To avoid ADM I hope Ford does this

[91z28350]

Not entirely true.
We are a very reputable dealer that have won Ford president awards many times and we have a really strong customer base both in sales and service.
While we have never added the mark up to "regular" vehicles, we have always added something to the unique limited vehicles ( $5000 mark up on the very first 2007 Shelby , $10000 markup on the 2005 Ford GT) and sold the vehicles at those asking prices.
I think the dealers that try to add the markup to anything new to the market are the one's who ruin it for all other dealers. There is no excuse or reason for a dealer to add a markup to any 2015 Mustang, unless its an LE. But luckily most of those dealers will sit on those units for a while and hopefully learn their lesson that sometimes it is best to sell it now and make a little profit that sit on it for a while and realize it wasnt as hot of item as they thought it was.

You can always find someone who is willing to pay more for the privilege of being first. It still doesn't make it right, and any dealership that does so is a dealership I will not do business with.

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[2112]

Not entirely true.
We are a very reputable dealer that have won Ford president awards many times and we have a really strong customer base both in sales and service.
While we have never added the mark up to "regular" vehicles, we have always added something to the unique limited vehicles ( $5000 mark up on the very first 2007 Shelby , $10000 markup on the 2005 Ford GT) and sold the vehicles at those asking prices.
I think the dealers that try to add the markup to anything new to the market are the one's who ruin it for all other dealers. There is no excuse or reason for a dealer to add a markup to any 2015 Mustang, unless its an LE. But luckily most of those dealers will sit on those units for a while and hopefully learn their lesson that sometimes it is best to sell it now and make a little profit that sit on it for a while and realize it wasnt as hot of item as they thought it was.

Sounds like your dealership is one to pass up?

You can shear sheep over and over, but you can cut them only once. :thumbdown:

Oh, yeah got my FGT at MSRP and both an 08' and my current GT500 for under by moving on to the next dealer as you suggest.

I think Chrysler's approach will build brand loyalty. I Never buy non-Fords, but good for them.

 

[hadokenny]

Not entirely true.
We are a very reputable dealer that have won Ford president awards many times and we have a really strong customer base both in sales and service.
While we have never added the mark up to "regular" vehicles, we have always added something to the unique limited vehicles ( $5000 mark up on the very first 2007 Shelby , $10000 markup on the 2005 Ford GT) and sold the vehicles at those asking prices.
I think the dealers that try to add the markup to anything new to the market are the one's who ruin it for all other dealers. There is no excuse or reason for a dealer to add a markup to any 2015 Mustang, unless its an LE. But luckily most of those dealers will sit on those units for a while and hopefully learn their lesson that sometimes it is best to sell it now and make a little profit that sit on it for a while and realize it wasnt as hot of item as they thought it was.

Another reason to get rid of car dealers all together...like Tesla. All this negotiating and moving to next dealer is a waste of time.

 

[Five Oh Brian]

Allow me to add some perspective from the dealer side of the equation. A quick history: I've worked at my current Ford dealership for 15 years in a variety of roles and am currently the GSM. I love Mustangs first and foremost and only began working at a Ford store due to my passion for Mustangs (I worked in the retail/corporate world before getting into the car biz).

My thoughts on pricing? The everyday reality of my business is that our regular vehicles are deeply discounted. You'll typically find our F-series trucks, for example, discounted $4K - $6K below MSRP (and that's before deducting the rebates!). Regular cars & SUV's are typically discounted $2K - $4K below MSRP. The store I work at is a one-price (non-negotiating) store so we post our best price up front and don't move from those prices. To be competitive, we have to discount like I've noted above. So, my point here is that every day we discount thousands and thousands off MSRP on 99.9% of what we sell because that's what supply vs demand dictates. Heck, our all-new 2015 Mustang Eco/V6/GT's are below MSRP (our '15 GT's on the lot today are $2K below MSRP, for example). And even our 2014 SVT Raptors are all at MSRP or less (no ADM's) and we sold all of our 2014 SVT GT500's at or below MSRP, as well. Most new cars are sold with very minimal profit - if any - just to keep them moving.

Consumers expect us to give up thousands off MSRP on mainstream products all the time, so I don't feel guilty at all when we price a specialty car over MSRP. It has to work both ways; the dealers can't be expected to always be the loser in the transaction. Profit is not a dirty word. Car dealers aren't making gross amounts of profit like they were decades ago.

