Car Models With the Highest & Lowest Markup for September

September 6, 2021

John Goreham is a life-long car nut and recovering engineer. John’s focus areas are technology, safety, and green vehicles. In the 1990s, he was part of an academic team that built a solar-electric vehicle from scratch. His was the role of the battery thermal control designer. After earning his engineering degree, John also completed a marketing program at Northeastern University. For 20 years, he applied his engineering and sales talents in the worlds of semiconductor manufacturing, biopharmaceutical production, and automotive electronics supply chain. Always a writer, John has published numerous articles in technical journals such as Chemical Processing Magazine. In 2008 he retired from that career and dedicated himself to chasing his dream of being an auto writer. In addition to online publications such as Car Talk, John’s work has appeared in print in dozens of American newspapers, and he provides reviews to many vehicle shopping sites.

The recent COVID pandemic coupled with work stoppages and a never-ending boom-bust cycle for semiconductors has wreaked havoc on the U.S. auto market.

The result is that a shortage of vehicles is driving the value of used cars up, and new vehicle prices are being marked up dramatically by dealers.

The most commonly-used phrase for the dealer markups is a vehicle “Market Adjustment.” Some people are paying these higher prices. Others are opting not to and are waiting out the crisis.

Table of Contents

Car Models With the Highest Markup for September
Car Models With the Lowest Markup for September
What Is the Markup on New Cars?
- What Is The Average Dealer Markup?
Why Pay More Than MSRP?
Why Do Vehicles Have a High Markup?
- Should I Wait?
Highest Markup Truck
- 2021 Ford F-250 Super Duty Lariat
Highest Markup SUV
- 2021 Volvo XC40 Inscription
Highest Markup Sedan
- 2021 Honda Clarity Base
Lowest Markup Truck
- 2021 RAM 1500 Limited
Lowest Markup SUV
- 2021 Buick Encore Preferred
Lowest Markup Sedan
- 2021 Toyota Camry Hybrid XSE
Final Words on Market Adjustment
Best Car Deals by Category

Car Models With the Highest Markup for September

When popular models overlap with limited production ability, the market adjustments are the most extreme.

#1 Highest Markup: Ford Bronco Base

MSRP: $28,500
Market Price: $50,090
Invoice Price: $28,073
Markup Amount & Percentage: $21,590 or 176% of MSRP

Compare Ford Bronco prices and trims here >>

#2 Highest Markup: Ford F-250 Super Duty Lariat

MSRP: $47,210
Market Price: $81,918
Invoice Price: $44,849
Markup Amount & Percentage: $34,708 or 174% of MSRP

Compare Ford F-250 prices and trims here >>

#3 Highest Markup: Honda Clarity Base

MSRP: $33,400
Market Price: $53,946
Invoice Price: $32,028
Markup Amount & Percentage: $20,546 or 162% of MSRP

Compare Honda Clarity prices and trims here >>

#4 Highest Markup: RAM 1500 Tradesman

MSRP: $32,245
Market Price: $51,481
Invoice Price: $30,899
Markup Amount & Percentage: $19,236 or 160% of MSRP

Compare RAM 1500 prices and trims here >>

#5 Highest Markup: Ford F-150 XL

MSRP: $28,940
Market Price: $45,516
Invoice Price: $27,638
Markup Amount & Percentage: $16,576 or 157% of MSRP

Compare Ford F-150 prices and trims here >>

Car Models With the Lowest Markup for September

Not every model is seeing five-figure markups. In many cases, the markups are more reasonable.

#1 Lowest Markup: RAM 1500 Limited

MSRP: $56,050
Market Price: $51,481
Invoice Price: $51,246
Markup Amount & Percentage: $4,568 or 92% of MSRP

Compare RAM 1500 prices and trims here >>

#2 Lowest Markup: Buick Enclave Preferred

MSRP: $40,000
Market Price: $37,392
Invoice Price: $38,160
Markup Amount & Percentage: $2,607 or 93% of MSRP

Compare Buick Enclave prices and trims here >>

#3 Lowest Markup: Hyundai Tucson Limited

MSRP: $30,800
Market Price: $28,944
Invoice Price: $29,274
Markup Amount & Percentage: $1,855 or 94% of MSRP

Compare Hyundai Tucson prices and trims here >>

#4 Lowest Markup: Toyota Camry Hybrid XSE

MSRP: $32,720
Market Price: $31,112
Invoice Price: $30,102
Markup Amount & Percentage: $1,607 or 95% of MSRP

Compare Toyota Camry Hybrid prices and trims here >>

#5 Lowest Markup: RAM 2500 Power Wagon

MSRP: $53,535
Market Price: $51,481
Invoice Price: $49,963
Markup Amount & Percentage: $2,053 or 96% of MSRP

Compare RAM 2500 prices and trims here >>

What Is the Markup on New Cars?

