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Are car dealers allowed to charge more than the manufacturer’s suggested retail price (MSRP) for a new vehicle?

Dear Consumer Ed:

Is it legal for car dealers to charge more than the manufacturer’s suggested retail price (MSRP) for a brand-new vehicle? I went to one dealership that had tacked on $5,000 to the MSRP, and another added $9,000. They said it was based on demand.

Consumer Ed says:

Generally, most car dealers are legally allowed to charge more than the MSRP, given that the MSRP is the manufacturer’s suggested price. When a dealer charges more than the MSRP to adjust for demand, this is known as a markup or a market adjustment. Often, dealers set markups at a higher price with the expectation that consumers will try to negotiate for a lower price. As such, you can try to negotiate the price with the dealer (although the more in demand a vehicle is, the more challenging it may be). If you feel the markup is unfair, you can ask the dealer to waive or decrease it. If your request is denied, you can take your business elsewhere or wait for the market demand to decline.

Although most dealers are allowed to charge above the MSRP, they must clearly and conspicuously include any additional fees (besides government fees) in the advertised price. These additional fees include the price of mandatory options and service packages. Any price markup should be identified in all advertisements for the vehicle, whether online or in person. If a car dealer advertises a price that omits a markup or any other additional dealer fees, mandatory options, or services, it is considered an unfair or deceptive practice in violation of Georgia law.

If you believe a dealership has omitted additional fees in the advertised price, we recommend you consult a private attorney to determine the extent of legal options available to you. You may also submit a complaint with a copy of the advertisement and the sales quote to the Georgia Department of Law’s Consumer Protection Division by going to consumer.ga.gov or by calling (404) 651-8600, or to the Federal Trade Commission at reportfraud.ftc.gov.

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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