Unreasonable Dealer Markups

[ZeroTX]

Record low sales are because of low supply, not low demand. Also not every dealer is a thief. Many dealers are, can, and will sell for a reasonable price. Unfortunately in this current climate MSRP is considered reasonable. Also keep in mind that a lot of the cars that get these stupid high are also high demand cars, like the GT500, C8, Bronco, etc.

Yeah, I get it. A lot of dealers shot themselves in the foot marking up 2021 Mustangs and now there's a glut of them on the market and nobody in their right mind is paying MSRP for a last-year's model. They are discounting them.

As far as the whole high-demand thing.... You'd think of all people Ford would understand that when there's more demand, you build more.... there should never be a customer and no product. Ever. That's terrible business.

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[Strokerswild]

As far as the whole high-demand thing.... You'd think of all people Ford would understand that when there's more demand, you build more.... there should never be a customer and no product. Ever. That's terrible business.

YES.

Between the GT500 ADM situation, not being able able to order a Bronco for the foreseeable future, and issues with my 2-year-old F150 as icing on the cake, Ford is doing a pretty good job of driving this long-time customer elsewhere.

 

[ZeroTX]

YES.

Between the GT500 ADM situation, not being able able to order a Bronco for the foreseeable future, and issues with my 2-year-old F150 as icing on the cake, Ford is doing a pretty good job of driving this long-time customer elsewhere.

Unfortunately not just Ford. The obscene prices they're charging for C8's is another example. IT IS NOT A LIMITED PRODUCTION CAR. They can literally make as many as they can sell.... and dealers are raping people for 2x price of a "base" C8.

 

[aham23]

2021 Mach 1. Just got this email today…
—
Good morning. The mach 1 We have available is $15k over sticker. We do also have 2 otheres that are $10k over sticker.

Xxx
Russ Milne Ford Inc.
New and Pre-Owned Vehicle Sales
—

Ford can’t do crap about the dealers. These folks are in their backyard. Lol.

 

[Roger Blose]

No ADMs why......I am not going to pay sales tax on the dealers profit. Next, if you drive off the dealers lot with an ADM car and it gets totaled on the way home, your insurance will not cover your foolish ADM purchase price. Finally, if you end up with an ADM lemon Ford car, do you really think that Ford will cover your ADM in the vehicle buy back transaction? You all know the answer to all of the above.

 

[Trackster]

Great conversation going here. I feel compelled to share my experience beginning back in September of 2019.
After seeing the new GT500 at our Mustang Roundup at MPH I was jazzed about the Tremec dual clutch transmission. I must have called 20 some dealers in my area wanting 15-25k over list to order one. I was so pissed and after reading up on the new Vette with the same trans. (supposedly higher torque rating) I ordered one at sticker price. It came in Feb. 2021 and I paid sticker price.
Last spring I ordered a Bronco from Granger because they were 2k under list. I checked on my order yesterday, I’m 398th in line with 6-10 allocations a month. WTF why would they even take the order?
I’m now considering paying 10k over for a 2021 GT500 as an investment, found a couple available.
Not likely to even be able to order a 2022 with chip shortage and will surely be the last big power ICE year.
The 760hp ZR1 Corvettes are bringing huge money already. Gotta think a new Mustang will hold better value than a late model Z06 manufactered in the tens of thousands.
Thoughts?

 

[Finally21]

I ordered my GT Premium in March 2021 right about the time the chip issue became an issue, I paid 4% under MSRP. Ordered in March, took delivery in August.

 

[Hillsndale]

We have been shopping for a new SUV for my wife so I saw firsthand what is going on with adm in that arena. First test drive was the newly redesigned Pathfinder, no adm, only one on hand was already spoken for. Next was the darling of the reviewers, the Telluride, $7,900 adm, only one on hand already spoken for. Interestingly the salesman told us how the dealership owner cared so much about the customers that he was "only" charging $7,900 adm and that most nationwide are charging $10k. The Hyundai dealer had nothing on the lot to test drive, don't remember how much the adm was. Honda Pilot and Passport both had adm even though the Passport was a leftover 2021!!! Toyota Highlander, $2k adm, one on hand already spoken for. Ford Explorer, no adm, only one on hand aready spoken for. The Explorer was the last one we test drove and she chose it because of the driving dynamics, responsiveness, and she says "it suits me best". Other Ford dealers in the area are charging up to $2,500 adm on Explorers. We ordered one and got an additional $1k incentive. Almost all of the dealers, regardless of brand are charging adm on SUVs in our area. So moving forward guess what that Ford dealer is also getting from us? Our service business because they are local to us. It has often been said that most of the profit for dealerships is from the service department. If the Ford dealers had a $7900 adm we would be going to a different brand, and would have been a lost sale to Ford corporate as well.

