Ford, GM Warn Dealers on Pricing

[akirby]

6 hours ago, AtlasBlue350 said:

Like someone else pointed out, it's kinda ironic that Ford is chastising it's dealers for charging over MSRP when they just announced a $1000 MSRP price increase. I guess it's OK if the factory does it, right?

 

MSRP isn’t the issue.  Buyers seeing MSRP when they configure the vehicle online then seeing MSRP on the dealer order sheet and then having another $5k-$10k added on months later when it arrives is the problem.

[Robin Hood]

On 2/9/2022 at 7:51 AM, CBears said:

I can understand dealerships needing to make a profit.  All the empty lots.  Nothing to sell means no profits from sales.  All of that said though, I think it is generally wrong to charge more for products during hard times.  I know morality doesn't really enter into the business bottom line but it should.  It just looks bad to have an MSRP right on the window and charge thousands more.

 

Does that mean when things get tough and sales are slow that all consumers should be willing to pay MSRP?

[Robin Hood]

6 hours ago, Black Label said:

Okay, I'll bite. What is a good price, to you?

 

A payment under $1200 a month is a good deal. Actual cost doesn't matter in today's society???

[akirby]

11 hours ago, BigUnixGeek said:

 

And that's what they want you to think, especially when they're the ones using the term to convince you how good a price it is.  But when they say that, they're STRONGLY IMPLYING (because this is what an invoice is in any other industry) that it's the price they pay, which is shady if not downright dishonest.  It's as meaningless a number as MSRP as it's just a number Ford picked out of thin air.

Ok, so you don’t like dealers trying to make you think that’s the bottom line price they pay.  I get that and agree it’s dishonest.  But that doesn’t mean the invoice price isn’t useful in negotiations especially if you understand holdbacks.

[akirby]

38 minutes ago, Robin Hood said:

 

Does that mean when things get tough and sales are slow that all consumers should be willing to pay MSRP?

That’s my point.  Nobody has a problem paying well below MSRP a when it’s a buyer’s market (my F150 was discounted almost $10k) but they do t like it when it’s the other way around.

[Robin Hood]

40 minutes ago, akirby said:

That’s my point.  Nobody has a problem paying well below MSRP a when it’s a buyer’s market (my F150 was discounted almost $10k) but they do t like it when it’s the other way around.

 

I'm in construction and got the crap kicked out of me during the financial downturn. Client's didn't mind squeezing us for every last penny, because supply and demand were out of balance.

 

I am technically in the service industry, not the commodity business, so it's a little different then vehicals. IMO these trucks are a commodity. For the most part, people ended up getting what they paid for by squeezing that hard. There was always someone willing to do it cheaper and deliver poor quality and service. We found our good client's and took care of them, but they still expected a deal. Things are different today, it's a lot easier to find good client's willing to pay a fair price for good work. No matter what market we are in, we charge what the market will bear for exceptional service and quality. Sometimes that pay is good, sometimes it's not so good. It's no different for any other business...gotta make hay when the grass is green.

Edited February 11, 2022 by Robin Hood

[akirby]

I never try to negotiate a dealer below invoice - I consider that the minimum profit they deserve.  Now if they offer below invoice I’ll take it but I don’t beat them up about it like some people.   Asking someone to work for free or almost free is just rude and selfish.

[Boss Hog]

On 2/9/2022 at 8:51 AM, CBears said:

I can understand dealerships needing to make a profit.  All the empty lots.  Nothing to sell means no profits from sales.  All of that said though, I think it is generally wrong to charge more for products during hard times.  I know morality doesn't really enter into the business bottom line but it should.  It just looks bad to have an MSRP right on the window and charge thousands more.

Especially when dealer invoice is 10% to 12% under MSRP already.  They are just doubling up per unit.  The consumer will puke a few years down the road when they financed all this overage and its actual book value is less than the amount still owed.   There are a lot of people upside down in depreciable assets and don’t even realize it ?

[fuzzymoomoo]

26 minutes ago, Boss Hog said:

Especially when dealer invoice is 10% to 12% under MSRP already.  They are just doubling up per unit.  The consumer will puke a few years down the road when they financed all this overage and its actual book value is less than the amount still owed.   There are a lot of people upside down in depreciable assets and don’t even realize it ?

And this is why so many people opt to lease. 

Edited February 11, 2022 by fuzzymoomoo

[Watson138]

1 hour ago, Boss Hog said:

Especially when dealer invoice is 10% to 12% under MSRP already.  They are just doubling up per unit.  The consumer will puke a few years down the road when they financed all this overage and its actual book value is less than the amount still owed.   There are a lot of people upside down in depreciable assets and don’t even realize it ?

