GT500 preorders - $$$ over MSRP gets even nastier

[abbas]

I had a car broker try and find me a GT500 for less than 10k over MSRP. Since I live in CA and everyone wants 15k or over, he called all the dealerships in the small towns in the midwest. He found out that these dealerships in order not to be the bad people for their overchages are inviting all the their potential buyers to an auction and are auctioning these cars off. That way the buyers can blame each other versus the dealerships. He said they have been auctioning these cars for atleast $20k.

 

Therefore I have cancelled all my pre-orders. I had about 4. I rather wait & see how this all plays out for another year or so. It is very hard to pay $15 or 20k over sticker for 'fluff'. A decked out GT500 with 20k over sticker will cost around $70k. For that much money, I would rather buy a Saleen S281E which has more HP that the GT500 and better handling.

 

To the people that already have their GT500s, is the 20k over MSRP really worth it?

 

 

Abbas

[Fastbackman]

I'll be getting mine any day now, but as for the 20k over, I couldn't tell you if it's worth it or not. Mine will be one of the rare msrp deals without a powerlease!

[dsabldvt]

I'll be getting mine any day now, but as for the 20k over, I couldn't tell you if it's worth it or not. Mine will be one of the rare msrp deals without a powerlease!

 

 

I may not get mine for a while, but it is worth it. I have a signed agreement for $200 under MSRP. I called over 50 dealers in the North Texas area until I found one that says he won't gouge me. He wasn't a President's winner or a SVT dealer or a very high volume dealer so his order is probably at the bottom of the list. I talked to Ford customer service on Monday and they said it was on material hold which I guess could mean anything. I think like anything, you need to be patient and especially dilligent in order to get things done. If my dealer doesn't shaft me, then it will be very much worth the wait and effort of finding this dealer.

[jrichard]

My understanding is "material hold" means the order has been submitted and acknowledged (e.g. it's at the DORA stage...and Ford tells you it's on material hold...that's where my order sits).

 

 

abbas...you cancelled your 'pre orders' because a broker you know called all the small town dealers in the midwest and they charging a lot? I don't understand your logic. First, that's a lot of phone calls....I'm guessing he didn't get around to all of them.

 

Second, it sounds as if you're lumping all these dealers together as if they're colluding to auction the cars so buyers will blame each other for high prices. Collusion among small dealers over a large geographic area is functionally impossible. Not to mention underlying demand issues.

 

Third, I don't understand what your pre-orders have to do with phone calls a broker made. Maybe it's just that I don't know what you mean when you say pre-order...I'm assuming that means an agreement you have made to purchase the car....which would mean, typically, an agreement on price. Otherwise it's nothing but being on a list to get called when the car arrives.

[abbas]

My understanding is "material hold" means the order has been submitted and acknowledged (e.g. it's at the DORA stage...and Ford tells you it's on material hold...that's where my order sits).

abbas...you cancelled your 'pre orders' because a broker you know called all the small town dealers in the midwest and they charging a lot? I don't understand your logic. First, that's a lot of phone calls....I'm guessing he didn't get around to all of them.

 

Second, it sounds as if you're lumping all these dealers together as if they're colluding to auction the cars so buyers will blame each other for high prices. Collusion among small dealers over a large geographic area is functionally impossible. Not to mention underlying demand issues.

 

Third, I don't understand what your pre-orders have to do with phone calls a broker made. Maybe it's just that I don't know what you mean when you say pre-order...I'm assuming that means an agreement you have made to purchase the car....which would mean, typically, an agreement on price. Otherwise it's nothing but being on a list to get called when the car arrives.

 

 

I am saying that I am sick and tired of dealers overcharging people. I realized that I dont want to pay $10k or more for a car that possibly/maybe has some potential that 50 years down the line, the car may go up in value. I dont believe that at this time, there is a single dealer out there that will just sell you this car at MSRP. To the people that say they have ordered them at MSRP, I say goodluck and I hope you get your car.

 

All my pre-orders were placed at MSRP. Then suddenly, as my turn came up to order, the dealers then requested $10-20k cash payment over the MSRP to order the car. So I cancelled all of them. I could understand maybe $10k if I could the car delivered in the next couple of months but it was 10k over to get the car ordered in April 07 for summer delivery of 07.

 

The car broker chased down the major dealerships in the midwest only to come back with same results that I had here in CA. I had to pay $15k over or join their auctions.

