If you have ever tried to buy a luxury vehicle such as a Porsche, there is one term that would come up, ADV markup or dealer ADM (Additional Dealer Markup). For many, though the question remains: Are MOST Porsche dealers marking up ADV? In short: Yes, they can mark it up. — The beat goes on for the more nuanced and interesting reasons why you are being marked up in addition to ways where maybe that does not have to happen. However, I aim to give an all-encompassing guide on dealer pricing strategies and what exactly is this bullshit called the ADM that might help you—the consumer trying just to find your perfect Porsche—at least understand some of it.
Whether looking at a sporty Macan or a sleek 911, you must understand the financial aspects of receiving your next sports car from a dealership. We will reveal the mystery of ADV markups, discuss dealership pricing differences, and provide tips on how to avoid paying over MSRP (Manufacture Suggested Retail Price). In this article, I will break it down to make sure you are well-equipped with guidance on choosing the best course of action.
Key Takeaways
- ADV markup stands for Additional Dealer Markup, often added to the MSRP for luxury vehicles.
- Many Porsche dealerships charge ADV markups due to high demand and limited supply.
- Not all dealerships apply these markups; it depends on location, demand, and dealership policy.
- Strategies such as negotiating or expanding your search radius may help avoid markups.
What Is ADV Markup and Why Do Dealerships Use It?
ADV markup (also called dealer ADM) is an extra charge added to the MSRP we talked about above by car dealerships. Porsche uses this pricing technique, which is called price skimming and is mostly practiced on limited-supply (high-demand) vehicles. This is to take advantage of the consumer demand when inventories are low so dealers can raise profits.
The dealer-added markup for vehicles like Porsches can be in the thousands to tens of thousands of dollars from its original cost. Some of the reasons why dealerships use ADV markups are as follows:-
- Popular models: For example, the high demand for popular Porsche models allows dealers to charge more than MSRP because customers are often willing to pay something extra.
- Limited Quantities: This process allows dealers to sell their inventory as exclusive because Porsche only makes a limited amount of models. And since a little scarcity always helps inflate value, ADV markups also come off as more justifiable to willing buyers.
- Increasing Profit Margins: Delearships are businesses that sell for a living. For certain desirable models—such as the Porsche 911 Turbo or Cayenne—an ADV markup allows dealerships to get top dollar for every vehicle.
However, this isn’t only a pricing strategy by Porsche, as dealership ADM is quite common amongst high-end automotive brands. While this may be effective, it is understandably contentious given the scarcity of certain vehicles and consumer buying habits regarding luxury.
Do All Porsche Dealerships Charge ADV Markup?
Porsche dealers do not charge an ADV markup across the board but, for most stores – particularly in markets where there are more buyers than cars to sell — it is standard practice. Some dealerships will charge an ADV markup, and some won’t.
- Location: Wealthy states and Porsche dealers in Florida can charge more, thanks to lucrative luxury car sales.
- Market Forces: In times of economic growth and stability, the default position is often that the consumer will be willing to pay a premium for something special.
- Dealership Policy: A few dealerships that avoid price gouging seek to establish a reputation for selling vehicles at MSRP or under. These dealerships are in the business of customer retention, not one-time sales gains.
Meanwhile, Porsche dealers in Massachusetts—where competition is tight and prices low due to the wealth of metro Boston-based negotiators willing to travel significant distances for a deal—may not touch an ADV markup at all just so they can keep MSRP as their sales price simply because it will attract more buyers. At the same time, dealerships in affluent urban areas where buyers are willing to pay more money often tack on these extra charges.
How Much Is a Typical Porsche ADV Markup?
The amount of ADV markup can range widely depending on the model and what area the dealership is in. Depending on demand, Porsche dealerships could ask as much as $5k to $ 50k above the MSRP for some models.
For instance:
- The Porsche Taycan can carry a markup of $10,000 – $20,000 due to its popularity as an electric sports car.
- Limited edition models such as the 911 GT3 often see markups well over $50,000.
