type R, Ford Bronco Raptor, and certain luxury models with limited allocation.
Vehicles sitting on dealer lots for 30 or more days almost never have markups. If a dealer is trying to mark up a vehicle that has been in inventory for two months, they are testing your willingness to pay rather than responding to real scarcity.
How Much Do Markups Cost?
Markup amounts vary widely depending on the vehicle and market conditions:
- Moderate demand vehicles: $1,000 to $3,000 ADM
- High demand vehicles: $3,000 to $7,000 ADM
- Limited production / specialty: $5,000 to $15,000+ ADM
On a $45,000 vehicle with a $5,000 markup, you are paying an 11% premium above MSRP for a vehicle the manufacturer priced at $45,000. If you finance that markup over 60 months at 6% APR, it costs you about $5,800 total. That is real money for nothing more than dealer profit.
5 Strategies to Avoid Paying a Markup
1. Shop Multiple Dealers
The most effective strategy. Not every dealer marks up the same vehicle. Call or email five to ten dealers within a 100-mile radius and ask for their price on the exact vehicle you want. You will likely find at least one selling at MSRP.
2. Be Flexible on Configuration
Markups are highest on the most popular color and trim combinations. A $5,000 markup on a white Toyota RAV4 Prime SE might drop to zero on a blue one. If color or specific options are not critical to you, flexibility saves money.
3. Factory Order
Many manufacturers let you order a vehicle built to your specifications through a dealer. Factory orders typically lock in MSRP with no markup. The trade-off is waiting 8 to 16 weeks for delivery, but you get exactly what you want at the price the manufacturer intended.
4. Wait
Markups shrink as inventory improves and hype fades. A vehicle with a $5,000 markup at launch may sell at MSRP or below six months later. If you are not in a rush, patience is the cheapest negotiation tactic.
5. Use a Broker
A broker like Vantage has relationships with dozens of dealers across the region. We know which dealers mark up and which do not. We can source the vehicle you want at MSRP or negotiate the markup down, often faster than you could do it by calling dealers yourself.
"The Markup Is Non-Negotiable"
Dealers will often present the markup as a firm, non-negotiable addition. Some genuinely hold firm on hot models because the next buyer will pay it. But many will negotiate, especially if the vehicle has been on their lot for more than a few weeks or if they are trying to hit a monthly sales target.
Your leverage increases when you have a competing offer from another dealer at a lower price. Show them the quote and ask them to match or beat it. If they will not budge, walk. There is always another dealer.
Manufacturer Pushback on Markups
Several manufacturers have taken steps to discourage markups. Ford, GM, and Hyundai have all warned dealers that excessive markups could affect future allocation. Some brands track transaction prices and flag dealers who consistently sell above MSRP.
However, enforcement is inconsistent. Manufacturers need their dealer networks, so penalties are rare. The most effective check on markups is still consumer behavior: if buyers refuse to pay markups, dealers stop charging them.
What Vantage Does About Markups
We track pricing and markups across the NJ and tri-state dealer network for every major brand. When a client wants a vehicle that is commonly marked up, we already know which dealers are selling at MSRP and which are not. That saves you hours of phone calls and dealership visits.
If a markup is unavoidable on a specific vehicle, we will tell you. We would rather be honest about pricing than promise something we cannot deliver. But in most cases, we can find the vehicle at MSRP or negotiate the markup down significantly through our dealer relationships.
What Is the Catch?
Vantage charges a broker fee for our services. On a vehicle where we save you $3,000 to $5,000 in markup avoidance, our fee is a fraction of those savings. We disclose the fee upfront, and you always know the total cost before committing. If we cannot save you money on a particular vehicle, we tell you that directly.
The Bottom Line
Dealer markups are not going away, but you do not have to pay them. Shop multiple dealers, be flexible, and always get pricing in writing before visiting. If a dealer will not give you a straight answer on pricing, that is your signal to look elsewhere.
Want to skip the markup game entirely? Get your free quote from Vantage in 5 minutes and we will find the vehicle you want at a fair price. No spam. No pressure. Unsubscribe anytime.
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