Cadillac, along with many other automakers, is currently suffering from a lack of vehicle inventory at dealer level due to the ongoing shortage of microchips, along with other supplier issues. While the American luxury brand prioritized the production of its most popular vehicle, the Cadillac Escalade, above the rest of its lineup, it didn’t make enough units to meet customer demands. Some dealers, having seen and understood this situation, have taken advantage of this low demand and high demand scenario and charge more than MSRP for Escalade.
Referred to by the dealer as “market adjustment fee”, “dealer adjustment markup”, “dealer adjustment fee”, or “additional”, this markup is justified by the seller as a reflection of the fair market price. In fact, dealers are asking for anywhere from $5,000 to $10,000 above MSRP for the new Cadillac Escalade while others have gone to extremes.
For example, Brotherton Cadillac in Washington state is asking for $154,635 for the 2022 Escalade Sport Platinum – that’s $40,000 on top of the $144,635 MSRP.
Others are asking for $25,000 on top of MSRP, like the Cadillac Escalade Premium Luxury Platinum with an asking price of $132,300 in Delawareand another one in Florida for $127,315.
Implementing exorbitant upcharges for new Cadillac vehicles is certainly not a recent phenomenon, nor is it exclusive to the Cadillac Escalade. Earlier this year, Cadillac’s parent company, General Motors, issued a warning to dealerships about the practice. In a letter from GM North America President Steve Carlisle, dealers are reminded that they are “obliged to sell ethically and legally” [Cadillac] products” and that charging through the MSRP was an “unethical sales practice” that could damage the reputation of Cadillac and GM. It should be noted that prior to his promotion to head of GM North America, Carlisle served as Global President of Cadillac.
It should be noted that there is currently no legal way for GM or Cadillac to regulate the prices set by dealers, as dealers are independent businesses (resellers) who set their own prices, after purchasing the product from the automaker. However, Carlisle threatened to take action against dealers caught doing this practice by shifting the allocation of vehicles.
The Cadillac Escalade is already experiencing an MSRP increase for the 2022 model year, as most models in the trim level hierarchy get the Super Cruise semi-autonomous driving assistant as standard equipment. Prior to the change, the feature was optional.
However, not all Cadillac dealers charge the fees mentioned above
Want to stay up to date on all things Cadillac? Then make sure to subscribe Cadillac Society for Cadillac Escalade news and round-the-clock Cadillac news coverage. We also invite you to join the latest discussions on our Cadillac forums.