 

Abbas

[yamahar1]

I am with you Abbas, I will believe it when I see it as far as people getting the car for MSRP, or even $200 below like that one guys says. He doesn't have his car right? Too many horror stories of people having their deals renigged on by greedy dealers. And the news came out today that they are temporarily closing 10 plants and laying off/firing more people. Can Ford really afford to get any negative vibes going by having their dealers gouging and screwing customers? I think the laws should be changed so Ford can force the dealer to charge the MSRP, or below. It is just like statutory rape how some dealers are bending people over, guess people like it, because they are blowing 15-20k over, to drive off the lot with like $25,000 negative equity to start as a new owner of a fake "Shelby" badged SVT Cobra......Nice economics.

[ratnacage]

I am with you Abbas, I will believe it when I see it as far as people getting the car for MSRP, or even $200 below like that one guys says. He doesn't have his car right? Too many horror stories of people having their deals renigged on by greedy dealers. And the news came out today that they are temporarily closing 10 plants and laying off/firing more people. Can Ford really afford to get any negative vibes going by having their dealers gouging and screwing customers? I think the laws should be changed so Ford can force the dealer to charge the MSRP, or below. It is just like statutory rape how some dealers are bending people over, guess people like it, because they are blowing 15-20k over, to drive off the lot with like $25,000 negative equity to start as a new owner of a fake "Shelby" badged SVT Cobra......Nice economics.

 

 

The only reason dealers are charging so much is because buyers are willing to pay it. Everyone keeps trying to blame the dealers, but what about the buyers that fork out $25k+ over MSRP? Did the dealers drag those buyers into the showroom against their will, hold a gun to their head, and force their hand to sign the papers? Dealer's are such an easy target, but if you want someone to blame, blame the people who are encouraging the mark-up - that would be your fellow GT500 buyers.

 

If dealers were limited to MSRP, then the entire production run would have been sold out from the day the GT500 was announced. As it is, there are plenty of GT500's available because the free market has acted to self-regulate and balance supply and demand. Maybe it's not balanced enough for you personally, but since when does an entire market owe itself to you?

 

Dealers might consider anyone not willing to pay MSRP, for say an Expedition, greedy. You might counter that the market for Expeditions is not at MSRP which is true, however neither is the market at MSRP for the GT500. You can't have it both ways.

[isellford]

I personally have delivered 2 Shelby's to 2 of my good commercial customers at MSRP and I have a 3rd one scheduled for another commercial customer at the same price. I also have 2 deposits for 2 more cars if we get any additional allocation. I had deposits on these cars months before the regular salespersons even knew what a Shelby was and when they found out, they were P.O.'d that we were sold out. Oh Well!

There are MSRP deals out there, you just have to be lucky enough to find them.

[mrfarmdog]

Don't take the the wrong way Isellford but if being lucky means being a commercial customer that spends big bucks at your dealership it does not sound like there is much luck in that. I called 50 dealserships in 5 states before I struck a deal and the best I could do was $10K over. When asked how much they sold the cars for alot of sales managers stated that they were sold to "friends" of the owner or "friends" of the dealership. I would not be surprised if those friends were good commercial customers. It is hard to compete against that with limited supply on hand. Then to add insult to injury you have people involved in that kind of deal bragging about an MSRP deal.

 

And yes I wanted a car and I have found one at a price I am willing to pay. But would I have paid that price if I found one at MSRP? No way. Did I try to find one for less? Absolutely. I expect that MSRP in alot of cases means good commercial customer or friend of the owner.

 

There are some rare occasions where dealers have been fair to the average consumer and to those dealerships I say thank you.

[yamahar1]

Don't take the the wrong way Isellford but if being lucky means being a commercial customer that spends big bucks at your dealership it does not sound like there is much luck in that. I called 50 dealserships in 5 states before I struck a deal and the best I could do was $10K over. When asked how much they sold the cars for alot of sales managers stated that they were sold to "friends" of the owner or "friends" of the dealership. I would not be surprised if those friends were good commercial customers. It is hard to compete against that with limited supply on hand. Then to add insult to injury you have people involved in that kind of deal bragging about an MSRP deal.

 

And yes I wanted a car and I have found one at a price I am willing to pay. But would I have paid that price if I found one at MSRP? No way. Did I try to find one for less? Absolutely. I expect that MSRP in alot of cases means good commercial customer or friend of the owner.

 

There are some rare occasions where dealers have been fair to the average consumer and to those dealerships I say thank you.

