ADM - It won't stop

[3G & 6G]

Nobody likes ADM but the dealers. Look how many threads here are talking about it. The reality is that ADM will continue until people quit paying it. It really is that simple, but oh so difficult to make happen.

We've all seen stories of people walking away from previously agreed on deals because of ADM, and we should absolutely applaud them. They should get special status here among fellow enthusiasts. But for every person who walks away, there are many more who are willing to pay ADM. That's why it won't go away.

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[Newdoc]

It looks like we are at least 12 months away from reliably getting through supply chain and chip issues and there will still be built up demand on those more patient than the current buyers willing to pony up 20% or more. But then you will get those willing to go 5-10% and then MSRP and then so on.

I could see a recession and higher interest rates putting a dent in demand but it is hard to see what doom porn prognosticators are reasonable about their prediction. Not sure our economy is sustainable at the current pace if inflation and supply scarcity.

 

[usarms]

It's everywhere...

New Cars Priced the Highest Over MSRP - iSeeCars
Rank	Vehicle	% Above MSRP	$ Above MSRP
1	Jeep Wrangler	26.7%	$8,925
2	Ford Maverick (Hybrid)	25.0%	$5,601
3	Porsche Macan	23.3%	$13,254
4	Jeep Wrangler Unlimited	22.9%	$9,534
5	Jeep Gladiator	22.5%	$9,824
6	Ford Maverick	22.2%	$5,368
7	Lexus RX 450h	21.0%	$10,365
8	Ford Bronco	20.6%	$7,783
9	Genesis GV70	20.0%	$8,611
10	Mercedes-Benz GLB	19.8%	$7,992
11	Chevrolet Corvette	19.3%	$15,218
12	Ford Mustang	19.1%	$6,941
13	MINI Countryman	18.9%	$6,325
14	Lexus RX 350L	18.6%	$9,242
15	Mercedes-Benz GLA	18.6%	$7,142

 

[BroncoAZ]

It looks like we are at least 12 months away from reliably getting through supply chain and chip issues and there will still be built up demand on those more patient than the current buyers willing to pony up 20% or more. But then you will get those willing to go 5-10% and then MSRP and then so on.

I could see a recession and higher interest rates putting a dent in demand but it is hard to see what doom porn prognosticators are reasonable about their prediction. Not sure our economy is sustainable at the current pace if inflation and supply scarcity.

As long as the US dollar is the favored world reserve currency we can keep moving along, if that changes it’ll be a rough ride. I just sold my rental house (formerly my primary residence before I relocated) for 114% more than I paid in 2017 in this inflated market, got out while the getting was good. I could kick myself down the road if the value goes up another 20%, but I just can’t see where this overheated market doesn’t pull back somewhere. I’m looking to buy in a similar hot real estate market, I’ll probably wait it out to see what happens next year with rates going up.

The Fed increasing interest rates should impact the demand as higher rates price people out of certain things. There will always be a demand for basic family cars, but specialty vehicles that get shitty gas mileage are a luxury for most. ADM will continue until Broncos are sitting on lots for 15+ days, discounts won’t happen until they are sitting 30+ days.

 

[GBronco]

The only thing that will slow ADM for the next 12-18 months is the manufactures raising the dealer cost…which they will, because they are leaving money on the table. Eventually the cost and demand will equalize. As much as the OEMs and dealers love to sell new vehicles…the love servicing 2-5 year old cars even more…that’s where the real margin is.

 

[MnLakeBum]

The ADM is actually much worse with sports cars such as Porsches and Corvettes.. Boats are ridiculous right now. My 2018 boat is worth $15k more than I paid for it and it has a lot of hours on it.

 

[Jason]

You certainly do have people that are paying a premium just for the sake of having the next cool thing sooner than their friends (the technical term is, “rich pricks”).

This isn’t what’s happening with Kia Tellurides or minivans though. The problem is that you have a lot of people that need a car at a time when supply is low. If someone gets into an accident or a prohibitively expensive repair surfaces, then they simply need to buy a car. My two cars have 217k and 170k miles on them, and while my Bronco is locked in at a good price, what will I do if my car breaks tomorrow? Or both next month? I’ll probably pay an ADM on each of them. I’d rather pay $5k over sticker at a dealer than buy a used car for $40k that should be $20k.