I'm afraid it's going to create problems for a lot of people.

[Watson138]

8 hours ago, akirby said:

I never try to negotiate a dealer below invoice - I consider that the minimum profit they deserve.  Now if they offer below invoice I’ll take it but I don’t beat them up about it like some people.   Asking someone to work for free or almost free is just rude and selfish.

Agreed. They deserve to make money for their work.

[akirby]

3 hours ago, Boss Hog said:

Especially when dealer invoice is 10% to 12% under MSRP already.  They are just doubling up 

 

 

Not even close.  On Maverick it’s as little as $200 between invoice and MSRP.  Even a $60k Expedition is only $3k or 5%.

[BigUnixGeek]

18 hours ago, Black Label said:

Okay, I'll bite. What is a good price, to you?

You're missing my point.

[Black Label]

3 hours ago, BigUnixGeek said:

You're missing my point.

Okay, well, you can tell me what the point is if you want. 

[Monoman]

On 2/11/2022 at 7:31 PM, Watson138 said:

Agreed. They deserve to make money for their work.

 

 I don't disagree with that but how much actual work are they really doing for me if someone goes to ford.com and creates a build sheet for exactly what they want?   I agree that the more effort they put into a sale or value added for the customer (test drives, answering questions, etc) then they need to get more in return. 

[fuzzymoomoo]

40 minutes ago, Monoman said:

I don't disagree with that but how much actual work are they really doing for me if someone goes to ford.com and creates a build sheet for exactly what they want?

I've done this for almost every new car I've acquired, with exception of my current Fusion. If nothing else I feel it's a good starting point for negotiations and in days past what is reasonably attainable based on what they have on the lot. Twice I've gotten lucky and they had exactly what I wanted at a price I could agree to and the third time a dealer trade was involved. 

[Robin Hood]

On 2/11/2022 at 8:19 AM, akirby said:

 

 But that doesn’t mean the invoice price isn’t useful in negotiations especially if you understand holdbacks.

 

IMO the invoice is useful. The market conditions will determine how much under or over you will have to pay. With a little homework, you can discover the market temperature pretty quickly.

 

 

[Watson138]

1 hour ago, Monoman said:

 

 I don't disagree with that but how much actual work are they really doing for me if someone goes to ford.com and creates a build sheet for exactly what they want?   I agree that the more effort they put into a sale or value added for the customer (test drives, answering questions, etc) then they need to get more in return. 

Agreed. There are certainly some dealerships that do very little. That's why I'd be a fan of going to a direct to consumer model. Cut out the middle man.

[rperez817]

22 minutes ago, Watson138 said:

That's why I'd be a fan of going to a direct to consumer model. Cut out the middle man.

 

The direct to consumer model is certainly the superior retail sales model for BEV, but as mentioned earlier in this thread and in other threads, it's not practical for incumbent automakers like Ford and GM in the U.S. due to current regulations. 

 

I don't think these incumbent automakers want to fight the legal battles necessary to implement direct to consumer model for BEV sales. Best things for Ford and GM to do at this point are.

1. Impose sanctions on dealers that treat their BEV customers and prospects poorly (such as reduced vehicle allocations). This is what Jim Farley intends to do.
2. Improve the digital infrastructure that supports the vehicle ordering and delivery process for both dealers and customers.
3. Require a firm commitment for dealers to embrace BEV and offer a buyout for dealers that refuse. Cadillac is doing this.
4. Provide technical training and marketing support for their dealership bodies overall to help them succeed in the ongoing transition to an all-electric future.

[Rangers09]

2 hours ago, Watson138 said:

Agreed. There are certainly some dealerships that do very little. That's why I'd be a fan of going to a direct to consumer model. Cut out the middle man.

 

Each model has pros and cons, but the dealer direct model doesn't work for me, especially for the delivery process. With a dealer involved, if the truck is damaged in transit, or isn't correct, you simply refuse it until the dealer makes it right. I also have no desire to do my own prep. In the current times, when you have a competent dealer, they are working in the background with their Regional Manager to assist getting your truck built within the commodity restraints. An individual contacting the manufacturer is most likely ineffective.

 

With factory direct, if it's damaged during delivery, I have most likely already paid for it and am now stuck with either shipping it back, or finding someone to fix it.

[Rangers09]

1 hour ago, rperez817 said:

 

The direct to consumer model is certainly the superior retail sales model for BEV, but as mentioned earlier in this thread and in other threads, it's not practical for incumbent automakers like Ford and GM in the U.S. due to current regulations. 

