Dealerships can still advertise vehicles above the Manufacturer’s Suggested Retail Price (MSRP), but there are important rules and transparency requirements they must follow.
Dealer Pricing Above MSRP
- Dealers are allowed to charge and advertise vehicles at prices above the MSRP. This practice, often called dealer markup or market adjustment, is common especially for high-demand or limited supply models.
- These markups appear in different forms such as additional dealer markup (ADM), market adjustment, or dealer profit. They can be significant, sometimes thousands or even tens of thousands of dollars above the MSRP.
Advertising Requirements and Transparency
- While dealers can advertise prices above MSRP, they must clearly and conspicuously disclose any additional fees or markups included in the advertised price. This includes dealer add-ons, delivery fees, or any other costs besides government fees.
- The Federal Trade Commission (FTC) has introduced rules to end “MSRP-only” advertising, which previously allowed dealers to display only the MSRP with disclaimers, obscuring the actual transaction price. Now, every vehicle advertisement must include a specific “offering price,” which reflects the actual price the dealer expects to sell the vehicle for, inclusive of markups and fees.
- Dealers can still list the MSRP on advertisements, but must also show the actual offering price. This rule aims to reduce customer frustration caused by seeing a MSRP that is much lower than the dealer’s real asking price.
Summary
- Yes, dealerships can still advertise vehicles above MSRP.
- They must include all fees and markups transparently in the advertised price.
- New FTC rules require an “offering price” to be shown alongside the MSRP to prevent misleading advertising.
- Consumers should carefully review the “offering price” and any additional fees when considering a vehicle purchase to understand the true cost.
Overall, dealer markups above MSRP are legal and common, but transparency in advertising has increased to help consumers make informed decisions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-dealerships-still-advertise-vehicles-above-the-msrp/