 

Right on, that is why I wish they would change the stupid laws and let people buy direct from Ford. Cut out the middle man who is nothing but the trouble man if you ask me. I will do my own financing, I will clean the car myself, I can do my own oil changes, what do I need the dealer for???? I know, so I can pay out the ass, right, and be told lies, and so on,,,,,wait, I know this will be a good reply from some dealer,,,let me get ready :elefant: :tequila:

[Guest evilchris]

I personally have delivered 2 Shelby's to 2 of my good commercial customers at MSRP and I have a 3rd one scheduled for another commercial customer at the same price. I also have 2 deposits for 2 more cars if we get any additional allocation. I had deposits on these cars months before the regular salespersons even knew what a Shelby was and when they found out, they were P.O.'d that we were sold out. Oh Well!

There are MSRP deals out there, you just have to be lucky enough to find them.

 

 

You shouldn't have to be "lucky" to buy a Mustang at sticker.

[JETSOLVER]

For the dealer apologists. It seems to get lost in the hue and cry around this issue that Ford has already built in a dealer profit of 5k on this car. If we were asking for them at invoice, I would have nothing to stand on regarding it, however, how many other Fords sell at a built in no questions asked 12.5% profit TO THE DEALER? Defend ADM anyway you can, it does not change the fact that you are trying to suck out of the customer, what you feel Ford has not delivered to you, the retail dealer, in the near past. I know you happily go home at night and sleep comfortably believing the free market system has worked like clockwork, but the fact remains that your shifted morality is killing your livelihood at both ends. Nice work Romans.

[mrfarmdog]

For the dealer apologists. It seems to get lost in the hue and cry around this issue that Ford has already built in a dealer profit of 5k on this car. If we were asking for them at invoice, I would have nothing to stand on regarding it, however, how many other Fords sell at a built in no questions asked 12.5% profit TO THE DEALER? Defend ADM anyway you can, it does not change the fact that you are trying to suck out of the customer, what you feel Ford has not delivered to you, the retail dealer, in the near past. I know you happily go home at night and sleep comfortably believing the free market system has worked like clockwork, but the fact remains that your shifted morality is killing your livelihood at both ends. Nice work Romans.

 

The free market does work... Just watch as Ford slips in market share. I can't help but think dealer issues are partly to blame and this is just another example. What goes around comes around.

[yamahar1]

The free market does work... Just watch as Ford slips in market share. I can't help but think dealer issues are partly to blame and this is just another example. What goes around comes around.

Right on, they will not be such tough guys when Ford goes bankrupt, no ADM to charge if there are no vehicles. I hate to say I told you so,,,,,,,,greedy bastards

[jrichard]

For the dealer apologists. It seems to get lost in the hue and cry around this issue that Ford has already built in a dealer profit of 5k on this car. If we were asking for them at invoice, I would have nothing to stand on regarding it, however, how many other Fords sell at a built in no questions asked 12.5% profit TO THE DEALER? Defend ADM anyway you can, it does not change the fact that you are trying to suck out of the customer, what you feel Ford has not delivered to you, the retail dealer, in the near past. I know you happily go home at night and sleep comfortably believing the free market system has worked like clockwork, but the fact remains that your shifted morality is killing your livelihood at both ends. Nice work Romans.

 

As a good "dealer apologist," I hear what you're saying:

 

Market good when I get what I want.

 

Market bad when I don't get what I want.

 

Being less facetious, it's interesting to me that so many equate the operation of the free market with morality. Breaking deals, lying, cheating, stealing...those are moral and ethical failings. Maximizing profit...well, that's actually morally good in the long history of failed economic systems. Claiming that morality has "shifted" because this market works like any other market does not mesh with reality.

 

Havng said that, I agree that the whole ADM thing is frustrating...in the same way so many things in life are frustrating. But certainly not in any sort moral or ethical way.

 

Nevertheless, if we complain about a system, particularly on moral or ethical terms, we should also propose an alternate system (...with a good understanding of the consequences of generalizing that system...). The new system must be less "morally" objectionable, which, in our society, historically means 'more efficient' in the context of economic and legal systems.

 

And no one has to be lucky to buy a Mustang at list. All you have to be is patient. But most don't want to pay the price of patience, they'd rather complain about ADM. Interesting because it then becomes obvious that the argument is symmetrical...and by arguing that a dealer 'should' sell you a vehicle for less than he can sell it elsewhere, you're really arguing that he should transfer wealth directly to you. Which makes you greedy in the exact sense that the dealer is greedy for trying to keep that profit to himself. Except that he has the right to the profit. Which is a big exception.

[yamahar1]

As a good "dealer apologist," I hear what you're saying:

 

Market good when I get what I want.

 

Market bad when I don't get what I want.

