What is the Average Car Dealer Markup Fee

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The CarsDirect editorial team is dedicated to providing our readers with the latest on new and used cars, expert opinions on which vehicles make the grade, and all the fun stuff in between.


, - July 14, 2021

The average dealer markup fee on a car is typically determined by local pricing and demand. In normal circumstances, cars & trucks can be purchased for MSRP or less, especially with the help of manufacturer incentives. However, you may encounter cases in which limited availability can necessitate paying well over MSRP.

A dealer markup shouldn't be confused with the dealer's average profit on a vehicle. Most new cars have a dealer invoice price and an MSRP, and the margin between these prices helps determine how much a dealer makes on a car. Marketing fees, dealer holdback, and other factors can also impact what the dealer's cost is on a car.

The only real way to know the average price for a car in your area may be to check prices with multiple dealers. While online sites (including CarsDirect) do offer estimates and insights into what prices buyers are paying, odds are that your local dealer will be in the best position to tell you what the car you want is selling for.

Models that we find often have a markup include the Chevy Corvette, Honda Civic Type R, Hyundai Palisade, and Kia Telluride. However, markups could be especially severe in the event of an inventory shortage. In some cases, this can result in even mainstream models like the Toyota Corolla having as much as a 23% markup.

Fortunately, there are ways to avoid paying a dealer markup. Taking advantage of manufacturer incentives can help ensure you get the best deal possible, especially when taking advantage of loyalty discounts and bonuses when coming from a competitor. We recommend exploring all your options to get the lowest price possible.

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The CarsDirect editorial team is dedicated to providing our readers with the latest on new and used cars, expert opinions on which vehicles make the grade, and all the fun stuff in between.


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