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akirby

Ford warns dealers about F150 Lightning orders

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Ford can’t prevent ADMs but they can stop dealers from charging customers an extra fee to place their order.

 

https://insideevs.com/news/559386/ford-threatens-dealers-f150-lightning/

 

Here’s a thought.  Ford could require each order to have a signed contract between the dealer and customer stating the sale price and then if the dealer tries to mark it up later Ford has recourse against the dealer.  Dealers can still charge ADMs if they want but they’d have to be disclosed and agreed up front.

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Here's a copy of the actual notice to Dealers... 

 

SUMMARY
It has come to our attention that a limited number of dealerships are interacting with customers in a manner that is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation.
 

Examples of these negative interactions include demanding that customers who are already on the reservation list for the 22 MY F-150 Lightning make additional deposits or payments. These actions are perceived as threatening customers by withholding their opportunity to convert reservations to orders.
 

This behavior is not allowable under Paragraph 6 of the Sales and Service Agreement. Paragraph 6(i) states that “The Dealer shall conduct DEALERSHIP OPERATIONS in a manner that will reflect favorably at all times on the reputation of the Dealer, other Company authorized dealers, the Company, COMPANY PRODUCTS and trademarks and trade names used or claimed by the Company or any of its subsidiaries. The Dealer shall avoid in every way any “bait”, deceptive, misleading confusing or illegal advertising or business practices.”
 

If it is determined that your dealership is engaging in such practices, Ford Motor Company reserves the right to redirect that dealerships allocation of the F-150 Lightning for the entirety of the 2022 MY.
 

No-Sale Provision
In order to prevent the re-sale of 22MY F150 Lightning, Ford is offering support for a No-Sale Provision to be signed by the customer at the time of purchase. Dealers may add this language to existing closing forms or create a new standalone document.

  • Purchaser hereby agrees that it will not sell, offer to sell, or otherwise transfer any ownership interest in the Vehicle prior to the first anniversary of the date hereof. Purchaser further agrees that Seller may seek injunctive relief to prevent the transfer of title of the Vehicle or demand payment from Purchaser of all value received as consideration for the sale or transfer.

Dealers should consult with their legal counsel to address any state-specific requirements.

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In order to prevent the re-sale of 22MY F150 Lightning, Ford is offering support for a No-Sale Provision to be signed by the customer at the time of purchase. Dealers may add this language to existing closing forms or create a new standalone document.....I think I mentioned this a while ago ( similar to the GT blueprint ) to curb flipping for ludicrous numbers, now will this extinguish some of the STUPID amounts some Dealers are adding as Addendums?......I mean, a little I can understand given limited markup...but some Dealers are on crack.

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1 hour ago, Deanh said:

In order to prevent the re-sale of 22MY F150 Lightning, Ford is offering support for a No-Sale Provision to be signed by the customer at the time of purchase. Dealers may add this language to existing closing forms or create a new standalone document.....I think I mentioned this a while ago ( similar to the GT blueprint ) to curb flipping for ludicrous numbers, now will this extinguish some of the STUPID amounts some Dealers are adding as Addendums?......I mean, a little I can understand given limited markup...but some Dealers are on crack.

 

Why would it stop the dealers though from adding addendums?  Now they'd be the only game in town for a year.

 

I know for Broncos, my dealer is charging a 35k markup on a First Edition they had and a 29k!! markeup on a Big Bend!  Luckily, they're honoring MSRP for orders/reservations.  I don't necessarily have a problem with a dealer adding an addendum to a lot vehicle (I'd assume the FE order holder either didn't want it/fell through, and the Big Bend may've been a non order), but to an order without prior indication would be too far.

 

That said, 29-35k is ridiculous.  Though I guess they added 10k to my dad's Raptor years ago, but he worked out to get a few accessories put in in exchange for that.

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1 hour ago, rmc523 said:

 

Why would it stop the dealers though from adding addendums?  Now they'd be the only game in town for a year.


I think the point was the flippers would no longer be interested so that would lower demand.

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Would it be deemed unacceptable behaviour for Ford to publish a list of dealers prepared to sell at near MSRP rather than singling out dealers that won’t?

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1 hour ago, jpd80 said:

Would it be deemed unacceptable behaviour for Ford to publish a list of dealers prepared to sell at near MSRP rather than singling out dealers that won’t?


Don’t forget that memo has nothing to do with ADMs.    But yes.  That’s a lawsuit waiting to happen.

 

i still think requiring signed buyer’s orders when the order is placed would at least stop all the surprise ADMs.  If you want to charge $10k over on an order get it signed up front, otherwise you don’t get incremental allocation.

