My number came up on the waiting list... but ADM

[grayforge]

One thing that bothers me about the whole ADM thing is:

A dealer is going to get only a few GT350s, so if they get $10k to $15k ADM on each, that seems like a drop in the bucket compared to their yearly profit for all other vehicles. Seems to not be worth it for the bad blood it may cause.

Lack of big picture thinking.

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[Blk2015GT]

One thing that bothers me about the whole ADM thing is:

A dealer is going to get only a few GT350s, so if they get $10k to $15k ADM on each, that seems like a drop in the bucket compared to their yearly profit for all other vehicles. Seems to not be worth it for the bad blood it may cause.

Lack of big picture thinking.

Bad blood to who though? Even if that customer/person in that family was buying a car this year too, margins on new cars how I understand it are relatively small.

Take a GT Premium. The dealer cost is $33,216 with a MSRP of $36,300 for that car. So the dealer makes $3000 IF they get MSRP which few pay MSRP on a regular car (Mustang GT). Then they get a holdback from the manufacturer of $1,089. So IF they sell at MSRP the dealer gets $4,089 before paying the salesman commission- usually a few hundred bucks.

If they sell it at $2,000 under MSRP (still $1,000 over invoice) the dealer made $2,089 and still have to pay their salesman commission out of that which is a few hundred bucks; 20-25% of the profit as I understand it from reading online. It's not a whole ton of money when people are paying less than MSRP then for a run of the mill car- maybe even $1,500 on a new GT Premium dealership profit.

If the dealer can get $10k over MSRP for ADM that's pure profit to them in their pocket on top of what their profit would've been at MSRP. That could be equivalent to the profit on quite a few new car sales (or more if the ADM is higher); a lot more profit than losing that 1 sale.

 

[drmustang]

Uh, no there wasn't that many 07 GT500's produced. I believe rthere were about 9k made.

And the old GT500 sold for over sticker usually with an MSRP of 65K-$68k. So, $60k seems high, but not a breaking point. A loaded F150 now is $60k+. Loaded Focus is even close to $35k. Cars are expensive now.

There were about 11,000, 2007 GT500s built, enough to have 0% financing on them during the summer of 2007. There were nearly 50,000 GT500s built over 8 model years. That will give anyone a good idea of just how "limited" production was. LOL!

 

[grayforge]

Bad blood to who though? Even if that customer/person in that family was buying a car this year too, margins on new cars how I understand it are relatively small.

Take a GT Premium. The dealer cost is $33,216 with a MSRP of $36,300 for that car. So the dealer makes $3000 IF they get MSRP which few pay MSRP on a regular car (Mustang GT). Then they get a holdback from the manufacturer of $1,089. So IF they sell at MSRP the dealer gets $4,089 before paying the salesman commission- usually a few hundred bucks.

If they sell it at $2,000 under MSRP (still $1,000 over invoice) the dealer made $2,089 and still have to pay their salesman commission out of that which is a few hundred bucks; 20-25% of the profit as I understand it from reading online. It's not a whole ton of money when people are paying less than MSRP then for a run of the mill car- maybe even $1,500 on a new GT Premium dealership profit.

If the dealer can get $10k over MSRP for ADM that's pure profit to them in their pocket on top of what their profit would've been at MSRP. That could be equivalent to the profit on quite a few new car sales (or more if the ADM is higher); a lot more profit than losing that 1 sale.

I'm thinking of total sales for the dealership. How many cars of all models does a dealership sell in a year? I'm guessing they make hundreds of thousands in profit. The $20k of ADM they took from a couple GT350s is small potatoes.

 

[ElSanchez302]

If I was in the market for a 350 I'd be angered by those with more money keeping me out of one. I was recently in a situation like this when buying my house. Every house in a certain price range was being over bid on between the buyers and the investors. It got to where I was offering a good chunk over list on houses just to get a chance at one. It'd be nice if everyone would adhere to the no adm code of honor. But truth be known it's dog eat dog out there and people are willing to pay to be one of the few to say they have a 350/350R. Gotta pay to play if these things are hot an item as they appear to be.

Yessir, I was in the same boat! I was angered by it too, but the housing market is extremely aggressive in LA. You pay, or you don't play. I found a deal thankfully.

 

[ElSanchez302]

I'm thinking of total sales for the dealership. How many cars of all models does a dealership sell in a year? I'm guessing they make hundreds of thousands in profit. The $20k of ADM they took from a couple GT350s is small potatoes.

Your assuming thats what's made on each car. Far from. A Fiesta can have as little as $50-$100 in margin, literally, plus a small holdback. And most fo the time, we have to discount those just to make the deal work or stick. So, no, dealers aren't making thousands on every deal, not even close...especially when you figure commision for salesman, the contract officer, the porters that wash and clean, the business office folks who process the paperwork and dmv stuff, etc etc.

 

[ElSanchez302]

How'd you get so many idiots as customers lol...;)

Lol, and they all come back. :doh: Really, they wouldn't come back or even remember my name if I treated them horribly. I'm all good there, though.