For those of you who think that MSRP is gospel and should never be exceeded, have you considered that if MSRP is truly gospel then it should always be the price? I would absolutely love to sell every vehicle at MSRP; we'd make way more money if a magic wand were waved and we were forced to sell everything at MSRP. However, MSRP, by definition, means manufacturer's SUGGESTED retail price. As long as it's a suggestion, actual transactions will continue to be over MSRP in some cases, but well below MSRP in most cases on most cars.

So be careful what you ask legislators and auto manufacturers for. If you want to abolish pricing above MSRP, you have to also abolish pricing below MSRP and fix prices. If you eliminate dealers and buy direct from manufacturers, do you think you'll see much discounting or negotiating on the vast majority of vehicles sales? Is this really going to benefit the consumer the majority of the time?

For those of you familiar with Adam Smith's "Invisible Hand" theory, our supply vs demand economy will always work to level out transaction prices over time. Sure, initial demand for some cool new toy will lead to higher initial pricing, but over time the free market economy will dictate pricing by 1) demand that softens and 2) supply that increases or finally meets demand. Don't want to pay a premium to get the first one of something on your block? Simply wait a few months or a year until pricing comes down. It's not like a GT350 is a need; it's simply a luxury item bought with disposable income. If we were talking basic necessities (i.e. water, food, fuel) I'd be right there with you all on making sure that pricing was kept in check. But as long as we're talking about a luxury item, our free market economy is a defining principle of our nation's existence and will guide pricing, accordingly.

 

[osu13]

Allow me to add some perspective from the dealer side of the equation. A quick history: I've worked at my current Ford dealership for 15 years in a variety of roles and am currently the GSM. I love Mustangs first and foremost and only began working at a Ford store due to my passion for Mustangs (I worked in the retail/corporate world before getting into the car biz).

My thoughts on pricing? The everyday reality of my business is that our regular vehicles are deeply discounted. You'll typically find our F-series trucks, for example, discounted $4K - $6K below MSRP (and that's before deducting the rebates!). Regular cars & SUV's are typically discounted $2K - $4K below MSRP. The store I work at is a one-price (non-negotiating) store so we post our best price up front and don't move from those prices. To be competitive, we have to discount like I've noted above. So, my point here is that every day we discount thousands and thousands off MSRP on 99.9% of what we sell because that's what supply vs demand dictates. Heck, our all-new 2015 Mustang Eco/V6/GT's are below MSRP (our '15 GT's on the lot today are $2K below MSRP, for example). And even our 2014 SVT Raptors are all at MSRP or less (no ADM's) and we sold all of our 2014 SVT GT500's at or below MSRP, as well. Most new cars are sold with very minimal profit - if any - just to keep them moving.

Consumers expect us to give up thousands off MSRP on mainstream products all the time, so I don't feel guilty at all when we price a specialty car over MSRP. It has to work both ways; the dealers can't be expected to always be the loser in the transaction. Profit is not a dirty word. Car dealers aren't making gross amounts of profit like they were decades ago.

For those of you who think that MSRP is gospel and should never be exceeded, have you considered that if MSRP is truly gospel then it should always be the price? I would absolutely love to sell every vehicle at MSRP; we'd make way more money if a magic wand were waved and we were forced to sell everything at MSRP. However, MSRP, by definition, means manufacturer's SUGGESTED retail price. As long as it's a suggestion, actual transactions will continue to be over MSRP in some cases, but well below MSRP in most cases on most cars.

So be careful what you ask legislators and auto manufacturers for. If you want to abolish pricing above MSRP, you have to also abolish pricing below MSRP and fix prices. If you eliminate dealers and buy direct from manufacturers, do you think you'll see much discounting or negotiating on the vast majority of vehicles sales? Is this really going to benefit the consumer the majority of the time?

For those of you familiar with Adam Smith's "Invisible Hand" theory, our supply vs demand economy will always work to level out transaction prices over time. Sure, initial demand for some cool new toy will lead to higher initial pricing, but over time the free market economy will dictate pricing by 1) demand that softens and 2) supply that increases or finally meets demand. Don't want to pay a premium to get the first one of something on your block? Simply wait a few months or a year until pricing comes down. It's not like a GT350 is a need; it's simply a luxury item bought with disposable income. If we were talking basic necessities (i.e. water, food, fuel) I'd be right there with you all on making sure that pricing was kept in check. But as long as we're talking about a luxury item, our free market economy is a defining principle of our nation's existence and will guide pricing, accordingly.