I hate ADMs, and the fact that the dealer lobby has a century of favorable laws that prevent manufacturers from stepping in. Unfortunately, it might be why older companies fail, and new ones like Tesla succeed as they control everything from manufacturing to delivery.

ADMs will be around until supply exceeds demand, which I think will be a while. I imagine there are a lot of people out there like me that are racking up the miles and hoping nothing expensive breaks.

 

[Carolina Jim]

The only thing that will slow ADM for the next 12-18 months is the manufactures raising the dealer cost

you nailed it....because it's gonna get worse before it gets better"

S&P outlook for the next TWO years: In March, S&P Global Mobility cut its global auto production forecast by 2.6 million vehicles in both 2022 and 2023 because of the conflict. The worst-case scenario totaled as much as 4 million lost vehicles.

 

[gryphon1231]

Nobody likes ADM but the dealers. Look how many threads here are talking about it. The reality is that ADM will continue until people quit paying it. It really is that simple, but oh so difficult to make happen.

We've all seen stories of people walking away from previously agreed on deals because of ADM, and we should absolutely applaud them. They should get special status here among fellow enthusiasts. But for every person who walks away, there are many more who are willing to pay ADM. That's why it won't go away.

I don't have a problem with ADM's. When you time the market right you can by a new car at a discount. that just the nature of buying cars in the US.

My issue is with SOME dealership refusing to negotiate in good faith when people are placing their orders. If the dealership wants to charge an ADM fine, just be up front about the pricing and don't place surprise mandatory dealers added options to the order when someone shows up to get their car.

 

[Monster1926]

I sent an email to a dealer soliciting offers on 2 bronco raptor allocations they have. One was spoken for and one was available, $30000 over if I finance with them $50000 over sticker if I pay cash. It’s actions like these that make me excited for auto makers to get rid of the dealer model. It sucks for the honest dealers that charge MSRP or under invoice, but anything over is awfully stupid.

 

[LarryZiegler]

It's everywhere...

New Cars Priced the Highest Over MSRP - iSeeCars
Rank	Vehicle	% Above MSRP	$ Above MSRP
1	Jeep Wrangler	26.7%	$8,925
2	Ford Maverick (Hybrid)	25.0%	$5,601
3	Porsche Macan	23.3%	$13,254
4	Jeep Wrangler Unlimited	22.9%	$9,534
5	Jeep Gladiator	22.5%	$9,824
6	Ford Maverick	22.2%	$5,368
7	Lexus RX 450h	21.0%	$10,365
8	Ford Bronco	20.6%	$7,783
9	Genesis GV70	20.0%	$8,611
10	Mercedes-Benz GLB	19.8%	$7,992
11	Chevrolet Corvette	19.3%	$15,218
12	Ford Mustang	19.1%	$6,941
13	MINI Countryman	18.9%	$6,325
14	Lexus RX 350L	18.6%	$9,242
15	Mercedes-Benz GLA	18.6%	$7,142
Overall Average	9.9%	$3,753

I don’t see the Raptor or TRX trucks (though they are limited production vehicles)

 

[BDsquatch]

The Bills Suck

 

[3G & 6G]

The Bills Suck

Way to keep it on topic.

 

[DUSTYcazOREGON]

I see 3 "people" at fault here:
1. Greedy Dealers....especially those that did have some type of informal/verbal agreement to MSRP.
2. The purchaser. Yes....the purchaser. A signed order sheet is not enough. You MUST have a signed contract with the price agreed to and all other factors. I have; MSRP guaranteed letter from the Dealership Owner. Signed emails. Signed purchase agreement and a signed contract addendum (that I created) that covers this and other issues. What should be agreed to in writing?; MSRP, cost of document fees, that you want no treatments/alarm system/no add on's, extended warranty (if you want it and cost), you can even pre-negotiate your trade-in value so they do not low ball you on that at final purchase time. YPOU MUST PROTECT YOURSELF. For those that did not....lessons learned.
3. Possible...FORD for not stepping in sooner with stronger "do not do that" and sanctions to Dealers that are gouging on price, especially under the conditions noted from original poster.

----PROTECT YOURSELF WITH A SIGNED CONTRACT!------

 

[Jhopkinson]

The Bills Suck

You obviously paid a large ADM and now must be embarrassed. Move along troll.

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