How Dealer Markups Actually Work — And How to Avoid Them

Every new car has an official sticker price, the MSRP, set by the manufacturer and printed on the window label. But the price a dealer asks can be higher, sometimes by a few hundred dollars, sometimes by several thousand. That extra amount is a dealer markup.

What a markup looks like

Markups usually show up on a second sticker next to the official one, labeled "market adjustment," "ADM," or "ADP." Some dealers bundle them with add-ons like nitrogen-filled tires, paint protection, or a "value package."

Whatever it's called, a markup isn't a real cost. It isn't shipping, a tax, or a government fee. It's extra profit, and the dealer picks the amount.

Markups are legal, but they aren't required, and they're usually negotiable.

Why some cars get marked up

Markups follow demand, not cost. Dealers add them to cars that are popular and hard to find, like certain full-size trucks, high-end trims, and limited models. Many everyday sedans and crossovers sell at or near sticker price.

If you see a markup on a common car, the dealer may just be testing whether you'll push back.

How to spot a markup you shouldn't pay

A few signs a markup isn't justified:

• The dealer has several of the same trim on the lot.
• The car has been sitting unsold for a while.
• Other dealers, nearby or a few states away, sell the same car at sticker price.

If you can find the same car at sticker price somewhere else, the markup is just a number the dealer hoped you wouldn't question.

How LEVR helps

Markups work because most buyers only see the one deal in front of them. LEVR searches matching inventory nationwide and negotiates with dealers for you, so you're never stuck with one dealer's number.

You pick the exact make and model. If we can't bring you at least one real offer below the full sticker price (Total SRP) within 30 days of your search going live, you get your $699 back.