The Reason for HUGE ADMs...
2/19/11, 02:04 PM
#22
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Used products are an auction market that is typically based on market conditions for those used products. A realtor hawking a used house is no different than a used car salesman. You ask a bit high because you know there is a negotiation that will take place. You have a bottom line number that you have to have to sell, and a buyer has a top line number that they will pay. The settled price is typically in the middle somewhere. But all of that has some relation to the market conditions & trends of the area as well as the condition of the used house or used car.
Whereas a brand new manufactured product has all costs factored in; the competition's product features, benefits, and price taken into consideration; reasonable profit for the manufacturer and retailer factored in; and a warranty provided for a brand new never owned product off the line - to determine msrp. Msrp is more than fair and that is why many can run 'sales' below msrp from time to time - there is still reasonable profit margin with the sale price.
But to ADD to msrp is nothing but taking advantage - akin to stealing - from the unsuspecting consumer. Thieving dealers is all they are.
Last edited by cdynaco; 2/19/11 at 09:47 PM.
2/19/11, 02:21 PM
#23
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This is a car...if you want one bad enough, then you pay to play. It's called the free market. I have no problem with the dealers ripping off the brain dead who have more money then brains. The fact is, if no one bought the cars, with the ADM, and let them sit on the lots collecting bird crap, then we could buy them below MSRP. Sadly, there are always those people who have to be the first on the block with the new toy and in some cases are willing to pay obscene amounts of money to be first.
Me, I will find another toy at or below MSRP.
Me, I will find another toy at or below MSRP.
2/19/11, 02:28 PM
#24
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Free market concepts are about competition - which brings a better price for the consumer, not worse.
ADM's are a "contrived" market.
For ex, I'm looking at picking up a .45. So I go to Colt's website, learn the msrp of models I'm interested in, and then take that info to several gun shops and retailers. Best price (which will be at or below Colt's msrp) gets my cash - because they're all the same - an all new never owned product off the line. That's how its supposed to work.
ADM's are a "contrived" market.
For ex, I'm looking at picking up a .45. So I go to Colt's website, learn the msrp of models I'm interested in, and then take that info to several gun shops and retailers. Best price (which will be at or below Colt's msrp) gets my cash - because they're all the same - an all new never owned product off the line. That's how its supposed to work.
Last edited by cdynaco; 2/19/11 at 09:49 PM.
2/19/11, 02:35 PM
#25
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I have no problem with dealers charging what the market will bear.
With a few caveats:
1) I think all final sale figures should be monitored by Ford. Any dealer charging an ADM over MSRP, when their next allocation comes up for a special edition car, Ford should charge the dealer an ADM over invoice. Ford made the car, why shouldn't it get a piece of the pie? Venture to guess who'd be crying about it first?
2) The argument that "well, how many people buy under MSRP?" doesn't wash. Most cash comes off of MSRP via incentives and delivery allowances. That comes out of Ford's pocket not the dealers'. How many dealers disclose that your sale may make them earn a "sales target bonus"? The reality is that very rarely does a dealer take a loss on a car unless they've ordered badly for their market and it's sat so long they lose their holdback.
3) Perception. 9 out of 10 people out there equate Ford with the dealers. In reality there is almost an arm's length distance. Dealers are seperate companies; they buy the product from Ford and in turn sell it to you. You are the dealer's customer and the dealer is Ford's customer.
Franchising laws make it so Ford has very little control over how well or how poorly a dealer acts. Unfortunately, when a dealer is a ****head Ford usually gets the rap for it.
Personally, I do a lot of business for Ford; I usually am responsible for up to 8 vehicles a year to be sold, whether it's because of APlan, Xplan or referrals. The day my dealer charged me an ADM on anything he'd be slaying the golden goose.
With a few caveats:
1) I think all final sale figures should be monitored by Ford. Any dealer charging an ADM over MSRP, when their next allocation comes up for a special edition car, Ford should charge the dealer an ADM over invoice. Ford made the car, why shouldn't it get a piece of the pie? Venture to guess who'd be crying about it first?
2) The argument that "well, how many people buy under MSRP?" doesn't wash. Most cash comes off of MSRP via incentives and delivery allowances. That comes out of Ford's pocket not the dealers'. How many dealers disclose that your sale may make them earn a "sales target bonus"? The reality is that very rarely does a dealer take a loss on a car unless they've ordered badly for their market and it's sat so long they lose their holdback.
