Interesting conversation with dealer re: pricing

[Headsong]

There are 4 elements to a deal and we are only focused on one and you really need to look at all of them closely:
1. Price
2. Downpayment
3. Trade In
4. Monthly Payment/terms

I am fine with Price = MSRP with a dealer that I trust to give me excellent service. I am not looking to get a discount on my perfectly done steak. I will pay a fair value for that steak and I care more about the taste of that steak than the price.

I am getting 2.5% interest from a local credit union which is a really good deal and as good as "cash on the hood" offer with a higher interest rate from Ford Credit, when you do the math. It is also better for me than paying cash for the Bronco, because I think I can beat 2.5% with my money for the next 5 years.

I am selling my Mustang on VROOM for more than the dealer will give me. He was honest and told me that was the case.

My downpayment will be based on what I get from the Mustang and how much I can earn by investing it until my order is ready.

I'd disagree. #2 is merely part of #1 and how it's structured. #3 is usually closely connected to #1, which is why it's best to not talk trade in unless and until you need to. And #4 has so many other factors that come from the F&I room....extended warranties, insurances, coatings and the like...and where you finance.

to me, it's #1: Service/communication. Right now, I'm abandoning my first dealer since they only contact me when I reach out to them. Meanwhile, two other dealers keep reaching out.

#2 Price, but this includes what are they going to do in the F&I room? A dealer will find a way to make their money. And if you don't know how, they gotcha.

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[DUSTYcazOREGON]

I just ordered at MSRP....no ADM. A brand new release vehicle....if you can get under MSRP....kudos to you and your Dealer. I want it, they have the keys to it (eventually)....they have the King, Queen and Aces.

 

[broncoskip]

This is not the time for negotiations. Ensure they are not charging ADM, weigh your options with going with a dealership that is advertising a discount, and move forward.

The time to negotiate is when you and the dealership are ready to make a deal, your trade, your down payment are on the table, and the loan and monthly payment is being discussed.

That's when the fun starts. I love this game.

 

[Rydfree]

I'm not looking to file a suit, I'll just take my business elsewhere. But what they admitted to doing, if true, is illegal.

Thanks all for the replies. This was my first post, despite being a long-time lurker. Looking forward to being a Bronco owner.

if this were my dealer i would switch . The way I look at it is , just because it isn't illegal doesn't make it the right thing to do .

 

[RandyStewart]

I have been working through my build with my local dealership. Throughout the process, they have been super vague on pricing. My sales rep is working on the build sheet this morning, and I finally forced him to have the pricing conversation. He told me that their dealership made an agreement with all other dealers in the area that they would price at MSRP. I told him, "That's interesting. That sounds a lot like you just admitted to collusion and price fixing, which is illegal per anti trust laws." It looks like I will have to change my order to Granger and lodge a complaint with Ford.

Anyone else have this experience?

For those of you who have switched your dealer, do you need to call them first to confirm that they would accept it, or do you just deal with Ford Customer care, and then sit back and wait for the new dealership to contact you?

PS - I am in no hurry for the truck to arrive. I'd be fine with a MY22.

My dealer has said from day 1 that they were going to stick with MSRP. Now that I have ordered, I'm perfectly fine with that because I know there are 40+ reservations behind mine that would love to have my spot.

 

[mrock]

Don't waste your money on a lawyer. There is nothing "illegal" about selling at "Manufacturers Suggested Retail Price." You certainly have the right to walk away, but the only place you will have a legal case is the imaginary world of the internet.

 

[Toccoa]

The government forces you to purchase through a car dealership. I don't see them coming to your rescue here. I think your only recourse is to take your reservation elsewhere.

 

[Used2jeep]

It absolutely is an illegal and unfair business practice, and is in violation of anti-trust laws that prevent competitors or separate businesses from colluding to establish pricing. It prohibits competition and is a violation of the free market. I'm not naive enough to think this never happens, but I am surprised that they would willingly admit to it.

That is 2 dealerships that have admitted it in the last 2 days.

 

[Brew3x]

Other than the dealer outright admitting this is going in MA I’m running into the same thing.

 

[MSPbronco]

Don't waste your money on a lawyer. There is nothing "illegal" about selling at "Manufacturers Suggested Retail Price." You certainly have the right to walk away, but the only place you will have a legal case is the imaginary world of the internet.

I'm sorry, but respectfully, you are very wrong. Sure, there's nothing illegal about a single dealership selling a vehicle at MSRP. But you are missing the key point here: a dealership cannot work with other dealerships in the area to agree, be it written, verbal, or inferred, on setting a price. That's collusion and price fixing, it removes competition from the market, and it's highly illegal. There is nothing imaginary about any of this. There are very specific anti-trust laws set forth by the FTC on this topic.

Would it be difficult to prove without getting anything in writing? Maybe. Do I have any interest in taking this up? No. I'm simply going to change dealerships and move on. But I do take umbrage with you and others insinuating that this activity isn't illegal when it absolutely is. I'm sorry, but this is not an opinion, it's facts.

 

[Headsong]

I thought early on Ford had decreed no more than MSRP....if you can get something off that, great. I'm frankly happy that three dealers near me all are at (one offered a few hundred off)...

 

[Rick Astley]

I have been working through my build with my local dealership. Throughout the process, they have been super vague on pricing. My sales rep is working on the build sheet this morning, and I finally forced him to have the pricing conversation. He told me that their dealership made an agreement with all other dealers in the area that they would price at MSRP. I told him, "That's interesting. That sounds a lot like you just admitted to collusion and price fixing, which is illegal per anti trust laws." It looks like I will have to change my order to Granger and lodge a complaint with Ford.