 

Being less facetious, it's interesting to me that so many equate the operation of the free market with morality. Breaking deals, lying, cheating, stealing...those are moral and ethical failings. Maximizing profit...well, that's actually morally good in the long history of failed economic systems. Claiming that morality has "shifted" because this market works like any other market does not mesh with reality.

 

Havng said that, I agree that the whole ADM thing is frustrating...in the same way so many things in life are frustrating. But certainly not in any sort moral or ethical way.

 

Nevertheless, if we complain about a system, particularly on moral or ethical terms, we should also propose an alternate system (...with a good understanding of the consequences of generalizing that system...). The new system must be less "morally" objectionable, which, in our society, historically means 'more efficient' in the context of economic and legal systems.

 

And no one has to be lucky to buy a Mustang at list. All you have to be is patient. But most don't want to pay the price of patience, they'd rather complain about ADM. Interesting because it then becomes obvious that the argument is symmetrical...and by arguing that a dealer 'should' sell you a vehicle for less than he can sell it elsewhere, you're really arguing that he should transfer wealth directly to you. Which makes you greedy in the exact sense that the dealer is greedy for trying to keep that profit to himself. Except that he has the right to the profit. Which is a big exception.

Market good when I get what I want at the price Ford has set for the vehicle. I am arguing that a dealer should sell the vehicle at the price that the manufacturer has set. Similar to the X-box 360 when it first came out. People waited in lines to buy it at the price microsoft put it at. The only ones charging more for it were comsumers who got one and sold it on E-bay when they sold out. The Playstation 3 will be expensive also, but not marked up. You just have to wait in line, or on a list. So, by that logic even having to wait in line, or on a list, we should still be able to get the car at the price that Ford has set, and not a penny more, because the sign out in front of the dealership says FORD, not E-bay, or Joe Schmoe's cars. I am an independant consumer. If I want to sell my motorcycle for $20,000, and someone is dumb enough to pay that much for it, great. But I don't have a big blue and white yamaha sign on my house, so I am not making that company look bad. This is hurting Ford, and that is what matters, not how much we can overcharge for a fake "Shelby". You guys just don't get the point, don't you see all the negative press on so many blogs? This will hurt everyone involved with Ford, except for Shelby, he won't be around forever, but Ford should be right?

[mrfarmdog]

As a good "dealer apologist," I hear what you're saying:

 

Market good when I get what I want.

 

Market bad when I don't get what I want.

 

Being less facetious, it's interesting to me that so many equate the operation of the free market with morality. Breaking deals, lying, cheating, stealing...those are moral and ethical failings. Maximizing profit...well, that's actually morally good in the long history of failed economic systems. Claiming that morality has "shifted" because this market works like any other market does not mesh with reality.

 

Havng said that, I agree that the whole ADM thing is frustrating...in the same way so many things in life are frustrating. But certainly not in any sort moral or ethical way.

 

Nevertheless, if we complain about a system, particularly on moral or ethical terms, we should also propose an alternate system (...with a good understanding of the consequences of generalizing that system...). The new system must be less "morally" objectionable, which, in our society, historically means 'more efficient' in the context of economic and legal systems.

 

And no one has to be lucky to buy a Mustang at list. All you have to be is patient. But most don't want to pay the price of patience, they'd rather complain about ADM. Interesting because it then becomes obvious that the argument is symmetrical...and by arguing that a dealer 'should' sell you a vehicle for less than he can sell it elsewhere, you're really arguing that he should transfer wealth directly to you. Which makes you greedy in the exact sense that the dealer is greedy for trying to keep that profit to himself. Except that he has the right to the profit. Which is a big exception.

 

 

This is an interesting thread in that I do not disagree with anything you said jrichard, but it is short sighted as it only looks at short term gains by one party - the dealer.

 

Good will in the free market is worth something. Especially when we are talking about customer loyalty. Ford is declining in market share and is faced with making some harsh decisions in order to be viable in the future. I sincerely doubt that Ford Motor Company benefits from any ADM. The dealers do in the form of short term profit but Ford Motor Company does not. So we have three parties at play. One makes the cars, one sells the cars (and is the face of the manufacturer to the public) and last is the purchaser or consumer.

 

Most of the people that want a GT500 are loyal Ford customers. The success of the Mustang has always been make it affordable and fun. If the dealer charges ADM he will still sell the vehicle to one person but could in the process alienate dozens of current and potential customers. So short term revenue goes up for the dealer and long term revenue goes down. So the customer looses because they were misguided by MSRP and ultimately underfunded based on ADM, the dealer looses because of the dozens of loyal customers they pissed off in the process, and Ford looses on both accounts because they lost loyal customers and were paid the same amount for the car by the dealers regardless.

