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Ford says no more dealer markup...
- Thread starter nate704
- Start date
Ford can say whatever they want. By law, in most states, car manufactures cannot tell a dealer what to charge for a car.
They can incentivize dealers with additional holdback, and increased allocation. But setting the price of a new car is off the table.
They can incentivize dealers with additional holdback, and increased allocation. But setting the price of a new car is off the table.
The real problem is that there is always someone pays that markup with no issue.
whisperingshad
Active Member
Stealerships have done this FOREVER...they tried Marking up and Evo 8 5k when i was looking back in the day, I'm like bye.
sleepydoc
Well-Known Member
ultimately it's market economics. Like @nate704 said, people pay it so the dealers charge it. One can argue Tesla is doing the same thing since the price of the Model Y has gone up around $15k. The big difference is Tesla honors the price from when you ordered the car. I'm curious as to what will happen when the supply chain issues resolve and the market normalizes. With the dealer model, the MSRP will stay the same but the dealer markup will drop. Will Tesla drop the price of its cars? If it does, do the people who already have orders get the lower price?
strider
Active Member
It's boom and bust. Prior to the current supply problems, people were regularly complaining on this board about not being able to get a discount off of MSRP on a Tesla. Especially as Tesla had given some people discounts and incentives (Unlimited Supercharging for example) to take delivery before end of quarter to get their numbers up. It was quite common for people to hold out to see what sweeteners Tesla would offer at EOQ.
Prior to the current supply problems, Dealers rarely received MSRP for a vehicle. The discussion was always how much over invoice one would pay. The actual sales part of their business was quite low margin. They made their money on parts and service. Of course with EVs that part of their business will decrease so they will have to improve margins on the sales part to make up for this.
As others stated, the solution to high prices is high prices. They will run out of fools at some point.
Prior to the current supply problems, Dealers rarely received MSRP for a vehicle. The discussion was always how much over invoice one would pay. The actual sales part of their business was quite low margin. They made their money on parts and service. Of course with EVs that part of their business will decrease so they will have to improve margins on the sales part to make up for this.
As others stated, the solution to high prices is high prices. They will run out of fools at some point.
whisperingshad
Active Member
Tha_Ape
Active Member
I don't remember, but one of either Ford or VW admitted that their EVs are about to become not profitable. They may need to increase MSRP anyhow in order to become profitable...
(I think it was Ford Mach-E)
(I think it was Ford Mach-E)
I'm not to upset about dealers charging over MSRP on cars that they have in stock but charging extra on a car that was ordered months in advance for certain price should be illegal. And yet it is very common for someone to wait 6-9 months on a Mach-E and when the car finally shows up the dealer is asking for more money. And yes this is also one of major reasons why I went with Tesla vs Ford.
But they can set the allocation of desirable high profit vehicles to zero if a dealership pisses them off enough.
Keith
Yup. I waited 3 months after the EVO VIII hit North America because local dealership had a 5K markup.... after the car sitting there unsold for 3 months I asked if they were now willing to sell for MSRP and they said "sure, you got it boss"... they then offered me $5,000 less than NADA for my trade in....
I stopped dealing with that dealership at that point and drove an hour away and got one that weekend for MSRP and no "dealer add ons"
Keith
Raising the MSRP to keep up with inflation is fine, but a dealer mark up goes 100% to the dealership... if VW is losing money on an ID4 that the dealership makes 10K in pure profit on via a mark up it will cause bad blood and that dealership may be screwing themselves in the long run. Ford and other traditional OEM's are exploring the idea of making their EV's under a new brand name / spin off company that is not bound to the current dealership model, and direct marketing the cars to the customers. If the legacy OEM's jump on this bandwagon it will cause a legal fight that may get themselves (and Tesla) into direct to customer marketing in the states where direct sales are currently banned.
Keith
What I really wanted to point out is that I think the price gap (at MSRP level) will shrink between Tesla and it's competitors over time, most likely because they will increase the price. I don't think Tesla will significantly decrease price on existing models. Makes more sense for them to introduce a cheaper model.
I do agree the car dealers are a total rip off. I saw a local Hyundai dealer's "recommended" maintenance schedule when I thought I was getting Ioniq 5, and had a good laugh. $185 oil change couple of times (4x in my case) per year on an EV? Inspection costs $200 (2x per year)? And there's more. May be it's just this dealer, but it would have been more expensive to maintain I5 than a German car.
I'm glad that I don't have to deal with any dealership anymore.
I do agree the car dealers are a total rip off. I saw a local Hyundai dealer's "recommended" maintenance schedule when I thought I was getting Ioniq 5, and had a good laugh. $185 oil change couple of times (4x in my case) per year on an EV? Inspection costs $200 (2x per year)? And there's more. May be it's just this dealer, but it would have been more expensive to maintain I5 than a German car.
I'm glad that I don't have to deal with any dealership anymore.
They probably can't set it to zero, but yes they can lower it. However. Why would they? They are in the business of selling cars and trucks.
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