3) Perception. 9 out of 10 people out there equate Ford with the dealers. In reality there is almost an arm's length distance. Dealers are seperate companies; they buy the product from Ford and in turn sell it to you. You are the dealer's customer and the dealer is Ford's customer.
Franchising laws make it so Ford has very little control over how well or how poorly a dealer acts. Unfortunately, when a dealer is a ****head Ford usually gets the rap for it.
Personally, I do a lot of business for Ford; I usually am responsible for up to 8 vehicles a year to be sold, whether it's because of APlan, Xplan or referrals. The day my dealer charged me an ADM on anything he'd be slaying the golden goose.
Last edited by OAC_Sparky; 2/19/11 at 02:36 PM.
2/19/11, 02:52 PM
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2/19/11, 03:23 PM
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I assume you would be o.k. if the dealer required a 100% non-refundable deposit in this case to take the car off the market to other potential buyers.
That is a different scenario. IF the buyer had an agreed to deal, and the dealer backed out after the market changed, shame on the dealer. The same has to hold true of the buyer though. If a buyer agrees to an MSRP deal up front and makes a deposit, the deposit shouldn't have to be refunded if the market goes lower. It's a two way street if people expect dealers to honor a pre-order commitment.
That is a different scenario. IF the buyer had an agreed to deal, and the dealer backed out after the market changed, shame on the dealer. The same has to hold true of the buyer though. If a buyer agrees to an MSRP deal up front and makes a deposit, the deposit shouldn't have to be refunded if the market goes lower. It's a two way street if people expect dealers to honor a pre-order commitment.
2/19/11, 03:26 PM
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Something like that had to have been the case. With that many bids and still 2 days til the auction ended there is no way I can see the seller taking it down. It was kind of weird though that it was just an auction for the money going to the dealer though, so I agree with the lack of 'goods' idea
2/19/11, 03:36 PM
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Absolutely*. I placed my order and laid my card down for the $3k deposit and waited for my car to be built & delivered. It is my responsibility as a consumer to shop beforehand so when I come to an agreement, I am ready to commit.
*With the caveat that non-refundable is only applicable if I didn't follow through with the final purchase. (Or some freak occurrence like an unforseen disabling accident & hospitalization that can be verified.) If they failed to order, or the transport wrecked my car pre-delivery, or they added an ADM, etc., I should not be held to a deal they cannot live up to on their end.
Last edited by cdynaco; 2/19/11 at 09:51 PM.
2/19/11, 03:37 PM
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Something like that had to have been the case. With that many bids and still 2 days til the auction ended there is no way I can see the seller taking it down. It was kind of weird though that it was just an auction for the money going to the dealer though, so I agree with the lack of 'goods' idea
It could be the car sold. That's how I bought my GT500. In my case I waited until the dealer's auction ended unsold and called up and negotiated the purchase with him directly. I don't know what ebay's policy is for an open auction before the end date, but I believe the seller can terminate an auction at any time.
2/19/11, 04:36 PM
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I remember markup auctions during the GT500 ADM period as well. I don't know what eBay's policies are as I have never actually completed a transaction there.
It could be the car sold. That's how I bought my GT500. In my case I waited until the dealer's auction ended unsold and called up and negotiated the purchase with him directly. I don't know what ebay's policy is for an open auction before the end date, but I believe the seller can terminate an auction at any time.
It could be the car sold. That's how I bought my GT500. In my case I waited until the dealer's auction ended unsold and called up and negotiated the purchase with him directly. I don't know what ebay's policy is for an open auction before the end date, but I believe the seller can terminate an auction at any time.
2/19/11, 05:42 PM
#32
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Because it is unethical.
In sales you have sales professionals and you have sales hacks. Unfortunately, too many auto consumers are unsuspecting and get screwed by the hacks. Whereas a professional would earn their commission by making a profit for their company and treating the consumer like they themselves would want to be treated.
Selling stuff at 'what the market will bear' has earned the auto sales industry the reputation they deserve. Sadly, that stench pours over the salespeople of integrity too.
EXACTLY. The manufacturer has determined the price so that every one makes a fair profit. In every other industry, msrp is typically the highest. Another company may run a sale to reduce that so they can move more volume, reduce inventory, or many other reasons. Only the new car hacks play the 'screw the consumer for all we can milk out of them!'.
Ever buy jewelry? Any idea what kind of markup there is on it?