 

So in regards to Profit being good. I agree whole heartedly. Ford Motor Company should be paying attention to this because it is their long term profit that is at risk because it is based on volume. Dealers should be worried about profit as well because if people stop coming in the door they don't sell cars. The customer also worries about profit in terms of value because at the price point most GT500s are going for some customers are turning away and purchasing alternatives.

 

The future of Ford is at risk here. You may say I am being an extremist and I certainly hope so because Ford cars have been a part of my entire adult life. However it does not sound like Ford can take chances alienating customers based on current performance... Thus the "Bold Moves" initiative.

 

(*** breathe ***)

Whew... Normally I stay out of threads like this. Sorry if this offends anyone.

[JETSOLVER]

As a good "dealer apologist," I hear what you're saying:

 

Market good when I get what I want.

 

Market bad when I don't get what I want.

Market Bad Period. Or don''t you think that Fords endless bad press has nothing to do with lack of customers?

Being less facetious, it's interesting to me that so many equate the operation of the free market with morality. Breaking deals, lying, cheating, stealing...those are moral and ethical failings. Maximizing profit...well, that's actually morally good in the long history of failed economic systems. Claiming that morality has "shifted" because this market works like any other market does not mesh with reality.

So the constant stories of people being told that thier car has been rescinded out from under them and resold to a more worthy customer(your definition would be more $, mine is of course somewhat different) is a market working like any other, and free of moral ambiguity? Thank you for proving my point.

Havng said that, I agree that the whole ADM thing is frustrating...in the same way so many things in life are frustrating. But certainly not in any sort moral or ethical way.

 

Nevertheless, if we complain about a system, particularly on moral or ethical terms, we should also propose an alternate system (...with a good understanding of the consequences of generalizing that system...). The new system must be less "morally" objectionable, which, in our society, historically means 'more efficient' in the context of economic and legal systems.

One of manyThats a link

And no one has to be lucky to buy a Mustang at list. All you have to be is patient. But most don't want to pay the price of patience, they'd rather complain about ADM. Interesting because it then becomes obvious that the argument is symmetrical...and by arguing that a dealer 'should' sell you a vehicle for less than he can sell it elsewhere, you're really arguing that he should transfer wealth directly to you. Which makes you greedy in the exact sense that the dealer is greedy for trying to keep that profit to himself. Except that he has the right to the profit. Which is a big exception. Are you suggesting that one also has the right to loss of revenue/customers if said dealers identifiable sales practices are plastered all over the internet and perhaps even other sources? With the same recourse as those former customers? Because here we are. Loud and about to get louder. And as to the price of patience, are you suggesting that the symmetrical argument is an arbitrary dealer markup? Or are said dealers just lucky that they have this product at this point in time? Of which the obverse is of course that any downturn in sales is just unlucky.And this I'll leave to another day. "Maximizing profit...well, that's actually morally good in the long history of failed economic systems."

 

[yamahar1]

A little hard to follow with all the different color fonts jetsilver guy, but spot on correct. For the dealers trying to justify the raping, flame on, this is like the wolf pit, and it is also the place for you a holes to realize how many in the public feel about you snakes (in a car dealership) not on the plane!

[jrichard]

Ugh.

 

Lying, cheating, stealing are bad things. That includes breaking deals. But so many want to lump that in with ADM. It ain't the same, folks. Nevertheless, jetsolver says that I made his point by pointing this out. Hmm. There is no serioius economic theory or reality that says lying, cheating, stealing are part of a free market system. None. And, in fact, enforceable property rights, including contract law, are the foundation of our current system of free markets. That is why the US has a successful economy and so many third world countries moving toward free markets have difficulty.

 

So, when I speak of free market operations, my point is clearly that those behaviors are not part of it. Those are separate issues...but they seem to be part of your definition of free market, so that makes free market operations bad. Period. And I agree...if a "free market" is a lawless market, then it is bad. My point has been missed.

 

On the same topic, I'm fearful my deal will go sideways because my dealer might get truly greedy and go back on his agreement with me (...that is greedy...asking ADM is not). That makes him bad for breaking a deal. It doesn't make dealers bad for asking ADM. This appears to be a fine distinction to some and I don't understand why.

 

And I agree that the bad press for Ford is a bad thing. But, Ford cannot enforce price controls because it impedes competition. That's why it's illegal in the US for Ford to do this. But, if you're only looking at the GT500 issue, you'll conclude that price fixing by Ford is good. It isn't good in the long run. Talk about only looking at the short run. Related to that, the damage caused to Ford is a complex issue because of constraints put in place with respect to price fixing.

