Dealers getting in the way

[JamesInWeston]

The latter. You’ll pay the price the website quotes when ordering, which is MSRP.

In my experience with Ford.com online ordering my CalRt1 (still waiting) the Ford order process will show you the ADM but not whatever standard dealer fee the selected dealer charges. For example, here in south Florida the ADMs varied from nil to $3,000. I chose a nil ADM dealer, with a standard (applied by dealer to any new car purchase) dealer fee of $749. Everything agreed to in writing.

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[Frankie]

I’m not sure what supply and demand has to do with Ford preventing dealerships from discounting vehicles by taking a smaller cut of the sale bonus. Dealership discounts is where good deals are made, not Factory incentives, and Definitely not paying MSRP.
Maybe you’re just focusing on ADMs going away but I couldnt care less about ADMs because I’ll never pay it. The problem is that Fords new business model of Minimum sale prices are bad for consumers.
From the article: “ Usually dealer invoice pricing is lower, allowing dealers to offer deals below MSRP, which just isn’t as clean or simple to a consumer, who may rather want to just pay what the car costs instead of worrying about getting the best deal.”
Who can possibly think this is a good thing…

Depends what type of vehicle you're usually buying. Getting a Raptor right now for MSRP is a screaming deal. Getting a Lariat for MSRP, not so much.

 

[Jim Glass]

As has been discussed here...
https://jalopnik.com/ford-wants-to-compete-with-tesla-but-its-dealers-are-g-1847694720

Here's a new story on ADM dealers in R&T. It's about Broncos but would also apply to the Mach E sales as many of you know.
https://www.roadandtrack.com/news/a37634787/how-to-avoid-markup-broncos/?source=nl

 

[Jim Glass]

In my experience with Ford.com online ordering my CalRt1 (still waiting) the Ford order process will show you the ADM but not whatever standard dealer fee the selected dealer charges. For example, here in south Florida the ADMs varied from nil to $3,000. I chose a nil ADM dealer, with a standard (applied by dealer to any new car purchase) dealer fee of $749. Everything agreed to in writing.

As reported by R&T today, even getting it all in writing does not protect you from an ADM! https://www.roadandtrack.com/news/a37634787/how-to-avoid-markup-broncos/?source=nl

 

[SpaceEVDriver]

If dealers had to compete on the open market, it would be an entirely different story, but they are way too powerful politically, so we don't actually see anything like a free market. Their existence does not protect consumers, it protects powerful lobbyists.

In my area, there's one very large dealer and a few smaller dealers, and there are no brands that are sold by two dealers. There is zero competition, so we typically see a $5k to $10k ADM for nearly all vehicles, they always add useless junk to the vehicle, and we almost never see MSRP or are able to negotiate below MSRP. The only option for negotiation is to drive two hours each way to the Valley and then deal with skeevy dealers there. It's usually a full-day "adventure" that ends up costing as much as we save (I count my time as more valuable than my money, so spending six to eight hours making a trip to buy a car is excessively expensive).

Direct sales by an auto manufacturer are legal in Arizona if there are no existing dealers for that brand, so Tesla can sell their vehicles here, but most manufacturers cannot.

We consumers get to pay for someone to be in the way of buying a vehicle; in time, in frustration, and in money.

I, for one, cannot wait to never have to interact with a dealer when buying a new vehicle. I wish Ford had spun off a new brand for their EV line.

 

[Mach-Lee]

I, for one, cannot wait to never have to interact with a dealer when buying a new vehicle. I wish Ford had spun off a new brand for their EV line.

Yes, Ford needs to do the Saturn thing like GM did in the 90's. Just don't make them out of plastic please...

 

[ncaadam]

If dealers had to compete on the open market, it would be an entirely different story, but they are way too powerful politically, so we don't actually see anything like a free market. Their existence does not protect consumers, it protects powerful lobbyists.