 

Word of mouth and social media seems to work pretty well to communicate dealers with the best deals.

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That Ford believes it would be OK to demand that the customer not be allowed to sell a vehicle he or she owns when he or she desires at any price he/she could obtain is astounding and seems an un-American practice to me. I can’t believe such a provision would stand any court challenge. 

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14 minutes ago, Trader 10 said:

That Ford believes it would be OK to demand that the customer not be allowed to sell a vehicle he or she owns when he or she desires at any price he/she could obtain is astounding and seems an un-American practice to me. I can’t believe such a provision would stand any court challenge. 

 

I do understand it to an extent, especially on a halo model like the GT - they want it in the hands of someone that will actually use it.  Not just someone grabbing them to make money down the road.

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1 hour ago, Trader 10 said:

That Ford believes it would be OK to demand that the customer not be allowed to sell a vehicle he or she owns when he or she desires at any price he/she could obtain is astounding and seems an un-American practice to me. I can’t believe such a provision would stand any court challenge. 

It's pretty basic contract law; you agree to the terms or you don't sign the contract. If you don't sign the contract, they don't sell you the truck. This isn't an open-ended no-resale clause, it's just a one-year agreement; after that, you're free to sell it for whatever price you want.

 

Here's a more in-depth explanation by attorney Steve Lehto.

 

 

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That guy is really smart.  It is a contract issue and if you don’t like the terms don’t buy it.  I think they allow the original buyer to sell it but it either has to be sold back to the dealer or the dealer gets any markup.  It’s not like you’d be stuck if your circumstances change and you need to get rid of it.

 

As for enforcing a purchase contract that’s unlikely.  But you can always walk away from the deal if they change the terms and they have to refund your deposit.  You could then try to sue for damages but how do you prove damages when you can purchase the vehicle at another dealer?

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17 hours ago, rmc523 said:

 

Why would it stop the dealers though from adding addendums?  Now they'd be the only game in town for a year.

 

I know for Broncos, my dealer is charging a 35k markup on a First Edition they had and a 29k!! markeup on a Big Bend!  Luckily, they're honoring MSRP for orders/reservations.  I don't necessarily have a problem with a dealer adding an addendum to a lot vehicle (I'd assume the FE order holder either didn't want it/fell through, and the Big Bend may've been a non order), but to an order without prior indication would be too far.

 

That said, 29-35k is ridiculous.  Though I guess they added 10k to my dad's Raptor years ago, but he worked out to get a few accessories put in in exchange for that.

 

Mullinax has about 20 Broncos and about all are used as demos to be sold later after some light miles. And I would guess be sold for much higher price than sticker. Expect them to do the same with Lightning. Seems to be the model for mega dealers. Looks like Mullinax does this with the Mach E also. 

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11 hours ago, Trader 10 said:

That Ford believes it would be OK to demand that the customer not be allowed to sell a vehicle he or she owns when he or she desires at any price he/she could obtain is astounding and seems an un-American practice to me. I can’t believe such a provision would stand any court challenge. 

 

Seems to me Ford did this with A and B plan buyers.....can't resell it for at least 6 months after purchase. As a teenager I got a Cortina GT through B plan and couldn't resell it for at least 6 months according to Ford. So there is precedence and as mentioned with Ford GT. I believe Ford won those cases as with John Cena.

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22 minutes ago, FordBuyer said:

 

Seems to me Ford did this with A and B plan buyers.....can't resell it for at least 6 months after purchase. As a teenager I got a Cortina GT through B plan and couldn't resell it for at least 6 months according to Ford. So there is precedence and as mentioned with Ford GT. I believe Ford won those cases as with John Cena.


There is no B plan.  A is employees, D is dealership and Z is retirees.  There should be restrictions on those since they’re employment perks.  I don’t see that restriction on x plan sales.

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1 hour ago, akirby said:


There is no B plan.  A is employees, D is dealership and Z is retirees.  There should be restrictions on those since they’re employment perks.  I don’t see that restriction on x plan sales.

 

He may be remembering 20-some years ago, Ford (in Dearborn) had a B-plan/B-lot option for employee's to purchase used (exec turn-ins) vehicles, before they ended that program.

 

HRG

Edited by HotRunrGuy

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2 hours ago, akirby said:


There is no B plan.  A is employees, D is dealership and Z is retirees.  There should be restrictions on those since they’re employment perks.  I don’t see that restriction on x plan sales.

