Ford CEO Farley Cracking Down on Dealer Markups

[silvrsvt]

22 minutes ago, Deanh said:

not so sure about that.....the S in MSRP stands for suggested...any Dealer can sell their inventory for whatever it deems...just like as the market changes Ford or GM can add or take away Rebates and subveened financing dependent on the Market 

 

Don't doubt people trying to use the US Legal system as the Lottery either. 

[Deanh]

1 hour ago, silvrsvt said:

 

Don't doubt people trying to use the US Legal system as the Lottery either. 

isn't that the norm now?...when in doubt SUE and act like a victim...if that doesn't work throw out the race card....or...or...or....

[jasonj80]

3 hours ago, Deanh said:

not so sure about that.....the S in MSRP stands for suggested...any Dealer can sell their inventory for whatever it deems...just like as the market changes Ford or GM can add or take away Rebates and subveened financing dependent on the Market . Car business is fascinating...its gone from Wholesale on Trade ins and Wholesale ( read ridiculous discounts and rebates ) on New vehicles to Retail and above on trade ins and Retail and above on New purchases. Whats ironic...and fully understandable given Human nature...is people are fine with getting gobs of cash on their turn in, but they don't want to reciprocate and pay more ona New Vehicle purchase....

Except this has already been decided in many court cases. The S stood for the same in extended warranties and other up charges that got a lot of dealers/manufactures in major trouble over the past 20 years. When a dealer is charging women $3800 in ADM fees and Men at the same dealer only paid $2600 in ADM fees, or that the extra package that was added cost the average white customer $1500, and the average latino customer $2800 the dealer and to a lesser extent OEM's are going to get dragged into this. It is the reason now most dealers won't budge on extended warranty costs and if someone tells them an online price they will just say "buy it from them I don't want the questions if an audit is done." 

It is not an if the lawsuits happen, it is a when. Not all dealers are good dealers, some are on a fine line between what is legal and what isn't and some are way over. Some don't care because they have a famous owner and that makes everything okay and others treat their customers like crap and just fight in court because they know they can just out spend their customers even though they are wrong. All that ends when state AG's get involved and audit, you'll see bills in state houses introduced soon as well even if they don't go anywhere, election year is coming and protecting consumers always looks good for elected officials. 

Edited February 17, 2022 by jasonj80

[Mchom]

It's simple..... if you dont want to pay the asking price... don't buy it. Free enterprise, short supply, high demand... equal higher prices.

[Deanh]

19 hours ago, jasonj80 said:

Except this has already been decided in many court cases. The S stood for the same in extended warranties and other up charges that got a lot of dealers/manufactures in major trouble over the past 20 years. When a dealer is charging women $3800 in ADM fees and Men at the same dealer only paid $2600 in ADM fees, or that the extra package that was added cost the average white customer $1500, and the average latino customer $2800 the dealer and to a lesser extent OEM's are going to get dragged into this. It is the reason now most dealers won't budge on extended warranty costs and if someone tells them an online price they will just say "buy it from them I don't want the questions if an audit is done." 

It is not an if the lawsuits happen, it is a when. Not all dealers are good dealers, some are on a fine line between what is legal and what isn't and some are way over. Some don't care because they have a famous owner and that makes everything okay and others treat their customers like crap and just fight in court because they know they can just out spend their customers even though they are wrong. All that ends when state AG's get involved and audit, you'll see bills in state houses introduced soon as well even if they don't go anywhere, election year is coming and protecting consumers always looks good for elected officials. 

load of racial bollocks if you ask me...people have used race as such a cop out for so long its "strength" has become completely watered down...I don't give a $hit what ethnicity you are, who you want to identify as, what your sexuality is etc etc...treat everyone as you wish to be treated yourself...and EVERYONE has the right to say NO to anything they are offered..if your dumb enough to accept something absurd...the ONLY person you have to blame is yourself..not your friggen skin color or anything else. Sadly this bullshit gets injected in pretty much every conversation...so its relatively easy to ignore....barring blood sucking Attourneys that ride the wave of every victim flavor of the month...

[rperez817]

On 2/16/2022 at 3:00 PM, FordBuyer said:

Recent study shows that Ford and especially Lincoln still get less than sticker price on average. Cadillac got the most over sticker...$4,000 on average. Guess this study didn't take note of Bronco, Maverick, Raptor, and Mach E. However, not that hard to buy Escape, Explorer, F150, Edge, and all Lincolns under sticker. And Ford Credit is offering low to 0% interest loans on many Ford products. 