+1, you speak a lot of truth in that statement.

 

[disneyfun1]

the dealer i bought 6 cars from in the last year told me they will be adding a 20K markup on the gt350. they knew i wanted to order one and i said im not doing that. i have already found another that said they only charge sticker price on them and once they know prices and their allocation, will then call me to see if i can order it as long as they have enough.

 

[2112]

It is not true that if a dealer sells at invoice, no profit is earned. There is holdback (which is significant) and many other revenue streams in finance, title and insurance.

It is also not true that many dealers are not making gross amounts of money. Sure, the salesman on the floor isn't but most GSMs in my area do better than most Surgeon's who have your health in their hands. This doesn't even touch on the millions ownership takes home.

Yup, it is a free market, you can gouge where you want. The reason the manufacturers wish you would quit doing it is because buyer's HATE it. It kills brand loyalty. Talk to someone who actually paid your ADM and they are still pissed off years after the fact.

Often, the jump ship to the competition.

Please don't trot out the lame argument that you don't make anything on all the F-150's you sell close to invoice.

Do you really think we are that stupid?

 

[2112]

the dealer i bought 6 cars from in the last year told me they will be adding a 20K markup on the gt350. they knew i wanted to order one and i said im not doing that. i have already found another that said they only charge sticker price on them and once they know prices and their allocation, will then call me to see if i can order it as long as they have enough.

Same experience here. A new Superduty every other year and the still need to rip me a new axxhole on any new SVT product.

Thank goodness for the internet, I'd rather pay for shipping than get ripped of by an ungrateful business.

 

[w3rkn]

It is not true that if a dealer sells at invoice, no profit is earned. There is holdback (which is significant) and many other revenue streams in finance, title and insurance.

It is also not true that many dealers are not making gross amounts of money. Sure, the salesman on the floor isn't but most GSMs in my area do better than most Surgeon's who have your health in their hands. This doesn't even touch on the millions ownership takes home.

Yup, it is a free market, you can gouge where you want. The reason the manufacturers wish you would quit doing it is because buyer's HATE it. It kills brand loyalty. Talk to someone who actually paid your ADM and they are still pissed off years after the fact.

Often, the jump ship to the competition.

Please don't trot out the lame argument that you don't make anything on all the F-150's you sell close to invoice.

Do you really think we are that stupid?

This^


A close co-worker went in to buy a GT500. Even after to agree paying half of their ADM, he still wanted to test drive the car before he bought it. They refused. On the grounds the car was "special".

He walked. 13 months later he gets a call from the dealer, wanting to know if he was still interested and they would cut him a deal.

He told them: "You are nuts, not only have you lost my business, but all the people who I speak with..."



Greedy Dealers that are too interested in money, tend to focus on money, making it readily evident to a good many patrons. These greedy types just don't see the dmg to their business, because greed has no regrets. It's a sickness.

If you do good business, you'll never have to look for a customer.

 

[Alloye]

With maybe one or two exceptions, I've heard the "we're not making a dime on this deal" speech at least once during the purchase of every car I've ever owned. The only question is whether it begins with the salesperson or is deferred until the trip to the finance office. I know it's a completely bogus assertion, so when I see an ADM sticker, I just point at it and laugh out loud.

On the other hand, I don't go in looking for invoice or below, either. Somewhere between invoice and MSRP is OK with me.

 

[2112]

W3krn,

Let's look at it this way;

They must make money to stay in business.

But what is the better business model, gouging the crap out of someone who stays angry for years (and tells everyone who'll listen) making $10+ thousand extra on one unit?

Or having a reputation for treating their customers right and selling 50 units for a reasonable mark up, say invoice + $1K on regular cars and MSRP on SVT products?

As I said above, you can shear sheep over and over, but you can cut them only once.

 

[Five Oh Brian]

It is not true that if a dealer sells at invoice, no profit is earned. There is holdback (which is significant) and many other revenue streams in finance, title and insurance.

It is also not true that many dealers are not making gross amounts of money. Sure, the salesman on the floor isn't but most GSMs in my area do better than most Surgeon's who have your health in their hands. This doesn't even touch on the millions ownership takes home.