 

[FPCV8YO]

Wow, yeah I talked to "manny the mustang guy" out of vegas, who says he is the largest SVT dealer int eh country, and he was doing jsut taht, buying allocations from other dealers and upcharging on his end. 25k over for the base and 75k over for the R.

I believe that they are the largest Shelby American dealer but, not the largest SVT dealer.

 

[ElSanchez302]

Wow, yeah I talked to "manny the mustang guy" out of vegas, who says he is the largest SVT dealer int eh country, and he was doing jsut taht, buying allocations from other dealers and upcharging on his end. 25k over for the base and 75k over for the R.

Yeeea...About him... Not the largest SVT dealer. I'll just say that. Makes my deal on an R look like a bargain.

 

[grayforge]

Your assuming thats what's made on each car. Far from. A Fiesta can have as little as $50-$100 in margin, literally, plus a small holdback. And most fo the time, we have to discount those just to make the deal work or stick. So, no, dealers aren't making thousands on every deal, not even close...especially when you figure commision for salesman, the contract officer, the porters that wash and clean, the business office folks who process the paperwork and dmv stuff, etc etc.

Oh, I know there is a large range of profits from the Fiesta end to the Decked out F350 Turbo Diesel.

So what's the yearly profit for a large dealer?

 

[ohtobbad]

I have never met a poor dealer principle.
Dealership I go to, made 6 million last year.
Owners not happy, they are on target for 5 million this year.
poor bugger. Thats not counting, the leasing company he owns,
when you lease. I say good on him, but I would not pay ADM.
I did not and got the deal at MSRP.

In Fairness, I buy a lot of trucks from them and send them a lot of business.
Last year 2 trucks and sent them 15 new customers ( who bought cars)
I get very good deals on my purchases, so I was fine with MSRP.
I did joke he was raping me, so expect me to try and rape him back on next few
to make up for it. LOL

But I do think they can do as they wish, then its your option to buy or look elsewhere.
If it was as big a problem as some believe here, Corporate Ford would deal with it.
The fact they don't, tells me it is a small issue on limited vehicles
and how many of those do they really have.

 

[garagelogic]

...the business office folks who process the paperwork and dmv stuff, etc etc.

Get real. Almost all dealers charge a "document" fee of several hundred dollars on every car they sell. Those business office folks get paid from a pretty small portion of that fee. The rest of that fee is pure profit for the dealer.

As for the ADM these cars are going to get, I am one of those willing to pay it to get the car I want when I want it. Am I willing to pay more than $5K to be an early adopter, no, but I am willing to work with a dealer on what I feel is fair given the market AT THE TIME OF THE DEAL. I know I will likely be able to negotiate a better deal months into the production cycle, but I also have the disposable cash that a few thousand over MSRP is not going to alter my long-term financial planning. Some are not in that position and will very likely be stretching things or overextending themselves to get one at MSRP. in this case, it makes sense why an ADM is such an issue.

 

[Mustang1260]

Get real. Almost all dealers charge a "document" fee of several hundred dollars on every car they sell. Those business office folks get paid from a pretty small portion of that fee. The rest of that fee is pure profit for the dealer..

Careful on your get real attitude!!!! Lots of good points but a lot of you guys need to understand the world DOES NOT revolve around you. EVERY situation is different.

Folks in Mississippi probably don't see nor understand the ADM issues of California and all the hi-tech money that drives it but that doesn't mean it doesn't exist.

Same with the doc fees.... CA folks don't get the crazy doc fees you guys back east get suckered into paying- doesn't mean you don't pay them like lemmings.:doh:

For the past 20 yrs the "doc fee" in Calif was set by Statute at $55. Dealer can't charge more or they will have their doors slammed shut in a heartbeat by the state. CA legislature finally gave in and gave dealers a price increase a yr or so ago to $80. That is it: doc fee of $80 for office and DMV paperwork. I still think too much but no where near rip off territory.

 

[Hack]

Correct...those incomes are to scale with the cost of living in those regions. The basics tend to be the same...Eggs, Milk and even Fuel. The rest is all subjective to the level of gentrification the area will attract. But the Bus Driver in Cali certainly gets a lot less for his money than the Bus Driver in Minnesota. A closet for 2k a month to call home as opposed to a 1400 square foot home and a yard which is more common in middle America.

Good point about other costs. Our mortgage is less than that and we are on 10+ acres.

The all year drivability makes sense again if you come from Cali. But at the cost of less available locations for the high octane fuels that will wake a car like this up. Driving it everyday on the lower octane with the ECU retarding things is also going to translate to a car I wouldn't want to buy used when the guy in Cali grows tired of it.

If it's anything like the GT, most drivers (me for certain) will not notice a seat of the pants difference between lower and higher octane fuel. I tried both in my GT and now I only use 87. It's not that I'm too cheap to buy good fuel, but I am too cheap to spend for something that doesn't make a noticeable difference. I hope not to buy one used - because I should be able to get a new one. I wouldn't worry about engine damage from low octane fuel. I'm sure Ford's tuning is quite conservative.

 

[krt22]

Don't forget those pesky "advertising fees", you know, since it is the end users job to help pay the dealers operating costs.

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