 

Thank you FordBuyer sir, you are probably thinking of the Edmunds study covering new car purchases in January 2022. It did take into account all of the Ford models you noted. Ford branded vehicles overall averaged about $163 above MSRP, Lincolns averaged $510 below MSRP. 8 out of 10 of Car Shoppers Paid Above Sticker Price for New Vehicles in January, According to Edmunds | Edmunds

 

MSRP vs ATP by Vehicle Make
January 2022

Make	MSRP	ATP	Difference
Cadillac	$76,914	$80,962	$4,048
Land Rover	$87,457	$90,022	$2,565
Kia	$32,218	$34,507	$2,289
Porsche	$103,590	$105,311	$1,721
Acura	$49,316	$51,017	$1,701
Genesis	$59,933	$61,536	$1,603
Honda	$32,440	$33,948	$1,508
Hyundai	$33,545	$35,043	$1,498
Audi	$60,965	$62,290	$1,325
Jaguar	$66,828	$67,937	$1,109
Toyota	$37,174	$38,189	$1,015
Nissan	$32,529	$33,433	$904
Infiniti	$53,709	$54,529	$820
Dodge	$48,498	$49,227	$729
Mercedes-Benz	$67,817	$68,536	$719
Fiat	$29,818	$30,536	$718
GMC	$58,749	$59,426	$677
Chevrolet	$47,728	$48,353	$625
Subaru	$34,164	$34,756	$592
Chrysler	$47,779	$48,239	$460
Volkswagen	$35,046	$35,474	$428
Jeep	$49,220	$49,573	$353
Mazda	$32,785	$33,097	$312
Lexus	$53,490	$53,725	$235
Mitsubishi	$29,309	$29,516	$207
Ford	$49,680	$49,843	$163
Buick	$41,716	$41,733	$17
Mini	$36,440	$36,289	-$151
BMW	$63,209	$63,010	-$199
Ram	$60,057	$59,592	-$465
Lincoln	$62,202	$61,692	-$510
Volvo	$57,870	$57,001	-$869
Alfa Romeo	$54,644	$51,223	-$3,421
Industry Average	$44,989	$45,717	$728

[RayLan]

Absolutely shameful they do this.

 

Here in the south after a bad storm, stores that price gouge get some serious reprocussions.

 

Same should happen to these so called dealers.

[Andrew L]

I am shocked Lincoln is not profitable you'd think the huge increase on the Navigators price would be enough to offset some of that but I guess not. 

 

And trust me I get it Aviator and Corsair do an amazing job of being extremely different than their Ford counterparts and that costs money but still.

[rmc523]

11 hours ago, Andrew L said:

I am shocked Lincoln is not profitable you'd think the huge increase on the Navigators price would be enough to offset some of that but I guess not. 

 

And trust me I get it Aviator and Corsair do an amazing job of being extremely different than their Ford counterparts and that costs money but still.

 

To be fair, this was January only, but yeah, it's surprising to see that.

[jasonj80]

Where do you see that Lincoln is not profitable? That is selling price vs MSRP. 

[akirby]

If Lincoln wasn’t profitable Hackett and Farley would have killed it despite Bill Ford’s fondness for Lincoln.

[Deanh]

those ATPs are about as accurate as Marty Feldman as a celebrated Sniper......

Edited February 21, 2022 by Deanh

[road turtle]

All a bunch of useless rhetoric.  In most states, due to franchise laws, Ford can't legally limit deliveries to cars based on price alone.

[Bodaway]

On 2/19/2022 at 12:23 PM, rperez817 said:

 

Thank you FordBuyer sir, you are probably thinking of the Edmunds study covering new car purchases in January 2022. It did take into account all of the Ford models you noted. Ford branded vehicles overall averaged about $163 above MSRP, Lincolns averaged $510 below MSRP. 8 out of 10 of Car Shoppers Paid Above Sticker Price for New Vehicles in January, According to Edmunds | Edmunds

 

