Ford, GM Make Stronger Push to Stop Flipping, Price Gouging of Popular Models

[ridgebackpilot]

Interesting Car & Driver article on automakers pushing back against dealers charging ADM and customers flipping new EVs.

The article suggests ADM is applied only by a minority of dealerships, which isn't true here in northern California. Here, the vast majority of dealers mark up the MME and other in-demand new cars on their lots, sometimes by tens of thousands of dollars.

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[roamtheworld]

Interesting Car & Driver article on automakers pushing back against dealers charging ADM and customers flipping new EVs.

The article suggests ADM is applied only by a minority of dealerships, which isn't true here in northern California. Here, the vast majority of dealers mark up the MME and other in-demand new cars on their lots, sometimes by tens of thousands of dollars.

Like many traditional writers, they are really out of touch on ADM. In Texas, New Mexico, Colorado, and Louisiana all states I did a search for our Mach E and continue to search for a second EV most if not all dealers are adding ADM. I also haven't had much success getting an order placed for an EV right now (July/August).

 

[Logal727]

They don’t charge ADM when Ford calls and asks if they charge ADM.

 

[w0ger]

Dealers here in the Twin Cites don’t charge ADM (technically) instead they add $10-15k in bogus accessories.

 

[Socalsp3]

is $5k clear coat not ADM?

 

[Mach1E]

All of this is still temporary. When supply chains get back to normal it will go away.

I do not agree with dealers who CHANGE the price after you ordered. That’s absolutely wrong.

But an ADM on cancelled orders? That‘a just normal supply and demand.

Used car prices went up 40% in the last few years. No one seems to complain.

New car prices go up 10-20% and people freak out.

Just don’t buy the car if the price is “too high.”

The only reason the manufacturers don’t like ADM is that it’s the dealers getting the extra profit and not them.

But in reality, they’re both “winning” right now. Remember when you could get $8-10k in rebates on a new F150? That was only a few years ago and Ford is who paid that money.

Now? They have pretty much no rebates on anything.

What’s the difference between taking away rebates, raising MSRP and an ADM?

All result in higher prices to the consumer.

 

[Parasmoney]

The only way to combat this is to not buy cars and let the auto makers suffer. The reality is that this will never happen because people need cars when they need them and for people who can afford expensive cars, 10k ADM won't break their bank account and will continue to buy when they feel like it.

 

[Chuck]

Interesting Car & Driver article on automakers pushing back against dealers charging ADM and customers flipping new EVs.

The article suggests ADM is applied only by a minority of dealerships, which isn't true here in northern California. Here, the vast majority of dealers mark up the MME and other in-demand new cars on their lots, sometimes by tens of thousands of dollars.

This clearly anti-free market.

 

[ridgebackpilot]

But an ADM on cancelled orders? That‘a just normal supply and demand.

What’s the difference between taking away rebates, raising MSRP and an ADM?

The law of supply and demand doesn't trump business ethics. Ethical dealers don't price-gouge their customers by charging ADM.

ADM is a reputational risk to Ford, GM, etc. and they know it. Unscrupulous dealers drive potential customers away every day.

And there's a big difference between dealers charging ADM and manufacturers raising MSRP. Dealers add zero value to a car; manufacturers costs change all the time and some are passed on to customers.

 

[Mach1E]

The law of supply and demand doesn't trump business ethics. Ethical dealers don't price-gouge their customers by charging ADM.

ADM is a reputational risk to Ford, GM, etc. and they know it. Unscrupulous dealers drive potential customers away every day.

And there's a big difference between dealers charging ADM and manufacturers raising MSRP. Dealers add zero value to a car; manufacturers costs change all the time and some are passed on to customers.

You seem to think there is a “philosophical difference” but there isn’t a “mathematical difference.”

You use words like “price gouge” and “unscrupulous” and “ethical” when talking about ADM.

Those are definitely all subjective opinion descriptions.

So clearly you think it’s fine that Tesla raised the MSRP by $9000 last year on everyone, but it’s somehow unethical if a car dealer charges an ADM to a WILLING BUYER who doesn’t want to wait 9 months in line to buy a Mach E?

That’s fine if you feel that way. It’s your opinion.

I just don’t see a philosophical difference in my opinion.

Used cars are always “market price.” And no one seems to care that they went up 40%. I guess I’m a greedy unscrupulous unethical and individual because when CarMax offered me $45,000 for my 2015 Chevy SS, I took it!

New cars are also always “market price.” Whether it’s a rebate, price drop, price increase or MSRP……. The buyers pretty much decide what they’re willing to pay.

