Five Oh Brian

Thanks, JonW. As I know what you do for a living, it is surprising you're here. Don't worry, your secret is safe with me!

Years ago, on another forum, under a different user name I did freely sell my wares, so to speak. Helped my sales guys sell additional cars they wouldn't have otherwise sold. However, it didn't line my pockets (I'm a salaried manager) and it often took away time I could have better spent online just having a good time talking cars with like-minded enthusiasts.

My best friend was a GM techician for 15+ years. He spent a lot of time on LS1 or LS2 forums answering tech questions for free. At first he thought it was fun, but he later got overwhelmed with PM's, had people show up at his dealership looking for deals (outside of his control as a technician), and it got out of hand for him. His leisure time online turned into work at home, like JonW mentioned above. So he, too, posts anonymously anymore at those GM boards out there.

Anonymously, I can give you all an insider's view into the world of dealerships and Fords that you might now get otherwise. It's fun to play devil's advocate and talk about both sides of the equation without fear of repercussions from the boss or Ford Motor Company.

Five Oh Brian

This industry also supports big rebates and huge dealer discounts to consumers to move the vast majority of new Ford vehicles. That tells that, in fact, MSRP has everything to do with supply and demand. Too many F-150's out there? No problem, put a $4K rebate on them and get the dealers into a bidding war where they have to discount $3K to $5K (or more) on top of the already-generous rebate to move them out.

Not trying to put duct tape over your mouth, cdynaco! Trying to help you understand that when you voluntarily agree to a transaction, it's dirty pool on your behalf to start slandering the other party publicly after-the-fact and suggest that legal action or public hazing will ensue if they don't bend to your will. The fact that you mentioned Galpin Ford and Butler Ford publicly in these forums in a negative light is, indeed, slander and uncalled for. If you don't like the deals they offered, so be it; move on to another dealer. At least they were upfront and honest with their price - nothing illegal about their actions! Do I personally think an ADM is a good thing on a Bullitt? Heck no, so I'm not defending their pricing. But, they did nothing illegal or unethical to you. You just didn't negotiate well enough.

Five Oh Brian

How about we federally mandate no ADM's and everything be sold at MSRP. Oh wait, that means us dealers will make waaaaaay more money! Yeah for us! We can stop discounting below MSRP on the 99% of what we sell now for giveaway prices! Hurray - thanks, cdynaco! No more special ordering most of Ford's lineup at $99 over invoice for our customers anymore cuz we'll be able to get MSRP when cdynaco's "MSRP or nothing" bill passes someday!

A little farfetched? Of course. But, every customer is happy when they come in and pay invoice for 99% of what they buy here (and get big rebates most of the time, too!), but nobody wants to let the dealers make a little money where they can on specialty items. It needs to be a two-way street, my friends! Want an awesome discount on the vast majority of our products? No problem! But, you gotta accept that some products may command higher prices and - God forbid - a markup when the market so dictates. Forcing dealers to discount, discount, and only discount is a one-way street and not the intention of a free-market economy.

Five Oh Brian

I worked in jewelry for 8 years. Want to guess what that "suggested retail" tag on that diamond or setting means? Squat! That suggested price in jewelry is a 300-500% markup, hence the reason jewelry stores can "discount" so deeply when pushed to. However, many lambs get fleeced when they go into a jewelry store (often buying on pure emotion) and pay the outrageous full "suggested retail" farce that's tagged on the piece in question.

I worked in furniture retailing for quite awhile, as well. Same story as jewelry, except that most purchases are more pragmatic and less emotional, so consumers are more willing to ask for discounts off the "MSRP" listed by the manufacturers on their wares. However, with a 200-400% markup on most furniture items, paltry 20-30% discounts are an insult to someone like me who has worked in the industry who knows better!