 

I had trouble following the last part of Jetsolver's post...but the bottom line: if ADM is bad for business then the dealers will be "punished" in lost sales. Yeehaw. That's the free market at work. And you should feel free to withhold your business. The last thing we want for the long run is price collusion or price fixing.

[Guest evilchris]

How does Mercedes do it then? Try to find an AMG for over MSRP other than the McLaren...

[jrichard]

I don't have any idea what the market is like for Mercedes and AMG vehicles. If you do not find ADM on these products, my guess is that there is not enough on-going demand to maintain ADM. Given that car dealers have very little pricing power over any extended period of time, this isn't a bad guess. And, in fact, lack of pricing power is why ADM will become a non-issue on the GT500 quicker than most people think.

 

Another issue is that, generally, manufacturers can enforce a minimum advertised price policy. It could be that is what Mercedes is doing. I don't know the rules with respect to minimum advertised pricing as it relates to the auto industry.

 

But, if you think Mercedes is enforcing a minimum or maximum selling price policy, then it is doing so illegally.

 

Though I'm familiar with resale price maintenance and its history, it is not my area of expertise. As an aside, MSRP is, historically, a way to maintain artificially high prices. So interesting that, due to the ebb and flow of the free market system, it is used by some to argue for artificially low prices.

 

Here is an interesting link that give the relevant facts in a very brief format:

 

http://en.wikipedia.org/wiki/Resale_price_maintenance

 

Another interesting but less relevant link that even mentions automobile MSRP:

 

http://en.wikipedia.org/wiki/Suggested_retail_price

 

It seems to me the disagreements on this board over ADM center around the confusion of ADM with unethical or illegal business practices (including fraud, misrepresentation, breach of contract, etc.). Except for an emotional reaction, I can't see why ADM is lumped with illegal or unethical behavior. But clearly, as jetsolver demonstrated in his reply to my prior post, it does get lumped.

[dsabldvt]

I used one dealer(sales manager) exclusively for almost 20 years in my construction business. I always had my vehicles serviced at which ever dealer ship he was at(I think he was at 3 different dealers). He always gave me good deals on my trucks and cars and we were pretty good friends. I almost bought a GT from him but after selling the first one for MSRP his owner said no more losing out of the extra profit that is out there for the taking. So when I seriously talked to him about a GT500, I knew the price would be higher. When I talked to him, he already had 3 on his list with deposits and that was all he was getting in. He still had not priced them. By the time he priced them at $30,000 over MSRP, I had found someone to do it for $19,500 over. He said he would match it and I would be 1st on the list. I gave hime a deposit and was happy to be on a list. I the started calling around and found another dealer who would sell me one for $12,500 over. My friend would not matc it and gave me my deposit back. Luckly, neither one had made the deposit non-refundable. I the called over 40 other dealers and found one for $200 MSRP. Got it in writing and signed. Hopefully it won't turn around and bite me. It has been 3 months and everything is fine. It is on material hold last time I checked. My point in all of this is that the dealer where my friend works will never get any of my business in the future. I think he has also pissed off at least 3 other clients so he has definetly hurt his bottom line. He will now have to put them on e-bay or lower his price to sell them. I really hope this hurts the dealership because the guy who runs it now is the son of the founder(a really great old gentleman) and all he cares about is how much can he make.

[mrfarmdog]

I don't have any idea what the market is like for Mercedes and AMG vehicles. If you do not find ADM on these products, my guess is that there is not enough on-going demand to maintain ADM. Given that car dealers have very little pricing power over any extended period of time, this isn't a bad guess. And, in fact, lack of pricing power is why ADM will become a non-issue on the GT500 quicker than most people think.

 

Another issue is that, generally, manufacturers can enforce a minimum advertised price policy. It could be that is what Mercedes is doing. I don't know the rules with respect to minimum advertised pricing as it relates to the auto industry.

 

But, if you think Mercedes is enforcing a minimum or maximum selling price policy, then it is doing so illegally.

 

Though I'm familiar with resale price maintenance and its history, it is not my area of expertise. As an aside, MSRP is, historically, a way to maintain artificially high prices. So interesting that, due to the ebb and flow of the free market system, it is used by some to argue for artificially low prices.