MSRP vs ATP by Vehicle Make
January 2022

Make	MSRP	ATP	Difference
Cadillac	$76,914	$80,962	$4,048
Land Rover	$87,457	$90,022	$2,565
Kia	$32,218	$34,507	$2,289
Porsche	$103,590	$105,311	$1,721
Acura	$49,316	$51,017	$1,701
Genesis	$59,933	$61,536	$1,603
Honda	$32,440	$33,948	$1,508
Hyundai	$33,545	$35,043	$1,498
Audi	$60,965	$62,290	$1,325
Jaguar	$66,828	$67,937	$1,109
Toyota	$37,174	$38,189	$1,015
Nissan	$32,529	$33,433	$904
Infiniti	$53,709	$54,529	$820
Dodge	$48,498	$49,227	$729
Mercedes-Benz	$67,817	$68,536	$719
Fiat	$29,818	$30,536	$718
GMC	$58,749	$59,426	$677
Chevrolet	$47,728	$48,353	$625
Subaru	$34,164	$34,756	$592
Chrysler	$47,779	$48,239	$460
Volkswagen	$35,046	$35,474	$428
Jeep	$49,220	$49,573	$353
Mazda	$32,785	$33,097	$312
Lexus	$53,490	$53,725	$235
Mitsubishi	$29,309	$29,516	$207
Ford	$49,680	$49,843	$163
Buick	$41,716	$41,733	$17
Mini	$36,440	$36,289	-$151
BMW	$63,209	$63,010	-$199
Ram	$60,057	$59,592	-$465
Lincoln	$62,202	$61,692	-$510
Volvo	$57,870	$57,001	-$869
Alfa Romeo	$54,644	$51,223	-$3,421
Industry Average	$44,989	$45,717	$728

It would be interesting to see this information on a pre pandemic basis versus the current state of car sales.

[2005Explorer]

The dealers who are charging these large market adjustments especially on large SUVs and trucks better get their vehicles sold quickly because this war in Ukraine is likely to drive gas prices way up. Even "hot" vehicles like the Bronco which doesn't have that great of fuel economy will suffer. If the market falls out on vehicles that get relatively poor fuel economy there are going to be a lot of people who paid these huge market adjustments upside down big time. Heck even if auto sales don't collapse as bad as they did in 2009 there are still going to be a lot of people upside down and upside down.

 

If this keeps up maybe Ford needs to open a second Maverick plant.

Edited February 24, 2022 by 2005Explorer

[Black Label]

1 hour ago, 2005Explorer said:

The dealers who are charging these large market adjustments especially on large SUVs and trucks better get their vehicles sold quickly because this war in Ukraine is likely to drive gas prices way up. Even "hot" vehicles like the Bronco which doesn't have that great of fuel economy will suffer. If the market falls out on vehicles that get relatively poor fuel economy there are going to be a lot of people who paid these huge market adjustments upside down big time. Heck even if auto sales don't collapse as bad as they did in 2009 there are still going to be a lot of people upside down and upside down.

 

If this keeps up maybe Ford needs to open a second Maverick plant.

Interesting. You're probably right. Odd how many people want an SUV as to pay well over MSRP, which is historically unheard of. But, then the same people will decide against an SUV based on fuel pricing, which will be less money in the long run than paying over MSRP. So much for buying a vehicle you can afford, no matter what the price of gas is. 

[akirby]

25 minutes ago, Black Label said:

Interesting. You're probably right. Odd how many people want an SUV as to pay well over MSRP, which is historically unheard of. But, then the same people will decide against an SUV based on fuel pricing, which will be less money in the long run than paying over MSRP. So much for buying a vehicle you can afford, no matter what the price of gas is. 

Most only look at the payment not the price and they’re impatient.  I probably would have done the same when I was younger.  And they often use false data to rationalize their purchase (I’ll save on gas or repairs - but nowhere near enough to offset the cost of the new one).  
 

I don’t rationalize anything any more - I just say I want it and then decide whether to buy it or not.  And I figured out a good way to keep it in perspective. Let’s say a new vehicle would cost $20k more than keeping the current one.  Would you rather have the new one or the old one with $20K sitting in the front seat?

[Black Label]

2 hours ago, akirby said:

Most only look at the payment not the price and they’re impatient.  I probably would have done the same when I was younger.  And they often use false data to rationalize their purchase (I’ll save on gas or repairs - but nowhere near enough to offset the cost of the new one).  
 

I don’t rationalize anything any more - I just say I want it and then decide whether to buy it or not.  And I figured out a good way to keep it in perspective. Let’s say a new vehicle would cost $20k more than keeping the current one.  Would you rather have the new one or the old one with $20K sitting in the front seat?

