What Is a Dealer Market Adjustment? Can You Negotiate a Markup Over MSRP?

Short answer: A market adjustment is an extra amount a dealer adds above the manufacturer's suggested retail price (MSRP), usually on a vehicle that's in high demand. You may see it called a "dealer adjustment," "additional dealer markup" (ADM), or "added mark-up." It's dealer profit, not a manufacturer or government charge. In most states it's legal for a dealer to charge more than MSRP, but it isn't mandatory, so it's negotiable. You can ask to have it removed or reduced, compare written out-the-door quotes from dealers that don't mark up, or wait until demand cools. Some states, such as Texas and California, also require dealers to honor their advertised prices, and Texas requires any dealer markup to be included in the advertised price.

What a market adjustment is

MSRP is the price the automaker suggests. Consumer Reports points out that because it's "suggested," dealers are free to sell a vehicle for more or less than MSRP. Consumer Reports adds that unless a model is in very high demand, you can generally buy a vehicle for less than the sticker price. When a model is new, scarce, or has a waiting list, some dealers instead add an amount above it.

Consumer Reports describes a market adjustment (or dealer adjustment) as an amendment added to the window sticker that can pad "hundreds or even thousands of dollars" over the manufacturer's sticker price. The Georgia Attorney General's consumer office defines it the same way: when a dealer charges more than MSRP to adjust for demand, that's a markup or market adjustment.

It usually lives on a second sticker. The FTC describes the "dealer sticker price" as the factory (Monroney) sticker price plus dealer-installed options, "additional dealer markup or profit," dealer preparation, and pre-installed add-ons. The factory sticker is required by federal law; the dealer's sticker isn't, and every extra line on it comes from the dealer. For how these prices relate, see out-the-door price vs. MSRP vs. invoice.

Names you may see for the same thing:

• "Market adjustment" or "market value adjustment"
• "Dealer adjustment" or "dealer markup"
• "ADM" (additional dealer markup)
• "Added mark-up" (the label California law requires on certain dealer stickers)

A line with a vague name such as "protection package" or "dealer prep" isn't a market adjustment, but it's also a dealer charge. See which dealer add-ons you can refuse.

Is it legal to charge over MSRP?

Generally, yes. The Georgia Attorney General's consumer office says most dealers are legally allowed to charge more than MSRP, since MSRP is only a suggested price. What the law usually regulates is disclosure and advertising, not the size of the markup. A few examples:

• Texas: A state rule (43 Tex. Admin. Code §215.250) says a dealer advertising a sales price must be willing to sell the vehicle at that price to any retail buyer, and that "additional dealership markup, if any" must be included in the advertised price. Only registration, title and license fees, taxes, and other fees expressly allowed by law may be left out.
• California: Vehicle Code §11713.1 requires dealers to sell a vehicle at its advertised total price (with listed exclusions such as taxes, registration, and the document processing charge) while it remains unsold. A dealer sticker showing an asking price above MSRP must say it's the dealer's asking price, show the MSRP, list each added item and its price, and label any remaining difference "added mark-up."
• Georgia: The Attorney General's consumer office says any markup should be identified in all advertisements, online or in person, and that advertising a price that leaves out a markup or other dealer fees is unfair or deceptive under Georgia law.
• Massachusetts: In a 2021 advisory, the Attorney General warned that dealers were refusing to sell at advertised prices and demanding extra "market adjustments," and said it is unfair or deceptive to refuse to sell a vehicle for the advertised price.

At the federal level, FTC staff guidance says the advertised price should be the actual price any consumer can pay, apart from government charges. In a 2024 case, the FTC and the Arizona Attorney General alleged that a dealer used a "contrived 'market adjustment'" to justify charging thousands of dollars more than the advertised price. Rules differ by state, so check your state attorney general's or dealer licensing agency's website. This is general information, not legal advice.

Where the markup shows up

Can you negotiate it?

Yes. Consumer Reports calls the market adjustment fee "not a mandatory charge" and says it's worth asking for a discount. The Georgia Attorney General's office notes that dealers often set markups high expecting buyers to negotiate, and that you can ask the dealer to waive or reduce it, shop elsewhere, or wait for demand to drop. The CFPB lists the vehicle's price among the things you may be able to negotiate.

Be realistic about hot models. Consumer Reports says that on a vehicle that's selling well, the dealer won't have much incentive to work with you. What tends to work:

1. Shop several dealers. Markups are set dealer by dealer. Consumer Reports suggests simply calling dealerships and asking whether they mark up their vehicles; some will say yes and some no.
2. Negotiate the total, not the MSRP or the payment. Consumer Reports advises against starting from MSRP or a monthly payment. Ask each dealer for the itemized out-the-door price by email, so the markup has to appear as a number you can compare.
3. Be willing to wait. Consumer Reports says that if you can wait, sometimes only a few months, these dealer adjustments will usually disappear.
4. Consider a similar model or trim. If one version is in short supply, a close alternative may sell at or below MSRP.
5. Keep the trade-in and financing separate. A markup can be "removed" on paper and quietly made up elsewhere. Agree on the car's price first. See how to negotiate a trade-in separately.