After 30 years in sales, there's not one customer I would shy away from saying hi to if I saw them at a store or somewhere. But after screwing a customer with an outrageous ADM, how many car hacks would walk up to that customer a few months or years later.
I would. If the price was mutually agreed upon, what's there to run from?
First come first served. Not who comes up with a bigger checkbook after the first customer walked in the door, placed the order, and committed to the agreement. A business makes its real money on long term sales - volume & repeat sales. Not by gouging the unsuspected for a one shot deal.
In sales you have sales professionals and you have sales hacks. Unfortunately, too many auto consumers are unsuspecting and get screwed by the hacks. Whereas a professional would earn their commission by making a profit for their company and treating the consumer like they themselves would want to be treated.
Selling stuff at 'what the market will bear' has earned the auto sales industry the reputation they deserve. Sadly, that stench pours over the salespeople of integrity too.
EXACTLY. The manufacturer has determined the price so that every one makes a fair profit. In every other industry, msrp is typically the highest. Another company may run a sale to reduce that so they can move more volume, reduce inventory, or many other reasons. Only the new car hacks play the 'screw the consumer for all we can milk out of them!'.
Ever buy jewelry? Any idea what kind of markup there is on it?
After 30 years in sales, there's not one customer I would shy away from saying hi to if I saw them at a store or somewhere. But after screwing a customer with an outrageous ADM, how many car hacks would walk up to that customer a few months or years later.
I would. If the price was mutually agreed upon, what's there to run from?
First come first served. Not who comes up with a bigger checkbook after the first customer walked in the door, placed the order, and committed to the agreement. A business makes its real money on long term sales - volume & repeat sales. Not by gouging the unsuspected for a one shot deal.
Free market concepts are about competition - which brings a better price for the consumer, not worse.
Not always.
ADM's are a "contrived" market.
For ex, I'm looking at picking up a .45. So I go to Colt's website, learn the msrp of models I'm interested in, and then take that info to several gun shops and retailers. Best price (which will be at or below Colt's msrp) gets my cash. That's how its supposed to work.
Not always.
ADM's are a "contrived" market.
For ex, I'm looking at picking up a .45. So I go to Colt's website, learn the msrp of models I'm interested in, and then take that info to several gun shops and retailers. Best price (which will be at or below Colt's msrp) gets my cash. That's how its supposed to work.
I have no problem with dealers charging what the market will bear.
With a few caveats:
1) I think all final sale figures should be monitored by Ford. Any dealer charging an ADM over MSRP, when their next allocation comes up for a special edition car, Ford should charge the dealer an ADM over invoice. Ford made the car, why shouldn't it get a piece of the pie? Venture to guess who'd be crying about it first?
2) The argument that "well, how many people buy under MSRP?" doesn't wash. Most cash comes off of MSRP via incentives and delivery allowances. That comes out of Ford's pocket not the dealers'. How many dealers disclose that your sale may make them earn a "sales target bonus"? The reality is that very rarely does a dealer take a loss on a car unless they've ordered badly for their market and it's sat so long they lose their holdback.
This is mostly incorrect.^^^
3) Perception. 9 out of 10 people out there equate Ford with the dealers. In reality there is almost an arm's length distance. Dealers are seperate companies; they buy the product from Ford and in turn sell it to you. You are the dealer's customer and the dealer is Ford's customer.
Franchising laws make it so Ford has very little control over how well or how poorly a dealer acts. Unfortunately, when a dealer is a ****head Ford usually gets the rap for it.
This is mostly correct.^^^
Personally, I do a lot of business for Ford; I usually am responsible for up to 8 vehicles a year to be sold, whether it's because of APlan, Xplan or referrals. The day my dealer charged me an ADM on anything he'd be slaying the golden goose.
With a few caveats:
1) I think all final sale figures should be monitored by Ford. Any dealer charging an ADM over MSRP, when their next allocation comes up for a special edition car, Ford should charge the dealer an ADM over invoice. Ford made the car, why shouldn't it get a piece of the pie? Venture to guess who'd be crying about it first?
2) The argument that "well, how many people buy under MSRP?" doesn't wash. Most cash comes off of MSRP via incentives and delivery allowances. That comes out of Ford's pocket not the dealers'. How many dealers disclose that your sale may make them earn a "sales target bonus"? The reality is that very rarely does a dealer take a loss on a car unless they've ordered badly for their market and it's sat so long they lose their holdback.
