Price Gouging

Market Adjustment / ADM

That "$5,000 Market Adjustment" sticker? It's 100% pure dealer profit. They're betting you're desperate enough to pay it.

What Is a Market Adjustment?

The Simple Version

A 'Market Adjustment' or 'ADM' (Additional Dealer Markup) is an extra charge dealers add on top of MSRP when a car is in high demand. Unlike MSRP, which is set by the manufacturer, this is pure dealer profit with zero extra value for you.

The Economics Behind It

When demand exceeds supply (new model launch, chip shortage, etc.), dealers exploit basic economics. They know some buyers will pay above MSRP rather than wait. The adjustment can range from $2,000 to $20,000+ on hot models like the Toyota GR Corolla, Ford Bronco, or any new EV.

Why It's Different From MSRP

MSRP (Fair)

Set by the manufacturer. Represents the intended retail price. Dealer still makes money from holdback, volume bonuses, and F&I.

ADM (Gouging)

Set by the individual dealer. No extra value provided. Pure profit extracted from desperate or uninformed buyers.

The Hidden Damage

Paying ADM doesn't just cost you now—it hurts later:

Instant negative equity: The car is worth MSRP the moment you drive off, not MSRP + ADM
Higher loan payments: You're financing $5,000+ in pure markup plus interest
Insurance costs: Coverage is based on purchase price, not value
Tax hit: You pay sales tax on the markup too (adds $300-600)

Real Numbers

// $5,000 ADM true cost:

Markup: $5,000

Sales tax (7%): +$350

Interest (6% over 60 months): +$800

Total real cost: $6,150

That's $6,150 for NOTHING. The car is worth the same.

How to Avoid Paying ADM

Email multiple dealers (the "blast radius" approach)

Contact 10-15 dealers within a 100+ mile radius. Ask specifically: "Do you sell at MSRP?" Many do—they just don't advertise it.

Place a factory order

Most manufacturers let you order exactly what you want. Dealers are more likely to sell factory orders at MSRP since they're not sitting on floor plan costs.

Wait 3-6 months

Hot models cool off. The $10,000 markup on launch day often disappears within a few months. Patience saves thousands.

Check manufacturer programs

Some brands (like GM with Ultium EVs) have "no ADM" policies. Dealers who violate this can lose allocations. Report violators.

Use Markups.org or community forums

Sites like markups.org track which dealers charge ADM and which sell at MSRP. Model-specific forums often have "MSRP dealer" lists.

Watch Out For These Tricks

"Mandatory accessories package" - Same thing as ADM, just renamed. $2,000 for floor mats, mudflaps, and nitrogen.
"Protection package already installed" - They added $500 worth of products and want $2,500. You can't remove it.
"We're the only one with inventory" - Rarely true. Email other dealers. Drive further if needed.
"The markup covers our costs" - Dealers make money from holdback, bonuses, and F&I. This is extra profit, period.
ADM hidden until you arrive - Always confirm "out-the-door price at MSRP" in writing BEFORE visiting.

Email Template: Finding MSRP Dealers

Subject: [Year] [Model] - MSRP Purchase Inquiry

Hi,

I'm interested in purchasing a [Year] [Model] [Trim]. I'm a serious buyer with financing ready.

Before I visit, I need to confirm: Do you sell at MSRP, or do you add market adjustments / mandatory packages?

I'm contacting multiple dealerships and will purchase from whichever offers the best deal at MSRP. If you have the vehicle in stock or can place a factory order at MSRP, please let me know.

Thank you,
[Your Name]
[Phone Number]

Send this to 10-15 dealers. You'll quickly find out who plays games and who wants to earn your business.

When ADM Disappears

3-6 months after launch: Initial hype dies, inventory builds

End of quarter/year: Dealers need to hit sales targets

When a competitor launches: Attention shifts to the new hot thing

After negative reviews: If the car gets bad press, markups vanish

Quick Script

"I'm not willing to pay above MSRP. If you can sell at sticker, I'll buy today. If not, I'll factory order through another dealer or wait until inventory normalizes. What can you do?"

Ready to make contact?

Use our email templates to contact multiple dealers and find one who sells at MSRP.

Get Email Templates