Remember that a markup costs more than its sticker amount. Consumer Reports notes that paying extra up front usually means losing more as the car depreciates, and you're unlikely to get that money back when you sell. If you finance it, you also pay interest on it for the whole loan.

Watch for the swap

If a dealer agrees to drop the markup, check that the total actually falls. Consumer Reports warns that when a price adjustment is removed, a dealer may try to add products such as an extended warranty, nitrogen-filled tires, or rust protection instead. FTC staff guidance says dealers can't suggest an add-on is required when it's optional, or charge for options you didn't agree to. Compare the final out-the-door total to the quote you agreed to, not just the line where the markup used to be.

An illustrative example

These are made-up numbers, not typical prices or markups. They show why you compare out-the-door totals rather than sticker lines.

In this made-up case, Dealer B advertises "no markup" but still adds $1,500 in add-ons, and is $1,300 cheaper anyway. Taxes and government fees would come on top of both. You can only see that by getting every line in writing. Try the numbers in the out-the-door calculator.

A short email to send before you visit

Hi, I'm interested in the [Year Make Model Trim], stock #[number]. Before I come in, could you email me the itemized out-the-door price, including the selling price, any market adjustment or dealer markup, any dealer-installed add-ons, the doc fee, taxes, and government fees? If there's a market adjustment, I'd like to know whether it can be removed. I'm comparing written quotes from a few dealers and can move quickly on the best total. Thanks, [First name]

If the quote comes back with a markup:

Thanks for the quote. I see a market adjustment of $[amount]. I have other quotes for the same model without one. If you can send an updated out-the-door price without the adjustment, and without adding other products in its place, I'm ready to move forward. Thanks, [First name]

For more wording, see how to negotiate a car price by email.

What to say at the dealership

• To ask up front: "Do you add a market adjustment or any dealer markup above MSRP on this model?"
• To push back: "I'm not paying a market adjustment. What's your out-the-door price without it?"
• If they offer to take it off: "Great. Please show me the new out-the-door total, with no other products added."
• If the ad showed a lower price: "Your ad listed this car at $[amount]. Can you sell it to me at the advertised price?"
• Before a deposit: "I'll put down a deposit once I have a signed purchase order with the full price and no market adjustment."

If the dealer won't honor an advertised price

Save the ad (a screenshot with the date), the written quote, and any emails. The Georgia Attorney General's office suggests sending a complaint with a copy of the advertisement and the sales quote to your state's consumer protection office, and you can also report it to the FTC at ReportFraud.ftc.gov. If you signed a purchase order and the dealer later tries to raise the price, Consumer Reports suggests holding firm on the contract and letting the manufacturer know. For a contract dispute, consider talking to a consumer attorney.

Market adjustment checklist

• Read both stickers. Note the factory (MSRP) total and every dealer-added line above it.
• Ask each dealer whether it adds a market adjustment on the model you want.
• Get itemized out-the-door quotes in writing from at least a few dealers and compare totals.
• Screenshot advertised prices and their fine print before you go.
• Ask to remove or reduce the markup, and confirm nothing else was added in its place.
• Don't put down a deposit until you have a signed purchase order with the full price.
• Agree on the price first, then talk trade-in and financing. See whether the dealer's interest rate is negotiable.
• Check the final contract against your written quote before you sign.

FAQ

What is a market adjustment on a car?

It's an amount a dealer adds on top of the manufacturer's suggested retail price (MSRP), usually on a vehicle in high demand. It may be labeled "market adjustment," "dealer adjustment," "additional dealer markup" (ADM), or "added mark-up," and it often appears on a second sticker next to the factory window sticker. It's dealer profit, not a manufacturer or government charge.

Is a dealer market adjustment legal?

Generally, yes. MSRP is a suggested price, and the Georgia Attorney General's consumer office says most dealers are legally allowed to charge more than it. But state advertising laws still apply. Some states, including Texas, California, Georgia, and Massachusetts, require dealers to include markups in advertised prices, honor advertised prices, or both. California also requires a dealer sticker above MSRP to label the difference as "added mark-up." Rules vary by state.

Can you negotiate a market adjustment?

Yes. It isn't a mandatory charge, so you can ask the dealer to remove or reduce it. Consumer Reports notes it can be hard on a hot model, because the dealer has little reason to bend. Your best leverage is written out-the-door quotes from other dealers, some of which may not mark up at all, and the willingness to wait, since these adjustments usually disappear once demand eases.

What does ADM mean on a window sticker?

ADM is commonly short for "additional dealer markup." It's a dealer-added amount above MSRP, usually printed on the dealer's own addendum sticker, not on the federally required factory sticker. Ask what it covers. If it's pure markup, treat it as part of the price you're negotiating.

Can a dealer add a market adjustment after I place a deposit or order?

It depends on what you signed. Consumer Reports explains that a deposit receipt doesn't necessarily lock in the price, while a signed purchase order is a binding contract the dealer has to honor. Before you put money down, get the full out-the-door price and a statement that no market adjustment will be added, in a signed purchase order.

Updated October 26, 2026