Here’s a sample table showcasing average ADV markup rates for different Porsche models:
| Porsche Model | Average ADV Markup | Percentage Over MSRP |
| Porsche Taycan | $10,000 – $20,000 | 10% – 15% |
| Porsche 911 GT3 | $40,000 – $50,000 | 25% – 30% |
| Porsche Macan | $5,000 – $8,000 | 5% – 8% |
| Porsche Cayenne | $10,000 – $15,000 | 10% – 12% |
This price variance underscores the importance of researching different dealerships and models before making a decision. Knowing these typical markups can give you leverage during negotiations and help set expectations.
Why Are ADV Markups Controversial?
Even if ADV markups might be essential to max bonus at a dealership, they are still taboo in the eyes of some consumers. Here is why a lot of car shoppers are furious over these extra fees:
- Price Disparity: When you buy a car, consumers usually expect prices to be close to what’s advertised as the MSRP. On the other hand, while we understand that ADV markups increase final cost and can feel like a ripoff… especially to faithful Porsche-loving book readers.
- Variable Costs: Due to the variance in ADV markups, a Porsche can cost you all manner of amounts. A buyer will be quoted one price and then hit with the HIGHER costs at the dealership, this could cause massive headaches for consumers.
- Greedy Consumer Perception: ADV markups are often seen as an act of greed by the dealership and will sway buyers to shop elsewhere. This is another area that can tarnish the dealer’s name and leave less customer retention.
That said a lot of dealerships claim these markups are what the car is really worth. Since the market dictates the selling price of a product, ADV markups are really just an indicator of the validity of what consumers would actually pay for one.
How to Avoid Paying ADV Markup at Porsche Dealerships?
ADV markups territory: a hard place to avoid paying over MSRP These strategies can be used to decrease or even remove these additional costs.
- Search as far and wide: Think beyond the walls of your city. Smaller dealerships or those in not-so-affluent locations will likely pass on any additional mark-ups.
- Haggle: Markups are most cheap, not absolute. This can even involve some negotiation with dealerships, especially if the dealership has inventory they must offload.
- Be Patient: Do not buy during times of peak demand. It is recommended to purchase vehicles when new models are released or during the off-season, as the dealers at these times may be more interested in sales.
- Befriend a dealer: Befriending the right person could also pay off in smaller markets. Dealers are willing to forgo marking up the vehicle more often with repeat and favored customers.
The good news is there are still Porsche dealerships without their foot on the neck of an outrageous ADV markup—especially if you’re patient, dedicated, and willing to travel. Many times it is due to the nature of things, like always being on top of information ready to be proactive, and knowing everything you can about buying.
Porsche Dealerships and Regional Differences in ADV Markup
Unfortunately, whether a Porsche dealership tacks on an ADV markup is dependent ideally on regional differences. For example, the high disposable incomes and luxury vehicle demand in Florida tend to drive up ADV markups. On the flip side, a dealer in an area with less disposable income and not as many people may decide to price at MSRP or even lower depending on their sales approach.
Porsche Dealers in Florida
In Florida in particular, high demand for exclusive models also leads many Porsche dealerships to slap on an additional markup. More often than not, this area that is home to a robust luxury vehicle market has prices even higher for every brand of cars at the top end.
Massachusetts Porsche Dealers
If they do end up on those lots, Porsche dealerships in Massachusetts might not be charging a similar markup to their brethren down in Florida. For one, Massachusetts has fewer luxury car buyers than the moneyed enclaves of Florida and consequently feels less overall pricing pressure.
Unsurprisingly, the most expensive dealer-serviced regions are in parts of California and Florida with high concentrations of Porsche dealers. Times where some buyers have gone out of state to save a few thousand on the car they want.
Conclusion
If you are in the market for a luxury vehicle, it is important to understand dealer ADV markup. Yes, some Porsche dealers really are marking up ADVs to take advantage of hot demand and easy-to-mow-down supply – but there is no law decreeing you have to pay a premium like this. If you look far and wide, check into local pricing variances and know how to bargain. When it comes time to buy your dream car you could be shelling out a fair price.
How about you: Any Porsche dealership markup war stories to share? Do you believe that the higher cost is justified, or would you rather just wait for one of these more advantageous agreements to arrive? Tell us what you think, and check out our other automotive insights for tips on purchasing high-end vehicles!