TexasVert

Horseowner: There is a fundamental difference here with Mustangs vs rare coins or the other comparisons you have made. The situation with the '05 Mustang is not a real supply/demand situation. It is only a very temporary production problem for Ford. Most of your comparisons describe things that will retain the value they would demand in todays market as a "rare" item. The 05' Mustang is destined to be just as much of a comdity as the '04 and older Mustangs. Any money paid to the opportunistic dealer today for the privledge of having one NOW will be lost money. The dealer is not reacting to true market based supply/demand. They are simply exploiting a short term production miscalculation on Ford's part. And yes I think a lot of people begrudge them that money just like many would begruge a ticket scalper or someone selling the hot christmas toy in the classifieds for a 500% markup..........

This is pure exploitation and not good business......

dapmustang

I’ve read the issues on both sides. Unless I’ve not seen where this has been addressed, many are missing an important point.

If Ford has designed the Mustang with features and materials where it could be sold for, lets say, $27,000 and a normal, reasonable profit made by the dealerships, then Ford has been limited to keep costs within a certain boundary to meet that $27,000 price point.

To me, it is not the issue that a dealer may be getting $6000 more over MSRP; the point is that there is not $6000 worth of increased value in the car itself.

If I want to pay $33,000 for a Mustang, then I want Ford to put more features and materials in their cost that actually go INTO the vehicle. Maybe a better interior, IRS, or any of the other (few) shortcomings that some reviews mention.

If there’s $x worth of cost in a Mustang to MSRP for $27,000 - it isn’t worth $33,000. I’m talking strictly worth of the car based on costs to manufacturer, not the present market selling conditions.

If the dealers can charge $6000 over MSRP, then at least admit this is a selling frenzy and the car is not worth a penny more. In 2010, when the 2005s are five years old, they will not be worth $6000 more than a 2006 or 2007 or whenever this production shortage finally works its way out.

And don’t give me how dealers have millions of dollars invented in dealerships and inventories. I don’t discount that, but that has already been put in place to sell ALL the dealers line. Show me a “Bob’s 2005 Mustang GT Only” dealership who has started business just to provide 2005 Mustang GTs and I’ll pay more to him.

Don’t get me wrong. If a dealer can make $$$ over MSRP and a buyer will pay it, it’s freedom of choice. But Ford made the Mustang a hit, not the dealers. And if Ford blew it and made a dog, we wouldn’t be having this discussion.

Dave

moc1976

I loved the post talking about all the money the dealers had to invest in their assests. I don't know about anybody else, but I don't see too many car dealers going out of business, so they are doing just fine charging MSRP or slightly below. I saw earlier that at MSRP, the dealer makes about 13% profit on a GT, I think. That's pretty good compared to some businesses.

And I agree with Dave and Mike, as I've said before, if someone is willing to pay over MSRP, more power to them and to the dealer, but the practice is not good for Ford's name. That's the point the people are missing about all of this.

Mark05GTCon

To say this is not "true" supply and demand, but rather "something else"... is completely out there. It doesn't get any more "supply and demand" than the simple phenomenon we are seeing with the '05 Mustang.

Indeed, one day you will be able to buy a depreciated '05 Mustang for a price that won't be entirely influenced by today's market. But that doesn't make this any less of a supply and demand issue today. And if you think the lots are going to be flooded with '06 models with rebates and incentives, you haven't been paying attention... MY06 is in effect sold out at some dealers already, if the internet is to be believed. Besides, I still believe that the '06 is going to be priced higher - to the point where some people will be saying "I told you so - I was patient and I got $1500 off MSRP".... and they'll still have paid more than today's MSRP customer... and missed a summer of driving the car.

I would just ask you to imagine that you were a car dealer in Anywhere USA and you had two GTs on your lot. How big a hurry would you be in to sell them at $100 over invoice? I mean seriously....come on.

Why not? Because the demand-supply tension supports a premium over MSRP.

Whether you believe this will honestly cost you future business via internet word of mouth or repeat business... that's your call. I think that's all BS - and I know darn well that most likely when you're ready to buy an Explorer, you're going to be right back at my lot with your Edmunds printout in hand... and we'll do a deal near invoice on that one. You ARE NOT likely to withhold your business from me or do me any material harm because I charged over MSRP back in 2005 when the new Mustang was out.

And it's not sour grapes from someone who paid a markup... I paid MSRP and I haven't envied anyone elses car on the road since the day I did.... I would do it again.

WarningSLO

Curriculum publisher? I hope you're not like the rest of the textbook publishers out there who are totally screwing college students these days with your "new editions" that come out every year. I didn't realize Newton's Laws had been re-written so recently that I needed a new physics book.

Back to topic... we should be upset with the consumers who pay the mark-ups, otherwise the dealers will keep it up. Fortunately, production will catch-up and this car wont be so "rare" anymore.

ISELLFORD

To dealers charging way over MSRP, more power to them. Remember though that customers have very long memories.
I had ordered 3 GT coupes and 1 GT vert for customers back at the beginning of the model year for $700 over invoice for the coupes and $1200 over invoice for the vert. We had no idea at the time of what the market was going to be. By the time these units got schedued, the GT's were selling for MSRP but i stuck to the original deal with these customers because my word is my bond and in 24 years I have always done what I said I would. The day we delivered the 2nd GT, that same custome told us how much he appreciated the deal and how he had heard hrror stories from friends [we are in a small metro market 150 miles west of Chicago and he drove downb from the Chicago area as a referral]. He ordered an '06 super duty diesel on the spot and we will be delivering it next month.
If you take care of customers, no matter what business you are in, you will reap the rewards 10 fold.

