greg palmer

I was told by a local dealer they would sell me a fully loaded Shelby coupe for $47,000 + $15,000 dealer mark up. I fully understand why someone who could afford to would pay $62,000+. I would pay $47,000 + $3-$5,000 not one penny more mark up Right now. Am I crazy?

Hollywood_North GT

Let me try to answer that for you.

Yes.

Please understand that when Ford sets MSRPs, they calculate that using a complex series of forumulas that deduce the actual value of the car based upon manufacturing costs (unit contribution margin, etc.), marketing, shipping, etc, etc. The price they arrive at is a pretty fair representation of what the car is worth if you add up all the constituent bits and pieces that went into it. That price also represents the baseline upon which the car's used value will later be calculated.

Now, market value, that's a different story. If you have too many buyers and not enough stock for a car that is in high demand, you will see dealers jacking up prices to make a quick buck (never mind if it makes both them and the company look bad over the long haul). But why would you buy a vehicle based upon an artificially pumped up price calculated on short-term financial gratification for the dealer, and predicated on emotional longing on the part of the buyer? That's bad economics.

You should pay what the car is worth, according to Ford corporate. This car is not yet a collectible (may never be), and will be available for MSRP in another year or so once people who cannot control their emotional impulses have forked over too much money.

I wonder how much a dealer will give a Shelby buyer who paid $65K for a GT500 today in another 24 months, cause I can almost guarantee you the trade-in WON'T be calculated on the amount plus ADM, it will be calculated upon the MSRP. And that should tell you what even the dealers REALLY think it's worth, even if there are suckers out there who don't "get it."

Sorry to be blunt. I hope that helps to answer your question.

Legion681

I gotta agree at 100 % with BC_Shelby on this, well said !

greg palmer

O.K. I've come back down to earth. But, If I were looking for a home in a hot real estate market, and it's market value was 10% over a home on the other side of town. I would be smart to buy it. Location, Location ,Location. Even thought I'm over paying, it should hold its value. I'm guessing the Shelby has a good possibility of being a collector some day and it too also should hold its value. (if I don't drive it)
I'm not trying to argue with you, I guess I'm just justify the price.
Also, the truth be known, I've already ordered a 2007 GT/CS coupe for $1,700 under MSRP. Maybe out of fairness to the Dealer I should have paid MSRP. using your logic.

jarradasay

In economics you learn that Real Estate is a good investment, it rarely depreciates. As time passes less and less real estate becomes available. Think of Tokyo Japan. 1 sq ft sells for millions of dollars. Land does not rust.
Automobiles in General are not investments they are expenses. You do not ever know what the automobile will be worth. It is guaranteed that in the short term most Automobiles will depreciate quite rapidly. Also, there is a much less likelyhood of these pulling what the 60's era cars are pulling now. Ford is saying 5-8000 units per year making them far less rare then the 1967 that only had 2000 produce or the 1968 that had 1000 (including 500 KRs) produced.
However, no one knows what the market may or may not do. The GT500 may become an ultra collectable in 30 years, but you have to ask yourself...are you going to have this car in 30 years.
If you are looking to invest...try platinum $52K will buy you an awful lot and it 30 years you'll make out like a bandit!!!

Tony Alonso

That is the big unknown at this point, although my opinion is that all of the special Mustangs that have come out in the last 12 years, this one has the highest likelihood of being collectible.

If it is worth that extra money for you to get and drive one sooner rather than later, that ultimately is all that matters to justify a purchase.

When I bought my '03 Mach 1 back in 2002, I paid the MSRP because I wanted one BAD! Also, based on the information we had at the time, I thought the opportunity to get one would be very limited (projected 6500 for 1 model year). That was dramatically changed when production was announced to go up for 2003 and extend to 2004. On top of that, Ford put $3000 incentives to move the cars. So, from a purely financial point of view, I lost value on that deal. The forces in play then were different that now with the GT500. The new Mustang was coming, it was the last hurrah for the SN-95 Mustang, and there was enough supply to meet demand because the marketing was limited on the Mach.

This time, I think we will see very few deals for under MSRP, many at MSRP, and some way over and above within the next 12-14 months. The Shelby name carries a lot of weight with the target customer, who is older and has extra discretionary cash. I think many of the target customers will most likely keep them stored because they perceive they are collectible (last GT500 to ever be made). That will increase the likelihood you would see value go up in the future.

