Market Adjustment
A market adjustment, also called a dealer markup, is an additional fee dealerships add to the sticker price of a vehicle when demand exceeds supply. Common during times of limited inventory or high popularity of certain models, market adjustments can range from a few hundred dollars to several thousand.
These markups are not set by manufacturers but by dealers seeking to maximize profit. While legal, they are often controversial, as consumers may feel pressured to pay inflated prices for high-demand models.
Dealers justify market adjustments as a reflection of real-world supply and demand. Buyers encountering market adjustments should research availability, consider waiting for supply to stabilize, or negotiate add-ons instead.
Some states require dealerships to disclose market adjustments clearly on window stickers. Ultimately, understanding this fee empowers buyers to push back and avoid overpaying, especially if alternatives are available.
Example
David wants a popular new pickup truck listed at $45,000 MSRP. The dealer adds a $5,000 market adjustment due to high demand, raising the sticker price to $50,000. After researching, David finds another dealer willing to sell the same model at MSRP, saving him $5,000.