How to Sell Above MSRP (The Legal Way)

High demand and low supply will result in higher prices, even prices that exceed MSRP. The question is, may dealers sell above MSRP?

Originally published in May 2021.


The "S" is for Suggested


Today’s topic is prompted by an email message I received from a regular Drop the Bow Tie viewer who wrote:


With the increasing shortage on vehicles we’ve noticed dealers selling cars over MSRP. We’ve also been asked if there is a preferred way to do this. In other words, is it better to have an addendum that includes some perceived value to justify the mark up – or is it okay just to raise the price? Would love to hear your thoughts on this topic.

What that letter suggested is, in fact, true: supply chain disruptions, including chip availability, have reduced the availability of certain models. Other new models, such as the mid-engine Chevy Corvette, are enjoying unusually high demand. And as I recall from ECON 101, high demand and low supply will result in higher prices, even prices that exceed MSRP. The question is, may dealers sell above MSRP?


The short answer is yes, you may sell a vehicle for more than the MSRP. The S, after all, stands for “suggested.” But if it were that easy, I wouldn’t be recording this episode, would I? Here’s where it can get sticky.


State Laws


First of all, it may be illegal in your state to sell a vehicle above MSRP without a supplementary sticker explaining the upcharge. In California, for example, there is an actual statute that says dealers may not sell a vehicle above MSRP unless they affix a supplementary sticker that meets certain requirements, including the term “added mark-up.”


In Connecticut, there is no statute specifically addressing sales above MSRP. At least two court cases, however, have found that selling above MSRP without a supplemental sticker constitutes a deceptive trade practice.


Best Practices for Selling Above MSRP