ADM. No, it's not the newest competitor to Intel. It stands for Adjusted Dealer Markup and it's the greatest and worst thing to ever happen in the car business. When I worked at a Porsche store in 2014, I was hoping that they’d go away, but unfortunately, they are here to stay.
Dealer markups are not new. For decades, car companies would come out with specialty cars and the demand outweighed supply, allowing dealerships - and let’s not forget that dealerships are businesses and usually are not affiliated with the manufacturer - to make a lot of money on certain models. As a business model, it makes sense. As a consumer, it stinks.
Recently, the highly anticipated Supra publicized some outrageous dealer markups. As an enthusiast I empathize with you. It sucks, but it's the price you pay if you want the newest thing and don’t want to wait.
For the dealer, it makes sense. The car business is the only business where a customer can regularly buy something at a financial loss incurred by the seller. In any other business model, the store would go out of business. The dealer needs chances like this to make up for all the cars they give away.
I think the genesis of ADM goes back to the 2000s, when the Porsche introduced the 996 GT3 MKII, while the 996 Turbo was the king of the lineup. The MSRP of a Turbo was $109k, while the MSRP of the 2003 GT3 was $103.5k. There was a waitlist to buy a 911 Turbo, where as GT3s were much easier to get. Oh, how roles have reversed!
The 996 MK1 GT3, didn’t come to the US because Porsche didn’t believe a less for more car would sell. They took a risk and in 2003 brought the GT3 to the states and it quickly became the Driver’s 911.
The car quickly gained a following by people who spent their weekends at race tracks or the local autocross and had followed its success in Europe. At the same time, article after article came out about how wonderful this car was. So you had two groups growing - those that used their GT3s for their intended purpose; trackable street cars, furthering the legend of how wonderful these cars are. And those that were just learning about the GT3 and gushing how capable the GT3 was on their favorite automobile message board.
The legend of the GT3 started as a grassroots movement by people taking $100k cars to a race track to have fun. It's because of these people that the GT3 earned the reputation it has.
Unfortunately, the reputation is so damn deserved that it is being exploited by dealerships, but like I said above, you can’t blame the dealership.
The problem with adjusted dealer mark up is that the people who helped promote the legend of these specialty cars (i.e. Integra Type R) by actually driving them and sharing their gospel, won’t. Not because they don’t want to or can’t, but because to them, cars are meant to be driven.
Instead, these cars are primarily being sold to collectors instead of drivers. The grassroot response is that they buy a Cayman , which is a damn good track chassis, swap in a 911 motor, tune the suspension, add some proper aero and wheels and off they go. Then you saw what happened with the GT4. Funny how that works, right?
Everyone is a race car driver now. Everyone wants to brag about how capable their cars are around the Nurburgring. For those that actually want to track their cars, there will always be options. But for now, armchair race car drivers and the omnipresent automobile news cycle rightfully hype cars to a point where manufacturers and dealers can easily take advantage of the consumer that wants a driver’s car.
Until that ends, there will be plenty of gems that are true drivers cars, but haven’t been hyped to the point of being robbed i.e. the 911T. In my opinion, one of the best cars in the 911 market right now.
What do you think of adjusted dealer markups?