The markup on new cars is a way for dealers and manufacturers to make more money on each vehicle they sell during this period of unusually constricted supply. Dealers have relatively fewer vehicles to sell to a market that was in some sense shut down for a period of time.

That built-up demand of buyers who did not purchase on their normal schedule coupled with the shortages of semiconductors and batteries is putting dealers in the catbird seat when it comes to pricing.

It is important to step back and realize that the “free market” we employ in America means that scarce goods can be priced higher. The converse is also true. Chevy dealers were discounting new Bolts by nearly $20,000 as recently as March of this year.

What Is The Average Dealer Markup?

The average dealer markup is hard to determine since it's based on local pricing, demand, and inventory. However, it’s worth noting that the average transaction price has gone up in the past couple of years. According to COX Automotive, the average transaction price was $1,764 below MSRP in 2020 versus $2,286 below MSRP in 2019.

In some cases, popular vehicles like the Toyota RAV4 Prime have a markup of $10,000, $20,000, or in rare cases, $30,000 over the manufacturer’s suggested retail price.

Couple that with the inventory shortage due to the COVID pandemic, and it comes as no surprise that the average dealer markup will go up as well.

On average, 3-8% over the invoice price is a fair offer for a new car. However, you should check the average market prices to see what others have been paying for your desired vehicle.

Why Pay More Than MSRP?

MSRP is just a starting point for vehicle pricing. Prior to COVID, markups on rare or very popular models were not unheard of.

People purchased these desirable vehicles at above the manufacturer’s suggested retail price because they felt the vehicle was worth the markup. The same holds true today.

Why Do Vehicles Have a High Markup?

Looking more deeply into the market situation, there is a bit more going on than just “shortages mean higher prices". The U.S. economy is shifting in a way it hasn’t before.

Prices for many goods and services are rapidly escalating. Anyone who has priced a home renovation this year knows this to be true. The value of existing homes has also gone up dramatically over the past year to 18 months. In addition, gasoline has gone up by more than 40% in many parts of America in the past year.

Call it inflation, or use another term, the fact is that the cost of many things is headed up rapidly today.

Should I Wait?

Waiting would be a good option if the dealer markups were simply a result of one predictable factor. However, as the 2021 model year ends and new 2022 model year vehicles arrive, manufacturers have a chance to raise prices, and we suspect many will do so. This makes waiting for a game that may never have an ending.

Opting for a used vehicle is a hard choice to make as well. With many models selling for prices higher than the cost of that model new, buying a used vehicle in this climate is a hard pill to swallow.

Waiting for six months if you still have a viable vehicle is a move that seems prudent. If you can repair or maintain your vehicle to get through the coming winter, the spring may be a better market for both new and used vehicles. This assumes that COVID doesn’t push us out of our manufacturing jobs again.

Final Words on Market Adjustment

Many articles you may find on the subject of today’s vehicle prices try to oversimplify the situation. “It’s the semiconductor shortage” is a common theme. “It’s because auto factories were shut down”, is another. “It’s because people didn’t shop during COVID,” yet another common refrain. Some people even try to pin the situation on one politician or one party.

Having covered vehicle pricing for a decade and having spent two decades working in the semiconductor manufacturing industry, it is apparent to this vehicle expert that no one reason is to blame for today’s vehicle price markups. This unusual market disruption is a combination of many effects, all of which are in one way or another COVID-related. COVID isn’t over, but most of America is back to work, and in many cases, we are all working harder than ever.

Inflation has a definition when it comes to economics. If home prices, energy prices, and vehicle prices are any measure, inflation is headed up at a steep rate. Dealer markups a.k.a. market adjustment pricing is just one of many new normals we hope will reverse course at some point soon.