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Car Models With the Highest & Lowest Markup for January

Highest Lowest Markup

Highest Lowest Markup

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.

Car Models With the Highest Markup for January

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

January Highest Markup

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

Ford F-250 Super Duty

  • MSRP: $47,210
  • Market Price: $96,507
  • Invoice Price: $44,849
  • Markup Amount & Percentage: $49,297 or 204% of MSRP

Compare Ford F-250 prices and trims here >> 


#2 Highest Markup: Ford F-350 Super Duty Lariat

Ford F-350

  • MSRP: $48,735
  • Market Price: $78,870
  • Invoice Price: $46,299
  • Markup Amount & Percentage: $30,135 or 162% of MSRP

Compare Ford F-350 prices and trims here >>


#3 Highest Markup: Ford F-150 XLT

2021 Ford F-150

  • MSRP: $35,050
  • Market Price: $55,828
  • Invoice Price: $32,772
  • Markup Amount & Percentage: $20,778 or 159% of MSRP

Compare Ford F-150 prices and trims here >>


#4 Highest Markup: Ford Bronco Base

  • Ford BroncoMSRP: $28,500
  • Market Price: $45,237
  • Invoice Price: $28,073
  • Markup Amount & Percentage: $16,737 or 158% of MSRP

Compare Ford Bronco prices and trims here >>


#5 Highest Markup: Volvo XC40 T4 Inscription

2021 Volvo XC40

  • MSRP: $39,450
  • Market Price: $58,804
  • Invoice Price: $37,083
  • Markup Amount & Percentage: $19,354 or 149% of MSRP

Compare Volvo XC40 prices and trims here >>

Car Models With the Lowest Markup for January

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

January Lowest Markup

#1 Lowest Markup: Genesis G70 3.3T

Genesis G70

  • MSRP: $48,200
  • Market Price: $40,300
  • Invoice Price: $46,056
  • Markup Amount & Percentage: $7,900 or 84% of MSRP

Compare Genesis G70 prices and trims here >> 


#2 Lowest Markup: RAM 2500 Laramie Longhorn

RAM 2500

  • MSRP: $57,080
  • Market Price: $48,552
  • Invoice Price: $53,172
  • Markup Amount & Percentage: $8,528 or 85% of MSRP

Compare RAM 2500 prices and trims here >> 


#3 Lowest Markup: Hyundai Venue Denim

2020 Hyundai Venue

  • MSRP: $22,050
  • Market Price: $18,845
  • Invoice Price: $21,358
  • Markup Amount & Percentage: $3,205 or 85% of MSRP

Compare Hyundai Venue prices and trims here >> 


#4 Lowest Markup: RAM 1500 Limited

2021 RAM 1500

  • MSRP: $56,050
  • Market Price: $48,557
  • Invoice Price: $51,246
  • Markup Amount & Percentage: $7,492 or 87% of MSRP

Compare RAM 1500 prices and trims here >>


#5 Lowest Markup: Hyundai Kona SEL

2020 Hyundai Kona

  • MSRP: $23,600
  • Market Price: $20,738
  • Invoice Price: $22,576
  • Markup Amount & Percentage: $2,861 or 88% of MSRP

Compare Hyundai Kona prices and trims here >>

What Is the Markup on New Cars?

What is MarkupThe 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?

What is Average MarkupThe 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?

Why Do Vehicles Have High MarkupLooking 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?

Should I WaitWaiting 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.

Highest Markup Truck

2021 Ford F-250 Super Duty Lariat

Ford F-250 Super Duty

  • MSRP: $47,210
  • Market Price: $96,507
  • Invoice Price: $44,849
  • Markup Amount & Percentage: $49,297 or 204% of MSRP

 


Highest Markup SUV

2021 Ford Bronco Base

Ford Bronco

  • MSRP: $28,500
  • Market Price: $45,237
  • Invoice Price: $28,073
  • Markup Amount & Percentage: $16,737 or 158% of MSRP

 


Highest Markup Sedan

2021 Cadilac CT-5 V Series

Cadillac CT5

  • MSRP: $47,795
  • Market Price: $62,206
  • Invoice Price: $45,405
  • Markup Amount & Percentage: $14,411 or 130% of MSRP

Lowest Markup Truck

2021 RAM 2500 Laramie Longhorn

RAM 2500

  • MSRP: $57,080
  • Market Price: $48,552
  • Invoice Price: $53,172
  • Markup Amount & Percentage: $8,528 or 85% of MSRP

 


Lowest Markup SUV

2021 Hyundai Kona SEL

2020 Hyundai Kona

  • MSRP: $23,600
  • Market Price: $20,738
  • Invoice Price: $22,576
  • Markup Amount & Percentage: $2,861 or 88% of MSRP

 


Lowest Markup Sedan

2021 Gensis G70 3.3T

Genesis G70

  • MSRP: $48,200
  • Market Price: $40,300
  • Invoice Price: $46,056
  • Markup Amount & Percentage: $7,900 or 84% of MSRP

Final Words on Market Adjustment

Final Words MarkupMany 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.