Enfynet

If dealers never offered discounts or incentives, people wouldn't expect them and wouldn't complain when they didn't get them.

Imatk

It's certainly supply and demand to a certain point. Just not the way it was earlier described with "hospitals" etc.

A car is a car... not an essential item to ones health. Someone needing a heart transplant isn't going to shop around for one if they are going to die in the next day or so if they don't get one. They are going to pay whatever they have to to get the operation.

A car isn't something that an indivual can't live without. Even IF it's a Mustang

Supply-side economics is very simple in the regard... when the price goes waaaay up (6k markup) then the demand WILL go down.

Don't fool yourself into thinking that people will not look elsewhere for a car when you're trying to bend them over... they will... some won't, but just like PT Barnum said ... "There's one born every minute."

KansasCityTim

No offense, but you are delusional if you think someone will take a rear-raping from you, pay $5000 over MSRP, find themselves massively out of equity, and then return to you for more business and/or tell others to deal with you.

Ichi

Take a look at Fords current market share. Speaks volumes. Continued capitalization of consumers "irrational exuberance" among other foibles will bring the downfall of not only Ford but American corporations as a whole. Right is right and wrong is wrong. The so-called market be damned!

Mark05GTCon

Well I'll give you this point - I hand out the business card of the dealer who sold my Mustang to me at MSRP (Harrold Ford), and I left their paper plates on the car out of appreciation.

I wouldn't have done that for Future Ford or Suburban Ford - the two local markup bandits here in Sacramento. I've even said nice things about Harrold, and mean things about Future and Suburban on the internet on a couple forums.

But MY rebuttal is - I don't believe that Future Ford or Suburban Ford are significantly "hurt" by the fact that I'm slamming them in this post... and they know it... and the imagined negative consequence of extracting top dollar for '05 Mustangs is, imho, overblown.

TexasVert

Mark05GTCon: You are right that your local Ford Dealer is probably not concerned about your one negative opinion.

However, in many things one persons actions are insignificant when taken alone but are very decisive when taken collectively. If we all merely decided what to do based on the effect of our own actions alone then no one would ever vote. The fact that so few are paying the massive markups over MSRP is why it is so hotly debated. If we all just resigned and paid whatever was asked it would be a moot point.

As for the supply/demand point, when I said it was not really a supply/demand situation I meant in a classic economics sense. A true supply/demand model would be driven by the source of the product from a fundamental scarcity of the inputs of production or a significant increase in their basic cost. This is simply a temporary glitch in the production line where Ford simply did not plan well enough to handle the demand or they are so convinced that the demand will be much lower soon that they are unwilling to make the investiment to deal with the initial high demand.

The price gouging is being driven by a lack of supply to be sure and this happens often with many products. But when the grocery store increases the price of tomatoes due to crop failure, I don't feel ripped off. But when some opportunist is exploiting a temporary condition for extreme profit then I find it disgusting.

Mark05GTCon

TexasVert: Fair enough, but CAFE rules are a bonafide restraint on production of V8s as a percentage of total production. IUP parts availability is a bonafide restraint on production. I think there are parts issues with the motor but I don't know for sure. And overtime at the factory and increased steel costs are real increases in base cost.

There might be some elements of "bad planning" on Ford's part... but I think CAFE rules, IUP parts availability, and other things like this are just a real as a bad rainfall season ruining a tomato crop.

I actually think the price of oil is more bogusly manipulated than the price of the '05 Mustang. And your gas station will charge whatever amount you'll pay! Now that's buttrape/exploitation - $2.50 gas.

OBleedingMe

You, Horseowner, are a blatant L I A R. I suppose I can't expect anymore from a car dealership sales manager, though. Perhaps you should think before you post.

You say you're not in the car business??? Well, what you posted on March 25th, 2005, begs to differ, sir:

So it appears, Horseowner, that not only were you in the business of selling cars, but you were a sales manager - and a terribly DISHONEST one at that. This trait seems to carry over in your posting on this forum. Geez... what a shock.

Here's the link to the thread (a thread I started about dealerships who abuse new cars, no less) I took the quote from: http://forums.bradbarnett.net/index....opic=19720&hl=

Sorry if I sound really mad... but... well, this sort of stuff really tees me off! I guess this explains why you've been defending ridiculous dealer markups so virgorously - they've probably lined your pockets for years!

Arioch

OBleedingme, you need to read your own post. Horseowner said that he was a sales manager at Ford a long time ago, and he said that he is not currently in the business. These two statements do not contradict each other.

trublustang03

The last sentence in your post is exactly what I am going at, why risk future business with a repeat customer that could bring in more sales/money down your way just so you could charge one person an extra $4,000 on top of MSRP.

I can guarantee you that ISELLFORD just gained himself some repeat business and future referrals just for being honest. When I bought my 03 Vert, I brought my salesman 4 more sales in a period of 2 years that I have owned the car, based on the fact that the salesman treated me good and gave me a good deal on my car.

I don't see it, how someone could justify charging that much, and while it is a free country and people can do what they want with their money, There is a difference between charging extra to someone looking to buy and exotic like the Ford GT and someone who is looking to buy a mass produced car like the Mustang. It might be hard to find now, but I guess as they say, there is a stinker born every minute :bang:

bob

and that would have been the nail in the coffin that would have sent the mustang the way of the dodo and the f-body.

IMO the mustang at 25k represents a solid value and is priced right. Had Ford priced the mustang at 30 to 32k with its current level of content then the IRS ***** would have been well justified in their argument as the Mac Strut/Stick axle chassis would have been a ripoff.