So, while these two examples don't exemplify an "ADM", per se, they might as well as those "MSRP's" are pure fiction and only posted to give a very high ceiling to the beginning of negotiations. The auto industry is more regulated, so MSRP has been pared down closer and closer to actual invoice cost leaving dealers less and less margin every year. Used to be that MSRP on cars was 15-20% above invoice. Nowadays, it isn't even half of that! New $15K Ford Focus? There is about a $300-$500 difference between invoice and MSRP. Dealers are getting squeezed by manufacturers who keep narrowing that gap, and are getting squeezed by consumers who keep insisting on paying invoice (or less) and who expect rebates on everything. Yeah, I know, poor dealers. Cry me a river. But, selling new cars is not a profitable venture anymore. Gotta have a used car dept, parts dept, service dept, and body shop to stay in the black these days!

Five Oh Brian

Worth noting, I work for a dealership that does not negotiate price. We are a one-price store. No-haggle! So, to your points above, any customer can walk in and get the exact same price on any particular car we have for sale. There are a growing number of one-price car dealers out there, so I believe there is light at the end of the tunnel for you.

MustangLynda

I think you just hit the nail right on the head, IMO anyway. Really that's all I require from a dealership. The rest is up to me.

cdynaco

Hi Brian:

Thanx for all of your thoughtful comments and education. I really appreciate the effort. I've learned a lot here and as I have stated, wish I would have found this forum first. With 1100+ views in the first 48 hrs. maybe some others have learned something too.

Couple things for clarity:
1. I've already noted in a previous post that I never suggested or stated I would take any legal action. For gosh sakes, for 2500 bucks?? You're gonna pay that much in WA sales tax. I did state my course of action was to write CEO's and see if I can get the ADM waived. Especially since many dealers are taking XYZ plans. This is the last new car I'll ever buy so I guess I won't have to worry about ADM's in the future anyway.
2. Mentioning a business name about events that actually happened is not slander. And I have not detailed the half of what actually occurred from multiple conversations with these 3 dealers. As an American consumer in a country that values free speech (i.e. no duct tape comment), I will speak out about good experiences as well as bad. I tend to be a 'product evangalist' so it behooves businesses I deal with to treat me just as fair as the next guy.
3. I've been breeding Old Line Foundation Apps for 20 years and never had 2 that are the same - that's a big reason I like 'em. Its so exciting when a foal is about to be born cause you're waiting to see what color you're going to get. (I've had 100% App to App color production.) I have 2 black blankets from the exact same breeding, and 2 leopards from that exact same breeding. (The leopards are 12 gen leopards in unbroken line from 1840 Nez Perce.) Yet I can still tell all of them apart - even in the dark - because no 2 are alike. That's just not a good comparison to Henry Ford's assembly line that produces thousands and thousands of the same brand spankin' new product.

I guess we'll have to agree to disagree on a few things - because I don't want to be disagreeable to you - or anybody. You are proud of your company and should be. Sounds like they are the cream of the crop.

Take care and I wish you a successful 2008!

PS: I'm posting the Gallup poll results next and unfortunately for your industry, the public perception is that most dealers are not as reputable as yours, and that perception has declined dramatically in the last 4 years. Are ADM's and the usual price 'free for all' a factor? I think you know what my opinion is! LOL

cdynaco

I think the results of the most recent Gallup poll says it all. With a net positive rating of only 6%, it confirms there's a substantial problem in the way New Car Dealers have been doing business and a lot of customers aren't happy. What should be most disturbing to the Big Three CEO's and all New Car Dealers, is the significant DROP of 27% in the last 4 years!