KGSGT350

IMO, These cars will NEVER be collectible. They are producing way too many. If you want collectible, buy a 200 R-Model. At 300 units, it has the best chance of an increase in value, and still you will have to wait years for that.

If that is a reason to buy one, you will be in for a rude awakening.

2007GT500

As ever, I'll take the counter argument (...kind of...). A couple of thoughts:

1. It doesn't matter if the car ever becomes collectable...it is still a horrendous investment. Just do the math. Speculate that the car will be worth $250,000 in 30 years. Pretty good. Now think about an alternative investment: invest $50,000 today at 7% (a conservative number for stock market returns moving forward) and add $1,000 to that every year for 30 years (and incresase that amount at 3%/year...this represents your registration/insurance/maintenance expense). After 30 years, you'll have $519,311. (Paying cash or financing doesn't change the calculation materially.) So, even if the car becomes a collector, it will have cost you close to a quarter million dollars over 30 years. Might want to ask your wife about that.

2. Ford's calculation of MSRP is not a reliable indiction of the value of the car...today or tomorrow. Contrary to BC_Shelby's assertion (and no offense intended), Ford does not "deduce the actual value of the car" based on manufacturing cost, marketing, shipping, etc. Generally, its calculatioin of MSRP reflects what its managers think is close to the "market clearing" price....because that is the actual value of the car. It's worth what folks will pay for it. These days, the reality is that invoice is closer to what the auto manufacturers think will clear the market.

For many reasons, it is difficult for a manufacturer such as Ford to price very high at the start (e.g. $65k for the GT500) and then work its way down over time. So, it starts with a price a bit above the price that will sell all units it intends to manufacturer. Units with high initial demand benefit the dealers via ADM. And Ford isn't perfect...sometimes it guesses wrong. I think it guessed wrong with the GT500 and its response has been to increase production (as opposed to increasing price).

Ford does use manufacturing cost, et cetera, to determine whether to produce a car (...and, once in production, whether to keep producing). In the absence of resource constraints, Ford will produce a vehicle so long as marginal revenue exceeds marginal cost. In the presence of resource contraints, Ford will further filter to produce the products that provide highest return on equity. Both of these calculations end up being very difficult for cars that are intended to generate sales of other vehicles.

So, you're NOT CRAZY to pay ADM. Paying ADM is not paying an 'artificially pumped up price'...it's simply paying what the car is worth at the time. And, remember, its worth will change dramatically over time. So, don't pay what the car is worth according to Ford corporate...that doesn't make any sort of logical sense. Instead, assess the market yourself and pay what its worth to you. If you want it now, step up and pay the market value. If you can wait a year, then you'll pay a lower price. Either way, it's a lousy "investment" and you're flushing money down the drain. But, while you're flushing money down the drain, part of your calculation might be that driving the car an extra year is worth an extra $5k or $10k.

And, by the way, your trade in value is NEVER based on what you paid for the car...ADM or no ADM. It certainly isn't based on MSRP. And not on invoice. It is based on the market value of the trade-in and the dealer's assessment of your best alternative to trading in. Using the 'trade-in' argument is odd...future trade in value offered by a dealer is absolutely non-representative of what a dealer thinks the car is worth today.

And before I get bashed on...yes, I'm buying a GT500...and, no, I will not pay ADM. I'm paying what it is worth to me. If I'd not found my deal, I'd be waiting because the price is coming down. And quickly.

drmustang

There were guys who paid 60 grand for the 2001 C5 Z06s which now sell for mid 20s.Some anxious people paid 40 grand for the 1st 2004 GTOs which can now be had in the teens. The early 2002 Tbirds went for 50K and currently fetch low to mid 20s. Forget about a car being an investment. Ignore the nonsense on internet sites about these GT500s being rare or worth a premium. The value of these cars will depreciate for decades.

A financially sensible person would never consider paying an adm for any car. Paying the sticker price guarantees you excessive depreciation and is never a good idea. Buy the car when the discounts are applied.
Do yourself and your wallet a huge favor and wait this out for one year. Your patience will be rewarded for sure.

Hollywood_North GT

No offense intended, but some of the aforementioned statements are actually flawed. For example, trade in (blue book/black book, etc) is definitely calculated upon the original manufacturers' selling price of the car - it forms the baseline from which used value is calculated backwards and THEN factors in market conditions. You make it sound as if they are pulling these "market value" numbers out of their *****.