True, the old "What payment can you afford" technique. 

 

I'll take the new one with $20k lol. 

[rperez817]

On 2/21/2022 at 6:21 AM, jasonj80 said:

Where do you see that Lincoln is not profitable? That is selling price vs MSRP. 

 

Yes sir jasonj80, the Edmunds study that FordBuyer mentioned doesn't concern profitability of automakers or brands, but as you mentioned how much over or under MSRP customers are paying for vehicles on average.

 

Regarding profitability, automotive industry analysts, specifically those from Morgan Stanley and AlixPartners, estimated that Lincoln is not profitable as recently as 2018. It probably is still unprofitable as of now, but only Ford Motor Company management accountants, controllers, and executives know for sure. And they won't share that info.

[rperez817]

Today one of the direct to consumer automakers, Rivian, was in the news for marking up prices on its R1T and R1S models not just for new customers, but also those who already made a reservation but didn't yet take delivery. Not surprisingly a lot of Rivian customers felt fleeced and cancelled their reservations. Rivian buyers are canceling at alarming rates after price increases - Electrek

 

Edited March 2, 2022 by rperez817

[rperez817]

21 hours ago, rperez817 said:

Today one of the direct to consumer automakers, Rivian, was in the news for marking up prices on its R1T and R1S models not just for new customers, but also those who already made a reservation but didn't yet take delivery. Not surprisingly a lot of Rivian customers felt fleeced and cancelled their reservations. Rivian buyers are canceling at alarming rates after price increases - Electrek

 

Rivian CEO R.J. Scaringe backtracked on the decision to mark up prices for reservation holders and pre-orders. Rivian will now honor the original, lower prices for these customers, even those who cancelled their orders and wish to reinstate. A Letter from Rivian CEO RJ Scaringe on Pricing Updates | Business Wire

 

One of the things we talk about a lot internally is that we will make mistakes – it’s part of building something complex. The key is to learn from them and address them when they are made. It is how we grow. We made a mistake in how we approached our pricing changes, and what is important now is that we fix it.

For anyone with a Rivian preorder as of the March 1 pricing announcement, your original configured price will be honored. If you canceled your preorder on or after March 1 and would like to reinstate it, we will restore your original configuration, pricing and delivery timing. Our team will be sending an email in the next few days with more details.

[akirby]

But but but ordering from the factory protects you from markups……

[FordBuyer]

Jalopnik has a story out about trying to buy the new Kia EV 6 from a Kia dealer. What a nightmare. Even getting a test drive is almost impossible. And the Kia dealers are marking them up big time if they even accept your order. 

[FordBuyer]

2 hours ago, rperez817 said:

 

Rivian CEO R.J. Scaringe backtracked on the decision to mark up prices for reservation holders and pre-orders. Rivian will now honor the original, lower prices for these customers, even those who cancelled their orders and wish to reinstate. A Letter from Rivian CEO RJ Scaringe on Pricing Updates | Business Wire

 

 

 

 

This is turning into a real shit show. How can a lot of BEVs be sold with so many auto company dealers treating customers this way. I expect the age of vehicles on road to go up big time. 

[rperez817]

1 hour ago, FordBuyer said:

Jalopnik has a story out about trying to buy the new Kia EV 6 from a Kia dealer. What a nightmare. Even getting a test drive is almost impossible. And the Kia dealers are marking them up big time if they even accept your order. 

 

Even worse, Jalopnik reader Joel, who tried to buy an EV6 from local dealers in California (by far the #1 state in the U.S. for BEV purchases) had such a poor experience with those dealers that he ended up placing the order with a Kia dealer in Idaho. Kia Dealers Are Going To Kill The EV6 (jalopnik.com)

 

And what of our friend Joel? Did he ever buy an EV6? He informed he was actually able to finally place an order, but it's with a dealer in Idaho. He decided to buy out of state after some bullshit with Glendale Kia.

Good for him. But he shouldn’t have had to go thousands of miles to purchase a vehicle that’s readily available locally. If Kia wants buyers to transition to its EVs, it needs to deal with the problem on its hands: its dealers.

 

These dealership shenanigans aren't limited to Kia. All incumbent automakers with franchised dealerships have to deal with it to some extent. This is why Jim Farley said "the margins that we want to build to in BEV (Battery Electric Vehicle) are gonna be heavily dependent on a different go-to-market and customer experience."