 

Here is an interesting link that give the relevant facts in a very brief format:

 

http://en.wikipedia.org/wiki/Resale_price_maintenance

 

Another interesting but less relevant link that even mentions automobile MSRP:

 

http://en.wikipedia.org/wiki/Suggested_retail_price

 

It seems to me the disagreements on this board over ADM center around the confusion of ADM with unethical or illegal business practices (including fraud, misrepresentation, breach of contract, etc.). Except for an emotional reaction, I can't see why ADM is lumped with illegal or unethical behavior. But clearly, as jetsolver demonstrated in his reply to my prior post, it does get lumped.

 

 

So jrichard once again interesting dialog. The issues, I suppose are relegated to the dealers and will be sorted out there by the free market. Dealers that have high ADMs and screw their customers over will most likely be the ones to go out of business. The ones with good service and fair business practices will thrive and grow. There will definately be some trimming of the dealers in the near future. I wish it was based on complaints and not on share of local market. I know several I would like to see evaporate.

[jrichard]

I used one dealer(sales manager) exclusively for almost 20 years in my construction business. I always had my vehicles serviced at which ever dealer ship he was at(I think he was at 3 different dealers). He always gave me good deals on my trucks and cars and we were pretty good friends. I almost bought a GT from him but after selling the first one for MSRP his owner said no more losing out of the extra profit that is out there for the taking. So when I seriously talked to him about a GT500, I knew the price would be higher. When I talked to him, he already had 3 on his list with deposits and that was all he was getting in. He still had not priced them. By the time he priced them at $30,000 over MSRP, I had found someone to do it for $19,500 over. He said he would match it and I would be 1st on the list. I gave hime a deposit and was happy to be on a list. I the started calling around and found another dealer who would sell me one for $12,500 over. My friend would not matc it and gave me my deposit back. Luckly, neither one had made the deposit non-refundable. I the called over 40 other dealers and found one for $200 MSRP. Got it in writing and signed. Hopefully it won't turn around and bite me. It has been 3 months and everything is fine. It is on material hold last time I checked. My point in all of this is that the dealer where my friend works will never get any of my business in the future. I think he has also pissed off at least 3 other clients so he has definetly hurt his bottom line. He will now have to put them on e-bay or lower his price to sell them. I really hope this hurts the dealership because the guy who runs it now is the son of the founder(a really great old gentleman) and all he cares about is how much can he make.

 

 

That's a great story. And it shows there are consequences to dealers for their behavior. If they upset loyal customers, they will likely lose sales. And those customers will tell friends. So a dealer has to weigh the extra income now versus lost futures sales. And that's his business. Thank goodness.

 

I'd hate to have the government telling him how to price his product. That's never worked out welll...and there's been a lot of "experimentation" that proves that point. And I'd hate to have Ford telling him...though that would benefit early-buyers of high-demand vehicles, it would hurt the vast majority who purchase run-of-the-mill vehicles because there would no longer be price-competition among dealers.

 

So jrichard once again interesting dialog. The issues, I suppose are relegated to the dealers and will be sorted out there by the free market. Dealers that have high ADMs and screw their customers over will most likely be the ones to go out of business. The ones with good service and fair business practices will thrive and grow. There will definately be some trimming of the dealers in the near future. I wish it was based on complaints and not on share of local market. I know several I would like to see evaporate.

 

 

Yeah, unfortunately it's a slow process. I wish the crap dealers would get hammered more quickly. Part of the reason the process is slow is that many consumers care less about service and customer care than they do about getting the best price. So, a dealer can screw a few and still get business if he is competitive on pricing. It's unfortunate, but it is one of the consequences of the "information" age...where we all know the dealer's cost and what others are paying. Then we focus on that metric instead of on other metrics.

 

If I find a great dealer, I will buy repeatedly from that dealer even if I know the cost is higher. But that's only happened to me once. I find most dealers mediocre, so I typically shop for the best deal. And I also find the sales side is no reflection on the service side. That one dealer I found...well, I had my vehicles serviced at a different dealership because their service shop was awful.

[JETSOLVER]

