Car Dealerships Are Adding Thousands to SUVs in “Market Adjustments” – Is It Just a Scam?

If you’ve been looking at purchasing a new SUV, you may have been shocked at the prices you’re finding. Not only are new SUVs in short supply thanks to a global chip crisis, but used SUVs have been impacted as well. This has made new SUV prices insanely high. To make matters worse, some dealerships have started charging a market adjustment, which is a fee over MSRP. Some of these market adjustments can be pretty high, thousands of dollars over the typical cost of the SUV. Is there anything you can do about this, or are you forced to pay whatever dealers want right now?

Gray 2022 Kia Telluride parked in front of a forest
2022 Kia Telluride | Kia

What is a vehicle market adjustment?

RELATED: These Are the Cheapest SUVs to Maintain, According to Kelley Blue Book

A market adjustment is an addition to the MSRP of a vehicle. It can add hundreds to thousands of dollars to the sticker price of the SUV. Some new car dealerships are adding this market adjustment onto the price of SUVs because so many vehicles are in high demand and they can. It’s easy for car dealers to sell cars right now, so it’s easier for them to charge more for SUVs that will sell quickly.

The market adjustment may be thousands of dollars over MSRP. What is the MSRP meaning? It stands for the manufacturer’s suggested retail price. Since it’s suggested and not a set price, dealers have some leeway to make this price higher or lower as they see fit. Some of the SUVs with the highest market adjustments right now include the Kia Telluride and Hyundai Palisade, which are seeing market adjustments up to about $10,000. The Ford Bronco is also often being marked up, due to its new and popular status.

Why are cars and SUVs so expensive right now?

RELATED: These Are the Most Expensive Used SUVs to Maintain

SUVs, cars, and trucks are expensive right now because there aren’t a whole lot of them for sale. There’s a microchip shortage, which is affecting the production of cars and SUVs. That, combined with supply chain issues, is making the number of new cars available low.

On top of that, there are good deals to be had in the form of interest rates and savings for well-qualified buyers has those who can buy a new car looking at what’s available. That’s reducing even further what’s out there. This is also making used SUVs more expensive, since those who may typically shop for a new car are looking toward used.

Are dealerships negotiating right now?

RELATED: 5 Killer Used SUVs Under $5,000 You Can Buy Right Now

Car dealers aren’t negotiating much on price right now. They don’t have much reason to, since there are plenty of people who have no choice but to buy an SUV and will pay MSRP plus a market adjustment. However, U.S. News says there are some things you can do to put yourself in a better position.

Number one, you should be ready to purchase an SUV if you find one that meets your needs and budget. Good SUV deals are rare, and if you find one, you’ll have to act quickly. This means being pre-approved for your loan and being ready to trade in or sell (it may not be a good idea to trade in to the dealer you’re buying from).

One thing you need to be very careful about is spending and borrowing too much money. If the market corrects itself soon, the depreciation of your new SUV will accelerate. You may quickly find yourself upside down in a car loan. If you later want to sell your SUV, or you get into a car accident and receive an insurance payout, you could end up owing money just to part with your vehicle.

RELATED: Is Your SUV One of the Hottest Used Cars Right Now?