 

I don't think these incumbent automakers want to fight the legal battles necessary to implement direct to consumer model for BEV sales. Best things for Ford and GM to do at this point are.

1. Impose sanctions on dealers that treat their BEV customers and prospects poorly (such as reduced vehicle allocations). This is what Jim Farley intends to do.
2. Improve the digital infrastructure that supports the vehicle ordering and delivery process for both dealers and customers.
3. Require a firm commitment for dealers to embrace BEV and offer a buyout for dealers that refuse. Cadillac is doing this.
4. Provide technical training and marketing support for their dealership bodies overall to help them succeed in the ongoing transition to an all-electric future.

 

Not sure why you are bringing your BEV preferences over to the Super Duty Forum, since at the present time we have zero BEV options and none on the horizon.

 

The direct to consumer model is an interesting discussion, but I suggest keeping it to Super Dutys.

[sajohnson]

On 2/9/2022 at 9:51 AM, CBears said:

I can understand dealerships needing to make a profit.  All the empty lots.  Nothing to sell means no profits from sales.  All of that said though, I think it is generally wrong to charge more for products during hard times.  I know morality doesn't really enter into the business bottom line but it should.  It just looks bad to have an MSRP right on the window and charge thousands more.

 

It definitely looks bad.

 

I'm not about to defend car dealers.  I've had more than my share of bad experiences with them.  As a buyer, of course I don't like to see ADM on the sticker.  A couple considerations though:

 

* MSRP is just a number.  It has some basis in reality of course, but supply and demand ultimately control price -- which can be higher, but also lower.

* Unless the franchise agreement says otherwise, dealers are free to charge what the market will bear.
* If there were no "MSRP", or the MSRP as significantly higher than market price, a lot of the perceived problem would not exist.  If Ford set stupid-high sticker prices, buyers would think they got a deal.  
* There are any number of other makes, models, and dealers.  It's not like they are the only supplier of baby formula at a refugee camp.  ADM might seem like price gouging, but it does not fit the legal definition.

The question is, what (if anything) can be done about it?  I'd say the mfrs need to be convinced to put pressure on the dealers.  After all, the mfrs want to maximize their profit.  If dealers are charging ADM that helps their bottom line but HURTS the mfrs due to lower overall sales numbers.  Also, as you said, it looks bad.  It's bad for their corporate image to have dealers squeezing every last dollar they can from customers.  

 

Of course, that could backfire.  In some cases, the mfr might take a look at the market and instead of insisting on their original MSRP with no ADM, they might decide to take some of that "adjusted market value" for themselves by bumping up the invoice and MSRP. 

 

 

[Monoman]

3 hours ago, rperez817 said:

 

The direct to consumer model is certainly the superior retail sales model for BEV, but as mentioned earlier in this thread and in other threads, it's not practical for incumbent automakers like Ford and GM in the U.S. due to current regulations. 

 

I don't think these incumbent automakers want to fight the legal battles necessary to implement direct to consumer model for BEV sales. Best things for Ford and GM to do at this point are.

1. Impose sanctions on dealers that treat their BEV customers and prospects poorly (such as reduced vehicle allocations). This is what Jim Farley intends to do.
2. Improve the digital infrastructure that supports the vehicle ordering and delivery process for both dealers and customers.
3. Require a firm commitment for dealers to embrace BEV and offer a buyout for dealers that refuse. Cadillac is doing this.
4. Provide technical training and marketing support for their dealership bodies overall to help them succeed in the ongoing transition to an all-electric future.

 

I'm sorry but the BEVs have nothing to do with their outdated sales model.  Direct sales, open pricing, and enforcing MSRP is best for all in the long run.   

[akirby]

6 hours ago, Monoman said:

 

 I don't disagree with that but how much actual work are they really doing for me if someone goes to ford.com and creates a build sheet for exactly what they want?   I agree that the more effort they put into a sale or value added for the customer (test drives, answering questions, etc) then they need to get more in return. 

How much work does Best Buy do when you walk in and buy a tv?  How much work does Target do when you buy stuff there?  It’s a business who has employees to pay, rent to pay, financing stock i ce tory for test drives, etc.  And they make a hell of a lot less profit percentage wise than any other retail business.

[rperez817]

2 hours ago, Rangers09 said:

The direct to consumer model is an interesting discussion, but I suggest keeping it to Super Dutys.

 

Good point Rangers09 sir. Sorry about that, I missed the forum location for this thread when I posted that reply.

 

Hopefully by the time Ford has a full lineup of BEV commercial vehicles ready including F-Series Super Duty by the end of the decade, many if not most of the dealership issues mentioned in this thread will be addressed.