Keep in mind that adm is not solely based on demand. Everything we looked at was pre-sold while in transit to the dealer's lot regardless of brand, with widely varing adm. As for top line vehicles, they help bring foot traffic into dealerships. If you own a dealership and you have an allocation of 1 GT500, you may not want it to sell as soon as it hits the lot. It could also be good for the dealership's image. When I was shopping for my Mustang, the salesman invited me to sit in the GT350 even though he knew it was out of my price range. He didn't try to sell me on it, but increased the chance that I would talk to my friends about it. At that time, March 2020, all the local dealers had $5,000 adm on leftover 2019 Bullits. If that was the true market value, why were they sitting on lots unsold for months? Some were over 6 months. $5k adm along with an extra year of depreciation. That was not the case nationwide, but shipping would have cut into some of the savings. All said and done, whether we think adm is right or wrong, it is a businees decision that the dealership made that also affects Ford's brand.

 

[Atlas1]

Great conversation going here. I feel compelled to share my experience beginning back in September of 2019.
After seeing the new GT500 at our Mustang Roundup at MPH I was jazzed about the Tremec dual clutch transmission. I must have called 20 some dealers in my area wanting 15-25k over list to order one. I was so pissed and after reading up on the new Vette with the same trans. (supposedly higher torque rating) I ordered one at sticker price. It came in Feb. 2021 and I paid sticker price.
Last spring I ordered a Bronco from Granger because they were 2k under list. I checked on my order yesterday, I’m 398th in line with 6-10 allocations a month. WTF why would they even take the order?
I’m now considering paying 10k over for a 2021 GT500 as an investment, found a couple available.
Not likely to even be able to order a 2022 with chip shortage and will surely be the last big power ICE year.
The 760hp ZR1 Corvettes are bringing huge money already. Gotta think a new Mustang will hold better value than a late model Z06 manufactered in the tens of thousands.
Thoughts?

i wouldn't buy any of these cars as an investment. i guess it depends how you define that term though. my mach 1 is an investment, in that i don't think the future is all that bright for these cars to continue being produced and i want to have some cool stuff to leave for the next generation.

 

[Longitude Zero]

Many dealers in my area have ADM's of 3K to 5K on run of the mill ordinary, nothing special F-150's. Another has ADM's on every vehicle on the lot no matter what vehicle it is.

 

[StangersInTheNight]

The important word is 'unreasonable'. Who decides what a 'reasonable' mark-up is?

 

[Hillsndale]

The important word is 'unreasonable'. Who decides what a 'reasonable' mark-up is?

Shades of grey....Magnetic, Carbonized, Dark Matter.

 

[Bikeman315]

No ADMs why......I am not going to pay sales tax on the dealers profit. Next, if you drive off the dealers lot with an ADM car and it gets totaled on the way home, your insurance will not cover your foolish ADM purchase price. Finally, if you end up with an ADM lemon Ford car, do you really think that Ford will cover your ADM in the vehicle buy back transaction? You all know the answer to all of the above.

And a person who wants a car bad enough to pay a hefty ADM, I’m thinking $5k+, doesn’t care about the questions or the answers. Only the ones who refuse to pay care and that’s why the are so pissed off.

 

[Saxgod]

The issue with adm is when prices come back to earth there are going to be a lot of folks badly upside down and screaming about how ford screwed them and how bad the resale value is. If they lose their shirt they won’t be back for another.

Will a bank even loan someone that much over the cars value? I would think you would have to pay that markup in cash if you were looking to finance the whole car.

 

[Hillsndale]

Will a bank even loan someone that much over the cars value? I would think you would have to pay that markup in cash if you were looking to finance the whole car.

Our credit union is advertising up to 120% of msrp on new and 120% of Kelly Blue Book on used.

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