 

There was a B plan back in the day. Ford management got a vehicle as a perk and after a few months turned them into the B plan lot. Then any Ford salaried employee could pick out and buy one off the lot and all had less than 6,000 miles. Ford employee could also give the vehicle to family members like me who was the don of Ford engineer. Don't know if Ford has similar program today. Ford does something with its Ford Executive perk vehicles. 

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1 hour ago, HotRunrGuy said:

 

He may be remembering 20-some years ago, Ford (in Dearborn) had a B-plan/B-lot option for employee's to purchase used (exec turn-ins) vehicles, before they ended that program.

 

HRG

Were some sweet deals on the b- lot. My dad bought an escort diesel in the mid 80s thing was a dog, lol. But he loved the 600 miles he got per fill up.

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23 minutes ago, jose said:

Were some sweet deals on the b- lot. My dad bought an escort diesel in the mid 80s thing was a dog, lol. But he loved the 600 miles he got per fill up.

 

Yep, most were well optioned, low miles, full warranty, and great deals price wise. I lucked out getting the Cortina GT. Today, they go for big money. I know Wheeler Dealer redid one they bought and got big bucks for it. They still race them in vintage racing series. My next vehicle was Capri V6 and they were awesome racers. 

 

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3 hours ago, akirby said:


There is no B plan.  A is employees, D is dealership and Z is retirees.  There should be restrictions on those since they’re employment perks.  I don’t see that restriction on x plan sales.

X-plan also has a 6 month title and registration requirement (straight from fordpartner.com).

 

Quote
  • Titling eligibility is as follows:
    • Vehicles must be retained in the customer's possession and registered as provided above for at least six months from the date of purchase or lease.
    • Individuals:
      • Vehicles must be registered or titled to the Partner Recognition X-Plan eligible individual.
      • Non-eligible members may appear as co-signers or co-makers of the loan or other financing agreement, and may also appear on the Vehicle Title or Registration. However, the primary user of the vehicle must be the X-Plan eligible member.
      • Vehicles leased under the Red Carpet Lease will be titled in the name of Ford Credit or as directed by Ford Credit or Lincoln AFS as directed by Lincoln Automotive Financial Services, but must conform to the above registration requirements.
      • Vehicles also may be registered in the name of a customer's trust provided that the
        customer's name is included in the name of the trust, i.e. "John Smith Trust.”

 

The specific provision that Ford proposed basically entitles the dealership to claim any profit that is made on the resale if it is within the 1st year.  So if you bought a Lightning and drove it for 6 months and then sold it for more than you paid, the selling dealer could file suit to claim the difference between what you paid and what you sold it for.  Likely no dealer would do that unless the amount was greater than what it would cost to file the suit and collect payment.  I believe the spirit of that provision is to trade selling the vehicle for MSRP in return for you agreeing not to resell it for profit.  I personally would not agree to that provision unless the dealer was at or below MSRP for the vehicle.  But I also don't buy cars to flip.  Car reviewers that long term test and keep for 6 to 12 months may have issues unless they work it out with the dealer to sell it back to the dealer at the end of the test.

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Thanks.  I thought x plan had that requirement but I just looked for it and couldn’t find it.  Also didn’t know about B plan.

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5 hours ago, FordBuyer said:

 

Mullinax has about 20 Broncos and about all are used as demos to be sold later after some light miles. And I would guess be sold for much higher price than sticker. Expect them to do the same with Lightning. Seems to be the model for mega dealers. Looks like Mullinax does this with the Mach E also. 

 

That doesn't surprise me.

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There's still a B Plan. There's just no B car lot. The trick is, you either have to be a management lessee and buy your own car with B Plan, or know a management lessee who's about to turn in his car, and get him to agree to "tag" it for you before turning it in. Once it's turned in, there is zero possibility of getting it on B Plan. In theory you could sit at WHQ-VSC and ask everyone who drives up if they're turning in their vehicles, but I wasn't motivated enough to try that. What doesn't work is driving through the VSC lot and looking at the obviously turned-in vehicles (as opposed to the undelivered ones) and requesting one of those. I tried!

 

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On ‎1‎/‎12‎/‎2022 at 12:15 PM, rmc523 said:

 

That doesn't surprise me.

This is exactly how Ferrari Dealers circumvent frowns from the Factory about Addendums....

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2 hours ago, Deanh said:

This is exactly how Ferrari Dealers circumvent frowns from the Factory about Addendums....


Which is weird since Ferrari owners/buyers are traditionally sticklers for NOT putting miles on their cars. 

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15 minutes ago, fuzzymoomoo said:


Which is weird since Ferrari owners/buyers are traditionally sticklers for NOT putting miles on their cars. 


We have a local Ferrari dealer and I remember someone reporting that every car they had was “used” with 250 miles.  

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