Yup, it is a free market, you can gouge where you want. The reason the manufacturers wish you would quit doing it is because buyer's HATE it. It kills brand loyalty. Talk to someone who actually paid your ADM and they are still pissed off years after the fact.

Often, the jump ship to the competition.

Please don't trot out the lame argument that you don't make anything on all the F-150's you sell close to invoice.

Do you really think we are that stupid?

Man, I wish I made as much as a surgeon! Dealership management and owners don't make nearly as much as they once did decades ago. Where dealers make money nowadays is in the service & parts departments. New vehicle sales is not a big money maker anymore.

You are correct that the invoice total is not the "cost" of a vehicle to a dealer and I never told you otherwise, so I don't know why you brought it up. Holdback is 3% of MSRP and manufacturers (not just Ford) pay this to dealers to offset the expense of having hundreds of vehicles on the lot for sale. We don't own the vehicles on our lot - a bank does and we pay interest monthly to the bank to "floor" our vehicles. Holdback is designed to cover that expense and is not a "profit" line, although I bet you believe otherwise. We do get some extra monies back from Ford on some vehicles occasionally. Ford sometimes offers "dealer cash" if we sell particular models they are emphasizing.

My whole point of my post was that we sell 99.9% of our vehicles well below MSRP everyday. Why shouldn't the needle swing the other way once in a great awhile. It's a 2-way street. If MSRP is something holy, then let's make it MSRP on everything, every time. Customers shouldn't get gouged, but neither should dealers.

Oh, and I hope you noticed in my examples in my post that even our SVT products have been sold at MSRP or less. We're one of the "good" dealers if you define "good" & "bad" by how we set pricing. Ford defines it by customer surveys and they award their President's Award annually to a handful of dealers each year who top the list for customer satisfaction. My dealership has won 16 of these and there are only a couple dozen Ford dealerships anywhere in the entire USA who have won as many. Also, car dealers are often some of the most charitable businesses in their communities. Ours is no exception and we (both the store and individual employees) give a lot of money & time to our neighbors in need. And, due to the big ticket prices of automobiles, we generate a lot of tax revenue for our city, county, and state - much more than the small businesses in town. So, I guess that makes us a "good" dealer in the eyes of many groups based on a variety of definitions.

 

[2112]

With maybe one or two exceptions, I've heard the "we're not making a dime on this deal" speech at least once during the purchase of every car I've ever owned. The only question is whether it begins with the salesperson or is deferred until the trip to the finance office.

There is something called holdback, which is like a rebate to the dealer on all sales, not to mention sweetheart flooring packages a volume rewards.

Manufacturers know that with invoices being public information, and many sales being near that figure, they need to protect their dealers with incentives not in the public domain. Bigger volume dealers get the best rewards, but they all get them.

 

[2112]

Brian,

I am not singling you out. I am a life long car guy and run in those circles.

Buyers hate ADM's. They stay pissed forever. I am not suggesting you sell for less than MSRP. I am suggesting you cultivate a loyal brand and dealership following that come back to you time and time again. And more importantly, send their friends and family.

The Seattle-Tacoma ADM's on GT500's were averaging $15k. Being a loyal, repeat Superduty buyer wouldn't change that on even an ordered car. So be it, a Minnesota dealer was happy to sell at MSRP, without me buying a $60K pickup every 24 months. This sours me on Ford products in a big way.

It is a free market, do as you wish. If I buy a Ford, it will be online, and if ADM's are as bad as they have been in those places as well? I will buy a Z06........and a Ram pickup.

PS, I know of 2 local GSM's who make in the neighborhood of $300k. Most surgeon's are no longer in that tax bracket.

 

[2112]

Dodge is taking the lead on this and I think it's a great idea. Ford doesn't like ADM either:

"After that, dealers will be allocated Hellcats based on the length of time they spend on dealer lots before being sold. This is being done partly to reduce dealers’ use of surcharges, which add to profit but can keep cars sitting on lots instead of getting out to buyers’ driveways. Mr. Kuniskis said the goal for Hellcat powered cars was to be “shared” with friends and thereby move the brand forward. That is one reason why the price was set at $60,990, including shipping — to make it affordable by a relatively large group of people, many ymore than could buy it if dealers slapped a $20,000 surcharge on the hood"

http://www.allpar.com/news/index.php/2014/09/ordering-open-for-challenger-hellcat

Chrysler must get it. ADM's cost you sales in the long run.

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