This is so true and also so ironic. It’s my understanding that one of the main reason dealers started was to protect consumers from OEM monopolies.

whoever mentioned buying up dealerships, I’m onboard with this. I think the dealer as a concept serves a purpose. Mostly in selling used cars and servicing vehicles. The latter is something that Tesla (and others coming) struggle with. If you want long-term customers, servicing and on-going support needs to be accessible and reasonable in both speed, availability, and pricing.

 

[shutterbug]

Fair point but there won’t really be any incentives to discount especially since Ford cut their initial sales profit for single units.
I have 25 dealers within 50 miles from me, everyone has to advertise the same price, what’s the incentive to chose a particular dealer?
The people who never researched and just paid whatever the dealer wanted won’t see a difference. The people who researched online for different dealer incentives will only see the same price everywhere. The people who negotiated through email with a bunch of dealers will probably not get any incentives in writing due to dealers being overly cautious about loosing more of their incentives from Ford. The build to order model will eliminate overstock discounts as well.
This only works if you move to 100% direct to consumer sales and pass on the savings to the customer, but why would they?

Instead of passive "researching" online, visit those dealers. Also while MAP prevents the dealers from advertising the lower price, they could simply state that they will sell below MSRP. That's not a new tactic and is done in many industries,

 

[TheSeg]

I wonder, and am pretty sure this discussion is probably within Ford and probably all manufacturers, as to whether they will eventually start buying out dealerships and change the way they do business moving forward.

Direct sales is only legal in about 22 states, and about 11 more can negotiate to sales. So it can't be done everywhere. Once an automaker does this once, it sends a very clear signal to the rest of the US on intentions. No going back from there and I'm sure that's a lot of unknown variables to adapt to.

Don't get me wrong, I am all for direct sales. To claim that car sales are somehow different from any other consumer goods of any cost doesn't hold water with me. Not perfection, but once Ford deals directly with customers they'll have better metrics to understand and improve the customer experience.

 

[Motomax]

Instead of passive "researching" online, visit those dealers. Also while MAP prevents the dealers from advertising the lower price, they could simply state that they will sell below MSRP. That's not a new tactic and is done in many industries,

How many dealerships are completely lost on Ford options. You expect them to know the fine print on MAP and what they can and can’t say in writing.
Idk about you but I’d rather not waste an entire week visiting 20+ dealerships when I can just email bomb them and ignore 85% of them right off the bat.
There aren’t that many consumer goods where you can save thousands of dollars just by going to the right store.
When Walmart puts something on sale, Amazon will price match them. Why? Because they want the sale instead. If Walmart can’t advertise any discounts, Amazon won’t discount the item because convenience will give them the sale instead.
MAP is fords way of reducing high volume discount dealers and redistributing the customers to the crappy dealers that don’t discount because dealer choice will be based on convenience instead of price. This makes up for the reduced profit margins.

 

[scoopman]

Web ordering seems to help the manufacturer maintain MSRP pricing by not allowing discounts, but it does little to really help move cars or equalize the pricing for supply and demand in a market. What would really help is if the pricing was more dynamic in an online order (and also for what the dealer offers walk-ins off the lot), to help balance out supply and demand to reach the ideal amount of supply for cars in a market.

Instead what we have is a system where dealers decide how much to charge for cars and do everything possible to make money in ways the customer doesn't realize, including the financing, incentives and discounts not offered, useless add-ons and service packages, etc. It's not just the pricing, they do everything possible to create imbalance on what the real market price of a car would be in a local market.

I can't wait for more car dealers to fail so they can be replaced

Most of the comments here are focused on ADM. But ADM is actually fairly rare. It normally applies to high demand low volume vehicles. There are other dealer shenanigans designed to separate [uninformed] buyers from their cash:

• Unwanted/overpriced add-ons such as wheel locks, paint protection, undercoating, tinting, striping, leather/fabric protection, and [my favorite] nitrogen in tires. Yes some of these are useful, but dealers always charge a lot more than it would cost outside of dealer's shop. My dealer attempted to charge me $1,500 for all of those. They did succeed in charging me $80 for 5 minutes of work to program my 2nd FOB.
• Financing shenanigans. Dealers love customers with less than stellar credit.That way they can steer you away from Ford Credit (for example) and to some shady bank with high interest and opaque practices. They get a piece of the action and customer is screwed. I've gotten into practice of pre-arranging financing through my credit union before even showing up at the dealer's showroom. So if the dealer tries to screw me, I have an alternative. That typically results in a small hit against my credit score, but it quickly goes away. For MME, I chose Ford Options. I had the dealer's finance guy go back 4 times to redo it, because the first 4 times the payment or residual number was higher than it was supposed to be.
• Shady fees. My dealer tried to charge me $500 doc fee and $300 online filing fee, which are for the same thing. With X-Plan they are limited to $100, which is still way too high for essentially paying a clerk to sit in front of a computer for 5 minutes and enter your information on the state's website. My favorite is charging tire disposal fee, $2.50 X 5, even though you're not disposing of any tires and only get 4 tires (no spare).
• Wrong state tax fees. My dealer attempted to charge me $1,000 for AZ VLT, even though the correct amount for EV was $20. The states with different sales taxes based on city essentially created a system that's tailor made for abuse.

This sounds like the awesome experience I'm expecting. Out of curiousity, did you basically do the Ford Options calculations on the Ford web site before you showed up to understand what you believe you should have had? How did you drive making them change it as opposed to just telling you "well this is the deal you get from Ford Options". Just curious.

 

[Tarynem]

There is basically a disclaimer stating as much when you reserve on the Ford website. Something like you are accepting what the dealer says the price will be. Doesn't mean a dealer would do that but certainly annoying.

It also says dealer may markup price for car accessories. The markups are not for accessories. I saw a RWD MME Premium being sold for $65k. Ridiculous.

 

[yngwenli]

Direct sales is only legal in about 22 states, and about 11 more can negotiate to sales. So it can't be done everywhere. Once an automaker does this once, it sends a very clear signal to the rest of the US on intentions. No going back from there and I'm sure that's a lot of unknown variables to adapt to.

Don't get me wrong, I am all for direct sales. To claim that car sales are somehow different from any other consumer goods of any cost doesn't hold water with me. Not perfection, but once Ford deals directly with customers they'll have better metrics to understand and improve the customer experience.

Yeah, the law may have to change, but honestly, in 15-20 years, it'll be as hard to find an ICE car as it is to find a manual transmission vehicle now. As we all know, dealerships usually hurt themselves and give them all a bad rap so people run to Tesla to not have to deal with it. Also, as older folks who demand the old kick the tires thing are gone (I'm an old fart myself), I think the younger generation has no issue just ordering something and waiting to get it since that's what they've grown up on. They don't need to sales pitch or guidance since there honestly, anyone doing quick internet services knows just as much and even MORE than most car salesmen.

There are tougher and tougher emmission standards in Europe and I think someone just posted that Ford had to send 2/3 of Mach-E there on this forum to meet those standards and why we're all getting delayed.

Various companies have already announced they plan to stop making internal combustion engines in various timeframes.

Randomly searching and saw this article:
https://www.hotcars.com/this-is-why...o-stop-producing-internal-combustion-engines/

Again, my point is the whole dealer model will collapse because EVs simply have less servicing needs. The legacy auto maker who realizes this and plans for the transition will be alive afterwards. With the chip shortage, car makers can honestly now build to order and eliminate excess AS WELL AS make MSRP. Just build whatever is desired and clean up their portfolios.

At the end of the day, blame covid, blame chips, but know what's coming and it's an opportune time to fix the dealership model over the next 10-15 years.

 

[Olds442]

Death, taxes, and auto dealership shenanigans.

 

[shutterbug]

Idk about you but I’d rather not waste an entire week visiting 20+ dealerships when I can just email bomb them and ignore 85% of them right off the bat.

If I'm going to drop a huge chunk of cash, I am willing to invest a bit of time, to make sure I don't get taken. I can see using email as part of this, but a phone call and a visit will probably come first.

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