This is mostly incorrect.^^^
3) Perception. 9 out of 10 people out there equate Ford with the dealers. In reality there is almost an arm's length distance. Dealers are seperate companies; they buy the product from Ford and in turn sell it to you. You are the dealer's customer and the dealer is Ford's customer.
Franchising laws make it so Ford has very little control over how well or how poorly a dealer acts. Unfortunately, when a dealer is a ****head Ford usually gets the rap for it.
This is mostly correct.^^^
Personally, I do a lot of business for Ford; I usually am responsible for up to 8 vehicles a year to be sold, whether it's because of APlan, Xplan or referrals. The day my dealer charged me an ADM on anything he'd be slaying the golden goose.
I assume you would be o.k. if the dealer required a 100% non-refundable deposit in this case to take the car off the market to other potential buyers.
That is a different scenario. IF the buyer had an agreed to deal, and the dealer backed out after the market changed, shame on the dealer. The same has to hold true of the buyer though. If a buyer agrees to an MSRP deal up front and makes a deposit, the deposit shouldn't have to be refunded if the market goes lower. It's a two way street if people expect dealers to honor a pre-order commitment.
That is a different scenario. IF the buyer had an agreed to deal, and the dealer backed out after the market changed, shame on the dealer. The same has to hold true of the buyer though. If a buyer agrees to an MSRP deal up front and makes a deposit, the deposit shouldn't have to be refunded if the market goes lower. It's a two way street if people expect dealers to honor a pre-order commitment.
2/19/11, 06:20 PM
#33
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Nope.
This just goes to show that there are many in the sales 'profession' (I use that term loosely) that have zero conscience and even less awareness of how their customers actually view them - particularly when they later learn just how bad they got gouged by a greedy overcharge.
Goodbye repeat business, goodbye referrals, and goodbye reputation in the community.
Last edited by cdynaco; 2/19/11 at 06:26 PM.
2/19/11, 06:34 PM
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2/19/11, 07:14 PM
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lol Now that's funny right there. And if that customer didn't confront that salesman (don't want this to be personal), what do you think he is telling all his buddies at the bar, at work, etc., about that $10k ADM? That the salesman is a great guy and will give a great deal? That the Dealer is really fair and watches out for the customer?
Nope.
This just goes to show that there are many in the sales 'profession' (I use that term loosely) that have zero conscience and even less awareness of how their customers actually view them - particularly when they later learn just how bad they got gouged by a greedy overcharge.
Goodbye repeat business, goodbye referrals, and goodbye reputation in the community.
Nope.
This just goes to show that there are many in the sales 'profession' (I use that term loosely) that have zero conscience and even less awareness of how their customers actually view them - particularly when they later learn just how bad they got gouged by a greedy overcharge.
Goodbye repeat business, goodbye referrals, and goodbye reputation in the community.
What you fail to understand is that the people who pay ADM's GENERALLY aren't mad or feel gouged; it's the ones who don't (I'm sure like yourself) who feel that way about the idea of it.
Do you have a buddy who paid an ADM for a vehicle?
There is a poster in THIS THREAD (remember TMC forum members are well informed and for the most part are the toughest of the tough) who paid an ADM at a dealer which he uses to service a fleet of vehicles and purchases many vehicles from.
Not at all, just that there is a lot more discounting that goes on than manufacturer incentives and that it is a very competitive market, especially locally. I have heard that we have the highest dealers per capita in the nation, but I can't confirm. Regardless, people don't walk in and pay MSRP - rebates very often.
2/19/11, 07:33 PM
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Not at all, just that there is a lot more discounting that goes on than manufacturer incentives and that it is a very competitive market, especially locally. I have heard that we have the highest dealers per capita in the nation, but I can't confirm. Regardless, people don't walk in and pay MSRP - rebates very often.
The argument that "well, how many people buy under MSRP?" doesn't wash. Most cash comes off of MSRP via incentives and delivery allowances. That (meaning, that money) comes out of Ford's pocket not the dealers'. How many dealers disclose that your sale may make them earn a "sales target bonus"? The reality is that very rarely does a dealer take a loss on a car unless they've ordered badly for their market and it's sat so long they lose their holdback.
Last edited by OAC_Sparky; 2/19/11 at 07:40 PM.
2/19/11, 07:38 PM
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People like to ***** when it takes over MSRP to buy but are quick to beat you to death on a Focus, F150, etc. If you don't work for a dealership you wouldn't believe the kind of deals we take that we LOSE money on.
2/19/11, 07:42 PM
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