Are the price games & ADM's at New Car Dealers part of the cause of this drop? If you're still unsure of my opinion, go back to post #1




At the other end of the spectrum, seven of the sectors tested have seen drops of 20 points or more in their net positive ratings over the last four years. In particular, it is important to note that the drop in the evaluation of the federal government has been more precipitous over this time period than the drop of any of the other 24 sectors tested. The oil and gas industry has undergone almost as substantial a drop since 2003, followed by the real estate industry, electric and gas utilities, the automobile industry, the healthcare industry, and the pharmaceutical industry. These sectors have either not performed well in recent years or have been controversial for earning soaring profits while charging consumers high prices for their products.
<O</O
The poll:

http://www.gallup.com/poll/28615/Annual-Update-Americans-Rate-Business-Industry-Sectors.aspx

The chart (in case it isn't clear in the pic):

http://www.gallup.com/poll/12748/Business-Industry-Sector-Ratings.aspx

Gotta run,
Best Wishes!

RCSignals

If any one really wants to make contact with you at the dealership i'm sure it wouldn't take too much to figure out teh correct one.

It existed before that, even if only suggested by the manufacturer.
Ford has always had a price set for their products, long beffore any legislation.
Actually before the legislation Ford probably had more control over what it's dealers could sell a vehicle for.

Five Oh Brian

Yes, but read the whole story, and the poll explains that Americans are just plain sour all together, mostly due to the economy in general. I have a very strong opinion personally that some industries are raping us left and right: pharmceuticals, healthcare, oil industry, etc. Many of the business sectors listed disappoint me. The overall economy disappoints me. That gallop poll doesn't specifically point to the auto industry as a sore spot, and they even mentioned that of those with the biggest drops in the past four years, at least the auto industry stays net positive, so more people are positive than negative, and add in those who are neutral and the auto industry doesn't seem to fare too badly.

Five Oh Brian

Perhaps, but I'd prefer they didn't. I'm not here to sell cars. I just want to exchange info here. The info I share isn't always favorable to my boss or the auto industry, often it is to advocate for the consumers out there. If I can help arm you all with info you might not otherwise have, then perhaps situations like cdynaco's can be fixed or can be avoided in the future.

Tony Alonso

It's because a large segment of the car buying population were affected by the "Detroit Three's" quality issues and being out-of-touch with consumer needs through the 80s and early 90s. I have seen ADMs at Lexus dealers, MINI dealers, Toyota dealers, BMW dealers, etc. It's a function of the demand for what is perceived as "hot" vs. supply.

A lot of folks talk about the manufacturer's "controlling" dealers who mark-up, but in the 20 years I have been in the car buying market, I have yet to see any real solution, given franchise laws and the willingness of some people to pay more because they value (desire) a marked-up car enough to do it.

Stangers

and thats whats its all about right?
move on,enjoy your new Bullitt and good luck!

05fordgt

Brian, you are SO SO right! Pharmaceutical companies are making a KILLING from what they charge for pills. I take 20 pills a day for my transplant and it costs me close to $200 a month and this IS with insurance. And that too kills me. If the government had some stones to regulate some things, gas should be the 1st (An oil company shouldn't make something like $10 Billion in a single quarter. This is INSANE). Then, the healthcare issue should be taken care of. Everyone should coverage and it shouldn't cost an arm and a leg to get it. I can go on and on but you covered it in your post.

cdynaco

cdynaco

sorry for the drop bro, just gimme me a 2nd chance, I'll earn it!

05fordgt

And NE just picked off Manning!! Talk about a change for the worse for the G-Men!!

cdynaco

Yeah Brain, I know, I read it all... and so let me "level the playing field" ...

Gallup no doubt asked general questions about the entire automobile industry - not just New Car Dealers (and ADM's) - i.e. I assume used car dealers, body shops, mechanics, etc. were included. From what I read, it wasn't clarified. However, the new car segment must be a significant percentage of the total.

Nevertheless, I commend your efforts to turn lemons into lemonade (sure you're not in the sales dept?).

However, the standard phrase is "who remembers #2"?? Much less #13!!!

So defending a 2007 barely POS 6% ranking - #13 position, what industry are you again??

Kidding... really...

I''ll shut up now. Really. Promise. Mean it.

Peace

cdynaco

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cdynaco

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