Anyone else have this experience?

For those of you who have switched your dealer, do you need to call them first to confirm that they would accept it, or do you just deal with Ford Customer care, and then sit back and wait for the new dealership to contact you?

PS - I am in no hurry for the truck to arrive. I'd be fine with a MY22.

I'm sorry, but I don't understand where the dealer has done something underhanded. (personal feelings aside)

Were you given a price guarantee that was different than MSRP prior? Was there the promise of x-plan or discounting that you can produce?

A retailer selling the product at the price the manufacturer has stated isn't collusion or underhanded.

 

[timhood]

There are 4 elements to a deal and we are only focused on one and you really need to look at all of them closely:
1. Price
2. Downpayment
3. Trade In
4. Monthly Payment/terms

Item #1 is really the most important part, because a savvy buyer will control all other items.

Item 2 has no effect on the other items. It only matters for what the financed amount will be.

Item 3 is best avoided where possible. You can 100% guarantee you'll get screwed on a trade-in. The dealer always buys your vehicle for less money than you could otherwise sell it because they need to sell it (either at auction or at retail) for a profit. When you trade in a vehicle, you are accepting less money in exchange for convenience. I've had friends/family claim "what a great deal they gave me on my trade-in". Rest assured, every dollar above wholesale that you got on your trade-in was made up somewhere else on the purchase agreement. Higher finance charges, higher purchase price, True Coat®--something.

Item 4: Never buy a vehicle based on monthly payments. Every other financial item can be manipulated to make a monthly payment whatever you want. The two important items are your purchase price and cost of financing.

Here's my list for buyers:

1. Get your financing arranged. Paying cash? You're set. Getting a loan? Research where you can get the lowest APR based on your credit score. Credit unions are your friend. You will almost certainly get the lowest rates at a credit union. The only time you'll ever do better than a credit union is if the manufacturer is offering incentive financing, which is not the case for the Bronco.

Use your estimated purchase price and a loan calculator to determine your monthly payments based on financed amount (account for down payment, taxes, registration, etc.) and loan length. Pay attention to the amount of total interest you will pay over the life of the loan. Keep in mind that longer loan periods will have higher interest rates. Depending on the lender, the interest rate can jump dramatically above 60 or 72 months. Adjust your expectations based on what you can afford.

2. Agree on a sales price. Agree on a price that is for the purchase price of the car with only tax and license and government-required fees added. Here it helps to know what the dealer doc fee is, because you'll want to lower your offering price to account for any inflated amount of the doc fee.*

3. Skip any and every add-on the finance manager tries to throw at you. Most are worthless and all are over-priced.

4. Don't trade in a vehicle. If you do, use kbb.com or a similar web site to get an idea of just how much money you're handing the dealer. Then re-read #4 again. ?

*About dealer doc fees. These are not required by any state or local government. Neither does the government require they be fixed. A dealer will claim "By law, we have to charge each customer the same amount." That is a lie to keep you from trying to negotiate that fee. The only state laws I'm aware of are those that cap the doc fee, not allowing a dealer to charge more than a specific amount. (Thanks to those states!) That fee is what the dealer charges to enter your information and print out your paperwork from the computer. It pays the finance manager his income in addition to all the money he makes selling you window etching and True Coat®. I can live with a reasonable fee, but as a matter of practice, I avoid paying it. Keep in mind that dealers will double-down on the "we have to charge everyone the same price" mantra (which is not true--only government fees are fixed.). Some have even pointed me to a sign they printed up that quotes the state law that says a dealer doc fee is not a government fee (LOL). At that point, knowing that the finance manager doesn't want to get nothing to fill out paperwork, I just use change the tactic: "I don't care if you want to charge me the doc fee, as long as you take the money out of the price of the car." To close the deal, the sales price of the car goes down by the doc fee. Win-win. On paper, I paid the fee, but I had already negotiated the price I was willing to pay and got a price lower to account for the fee. Here's where it's important to pay attention to items 3 and 4. If you have a trade-in or get conned into buying worthless add-ons, those prices can magically and quietly change to build that doc fee back in. If you finance through the dealer, they can change the APR, throw in a "loan acquisition fee" or other things.

TL;DR: line up your financing, agree on a price for the vehicle only, don't purchase anything other than the vehicle, don't trade in, negotiate or back-out the doc fee.

 

[MSPbronco]

I'm sorry, but I don't understand where the dealer has done something underhanded. (personal feelings aside)

Sure. See my most recent post, please.

 

[Apples]

This is not the time for negotiations. Ensure they are not charging ADM, weigh your options with going with a dealership that is advertising a discount, and move forward.

The time to negotiate is when you and the dealership are ready to make a deal, your trade, your down payment are on the table, and the loan and monthly payment is being discussed.

That's when the fun starts. I love this game.

I disagree. When you're sitting there with the truck just outside the window, and all the variables are on the table, is the worst time to start negotiating. That's the moment the salesperson starts asking you 'what are you looking for for a monthly payment?' and they start playing magic numbers.

Get a solid PRICE on the vehicle up front or you will end up paying more down the road. Trade in and financing can then be done with or without the dealer at delivery, based on what's being offered. The monthly payment is the result, not the starting point.

@timhood said it better than I did.

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