Also, the actual production costs of the car most definitely DO form the core equation in determining the MSRP of the car. Certainly, an additional hike is added to that based upon market conditions, but it is far more accurately and reasonably calculated than the "guessing game" ADMs that dealers add to that later.

codeman94

It would be intresting to know if you traded in a Shelby a few years down the road at the same dealership you bought it at for $60,000, how they would treat you on trade in value......especially since they KNOW that you bought it from them...

drmustang

Paying 60 grand for an 07 GT500 and trading in three years will be absolutely hideous from a financial perspective as your trade in value will be in the 20s.

In three years the GT500 will be just another special edition Mustang that some people paid waaaaaay too much for and got their face kicked in.

greg palmer

BC_Shelby, Are you telling us your paying sticker or less for your Shelby?
I so, Good you you. I wish it were that easy. I don't know anyone in the industry, just dealers telling me the only way toget one is $15,000 to $20,00 over invoice. Having connections-
(a Dealer) Is that part of it? If you could explain how your doing it I think those who could afford it would follow your lead. Thanks buddy!!!
I still think the car will hold its value well.
Other wise you wouldn't be buying one.

JST4FN

While I'm not going to jump in on the price part of it, I will say the one car that was built recently that gets overlooked as a collector car is the Bullit. Low numbers were made and you hardly ever see one around here at least.

I will say this about the GT500 gouging , and this is coming from a die hard Ford guy who has a appreciation for good cars. If you are going to pay 62,000 for a GT500 you need to add a few thousand and pick up a 06 Z06 Vette. This car put's out supercar numbers and would destroy the GT500 stock for stock. A Ford guy I am a foolish man I'm not.

Thanks Mike

mweeps

Have to agree with the Bullitt. My Dad bought one as soon as I showed him they were being made. Hardly anyone knew about them and they were marked up $1500-$3000 around here at all delerships but one. They had the only DHG in the area at the time and he but it under MSRP. It is babied like you wouldn't believed garage kept with 4700 miles right now.

Tres Wright

There is no one here that thinks Shelbys will be going for 15k over sticker a year from now. Plain and simple, if you pay 15k over sticker that would be foolish from an investment perspective. To use your example, would you buy a house right now if you knew there is a 90% chance it will be worth 1/4 less that what you paid a year from now? If you buy a marked up Shelby, you have to buy it because you want it and will enjoy it regardless of what it costs you.

My personal opinion is that these jacked up fuel prices are going to gut the performance car market. It may take a year, or two, or five. But it's going to happen. There will still be those of us that want to keep a hot rod in the garage for some weekend grins, but that's not going to be enough to sustain a high priced performance car market. The Shelby has extremely limited potential upward movement in price, and a lot of potential downward movement.

Hollywood_North GT

First of all, I'm not certain I'm going to buy one at all - certainly not in '07, as Canada's allotment of 400 cars are pretty much spoken for. Instead, I will probably buy a fully loaded '07 GT, and then reassess the "Shelby factor" in '08.

As to your question about price: regardless of whether I get one or not, I guarantee you it will be at MSRP. The reason? Simple: ADMs are illegal in Canada. Dealers cannot charge over MSRP.

I do think the Shelby will hold its value much better than a Mustang GT (which themselves are holding value quite well, I understand), but as many here have said, as a "long-term investment," it doesn't make much sense.

Hollywood_North GT

Very true. The "performance and horsepower wars" seem to be continuing to rage for the moment, but with the Middle East going up in flames - and China wanting more and more oil - it's likely that the cost of gas in North America will soon equal that of Europe, and if it continues for several years, I think the muscle car fad will only last for a couple of production cycles, max, then die out.

jacjetlag

NOT COLLECTIBLE.

14,000-25,000 units.

Fun to drive ?...sure.
Just don't mess with ANY c-6 corvette,let alone a Z-O6.

Hollywood_North GT

Werd. Of course, there's nothing new here. Stock Shelbys could NEVER hold a candle to Vettes even back in the day. The reality is that compared to similarly priced competitors (and I'm talking WITH the ADM) non-modded Shelbys are essentially posers, and that relatively speaking, the Mustang GT still represents far better bang for the buck.