Again, unless it’s bait and switch or something like that, I don’t see an ethical dilemma here.

 

[ridgebackpilot]

Again, unless it’s bait and switch or something like that, I don’t see an ethical dilemma here.

It's not semantics or philosophy; it's a matter of business ethics. As in Business Ethics 101 at any business school. Just because you can make money gouging your customers doesn't mean you should.

My preferred Ford dealer near where I live advertises that they NEVER mark up new cars (see below). That's because they're more interested in cultivating a loyal customer base who will return again and again to their dealership. They consider ADM short-sighted at best and recognize that it sends the wrong signal to their customers about the dealership and about Ford products.

A friend of mine calls ADM the dealer's "F*ck You Fee" because it illustrates just what they think of their customers!

 

[Mach1E]

It's not semantics or philosophy; it's a matter of business ethics. As in Business Ethics 101 at any business school. Just because you can make money gouging your customers doesn't mean you should.

My preferred Ford dealer near where I live advertises that they NEVER mark up new cars. That's because they're more interested in cultivating a loyal customer base who will return again and again to their dealership. They consider ADM short-sighted at best and recognize that it sends the wrong signal to their customers about the dealership and about Ford products.

A friend of mine calls ADM the dealer's "F*ck You Fee" because it illustrates just what they think of their customers!

Except that what you’re describing is semantics.

You’re cherry picking a single version of price increases and calling it unethical and gouging.

Somehow charging MSRP makes your car dealer the “good dealer.”

Rewind the clock a few years and charging MSRP would be “gouging.”

You’re assigning “good and bad” philosophical definitions to how pricing works based on your own relative opinion.

Semantics.

So I’ll ask you the question- has your local Ford dealer raised the prices they sell their used cars for?

Is that price increase significantly more in the last few years than new car price increases?

And you’re ok with that?

(Rhetorical questions because I know the answers are yes and yes and yes).

I get it, you don’t like ADM. You think it’s somehow morally wrong. Many many here will agree with you.

Just trying to get you to think a little more objectively about it.

It’s just another normal price increase with a different name.

 

[ridgebackpilot]

Except that what you’re describing is semantics.

You’re cherry picking a single version of price increases and calling it unethical and gouging.

Somehow charging MSRP makes your car dealer the “good dealer.”

Rewind the clock a few years and charging MSRP would be “gouging.”

You’re assigning “good and bad” philosophical definitions to how pricing works based on your own relative opinion.

Semantics.

So I’ll ask you the question- has your local Ford dealer raised the prices they sell their used cars for?

Is that price increase significantly more in the last few years than new car price increases?

And you’re ok with that?

(Rhetorical questions because I know the answers are yes and yes and yes).

I get it, you don’t like ADM. You think it’s somehow morally wrong. Many many here will agree with you.

Just trying to get you to think a little more objectively about it.

It’s just another normal price increase with a different name.

"Semantics"?! Tell that to the thousands of Ford customers who have walked away from deals because they don't want to pay ADM. For many people, ADM represents a real barrier to buying a car they want.

I assume you don't have a business degree, so you don't understand the concept or rules of business ethics. But many of us do.

Business ethics isn't just a discretionary, "feel good" thing. It's a way of defining and expressing the values of a company. And that often translates into real revenue and market advantages.

After all, who wouldn't want to buy from a company with superior business ethics? A company that respects and treats their customers better than others?

Is all of that just "semantics"? No, it's about values and ethics, which today are very real, tangible concepts in business. And something any successful business had better consider carefully.

Trying to defend ADM by arguing it's just the law of supply and demand is a common fallacy. But that just doesn't fly for businesses that have values and ethics. They know this isn't a semantic argument, but one that has a very real impact on their customers and the future of their businesses.

 

[Mache65]

Except that what you’re describing is semantics.

You’re cherry picking a single version of price increases and calling it unethical and gouging.

Somehow charging MSRP makes your car dealer the “good dealer.”

Rewind the clock a few years and charging MSRP would be “gouging.”

You’re assigning “good and bad” philosophical definitions to how pricing works based on your own relative opinion.

Semantics.

So I’ll ask you the question- has your local Ford dealer raised the prices they sell their used cars for?

Is that price increase significantly more in the last few years than new car price increases?

And you’re ok with that?

(Rhetorical questions because I know the answers are yes and yes and yes).

I get it, you don’t like ADM. You think it’s somehow morally wrong. Many many here will agree with you.

Just trying to get you to think a little more objectively about it.

It’s just another normal price increase with a different name.

I agree with you on this. Another reason to consider is, volume, no more trade volume for a dealer. To stay in business and keep the lights on they have to charge more for less volume.

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