I should just let this go, but... The frustration comes from the fact that the market is not free. Ford has repeatedly stated the numbers of from 8-10000 cars this year. The only place the customer can go buy a car is the dealer. Now we are talking about situation where the market supply is no longer Ford but the dealer body. The issue many of us have is when the dealers take pricing cues from other than the local market into which they sell. Now we are starting to see that the dealers are the supplier and the customer has no alternative but to either deal with that limited dealer pool or go without. The dealer that sets his price in relation to a dealer in another part of the country because he can, with little or no weight given to the local market, is at that point artificially setting the market. Again a limited supply and no chance at open market competition. Can you think of a term that might apply to that situation? I think many of us believe that the dealer in our local area is no longer pricing his stock based on his determination of value, but on some other dealers valuation of it. At this point the competition of a free market is no longer an option is it? If the dealers were at the same starting point this would not be the case. But they are not all starting from MSRP are they? And if they are artificially determining the minimum value when the initial price to them, as the supplier, is fixed (their invoice from Ford), they are awfully close to collusion. Which is generally defined as cooperation among firms to raise price and otherwise increase their profits. And even if not overtly (secret phone calls) it is certainly tacit. And collusion is generally considered immoral and illegal. To quote from an earlier post, "Except for an emotional reaction, I can't see why ADM is lumped with illegal or unethical behaviour." Perhaps some can't but I can. And all this is set aside from the issues of specific legal and moral trespass (lying, broken contracts), which just goes to further the reasons some of us are so frustrated as to consider giving up our dream car, or even to leaving the blue oval entirely. And that should concern the corporation whose logo is on the dealership and all over the car.

[abbas]

First, I do think it is Ford's fault. Ford should have more control over the dealerships. If the dealerships are charging over MSRP, then they should not allocate more cars to them.

 

Second, if you have promised your customers the car for MSRP, you have to sell to them at MSRP. I feel like I wasted a year of my life pursuing a car that I was promised only to have the greedy dealer turn around and tell me on the day of the order that there is a $15k CASH overcharge. Had I known this a year ago, I would have bought another car.

[dsabldvt]

I totally agree about Ford having a say with their dealers. Other businesses can dictate price to their vendors or they will take away the product or franchise. When and if I get my car, I will be contacting Ford with my story. I will also take my car (if I do get it at $200 under MSRP like Promised) by the dealership where my friend works and show him my paperwork. Hopefully the owner(the old man-original owner) will be there. If he is I will show him how his son lost my business and another dealer has it for being honest and not a greedy SOB like his son.

[yamahar1]

I should just let this go, but... The frustration comes from the fact that the market is not free. Ford has repeatedly stated the numbers of from 8-10000 cars this year. The only place the customer can go buy a car is the dealer. Now we are talking about situation where the market supply is no longer Ford but the dealer body. The issue many of us have is when the dealers take pricing cues from other than the local market into which they sell. Now we are starting to see that the dealers are the supplier and the customer has no alternative but to either deal with that limited dealer pool or go without. The dealer that sets his price in relation to a dealer in another part of the country because he can, with little or no weight given to the local market, is at that point artificially setting the market. Again a limited supply and no chance at open market competition. Can you think of a term that might apply to that situation? I think many of us believe that the dealer in our local area is no longer pricing his stock based on his determination of value, but on some other dealers valuation of it. At this point the competition of a free market is no longer an option is it? If the dealers were at the same starting point this would not be the case. But they are not all starting from MSRP are they? And if they are artificially determining the minimum value when the initial price to them, as the supplier, is fixed (their invoice from Ford), they are awfully close to collusion. Which is generally defined as cooperation among firms to raise price and otherwise increase their profits. And even if not overtly (secret phone calls) it is certainly tacit. And collusion is generally considered immoral and illegal. To quote from an earlier post, "Except for an emotional reaction, I can't see why ADM is lumped with illegal or unethical behaviour." Perhaps some can't but I can. And all this is set aside from the issues of specific legal and moral trespass (lying, broken contracts), which just goes to further the reasons some of us are so frustrated as to consider giving up our dream car, or even to leaving the blue oval entirely. And that should concern the corporation whose logo is on the dealership and all over the car.

 

Amen brother, I wish those scumbag dealers would read that. They just don't get it.

 

 

 

I'd hate to have the government telling him how to price his product. That's never worked out welll...and there's been a lot of "experimentation" that proves that point. And I'd hate to have Ford telling him...though that would benefit early-buyers of high-demand vehicles, it would hurt the vast majority who purchase run-of-the-mill vehicles because there would no longer be price-competition among dealers.

 

 

Where is the price competition among dealers going on at? E-bay? I thought you either bought the car at A/X plan prices, or paid MSRP, or just got some rebate from Ford. Since when are dealers going after each other in price? I live in Michigan, there are a lot of Ford dealers here, I don't see them going after each other on new cars, maybe used, but that is a different case. The deals on TV that they claim either have a catch to them, or are just an advertisement of some rebate or financing deal that Ford is offering. I still don't buy people defending the gouging ADM's.

[mrfarmdog]

I don't think anyone has talked about Government price controls so I am not sure where that came up. I would just prefer that the sticker price be THE price and you have to wait in line for your car. Also make sure that people don't get bumped out of line because of shady dealer dealings.