Ford doing something about greedy dealers and flippers?

[Lone Star Proud]

John Cena sold his GT40, Ford sued him.

Rule #7

https://www.topspeed.com/cars/rules-of-owning-a-ford-gt-ar185442.html

He was too busy apologizing to the china government to drive his car.

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[MattIngram]

https://www.sec.gov/Archives/edgar/data/1019849/000095012402000556/k66280ex10-2_13.txt

Great information and post. Here’s the sections before/after for context and the termination provisions. I’ve bolder certain areas of interest but again not a lawyer:

6. (h) CUSTOMER HANDLING. The Dealer shall cooperate with Company programs, and develop and maintain his own programs, designed to develop good relationships between the Dealer and the public. The Dealer shall promptly investigate and handle all matters brought to his attention by the Company or the public relating to the sale or servicing of COMPANY PRODUCTS in the DEALER'S LOCALITY, in accordance with procedures set forth in the applicable CUSTOMER SERVICE BULLETIN, so as to develop public confidence in the Dealer, the Company and COMPANY PRODUCTS. The Dealer shall report promptly to the Company the details of each inquiry or complaint received by the Dealer relating to any COMPANY PRODUCT which the Dealer cannot handle satisfactorily. The Dealer shall not make, directly or indirectly, any false or misleading statement or representation to any customer as to any VEHICLE, GENUINE PART or other COMPANY PRODUCT as to the source, condition or capabilities thereof, or the Dealer's or the Company's prices or charges therefor or for distribution, delivery, taxes or
other items.

6. (i) BUSINESS PRACTICES, ADVERTISING AND PROGRAMS. The Dealer shall conduct DEALERSHIP OPERATIONS in a manner that will reflect favorably at all times on the reputation of the Dealer, other Company authorized dealers, the
Company, COMPANY PRODUCTS and
trademark and trade names used or claimed by the Company or any of its subsidiaries. The Dealer shall avoid in every way any "bait", deceptive, misleading, confusing or illegal advertising or business practice. The Company shall not publish or employ any such advertising or practice or encourage anydealer or group of dealers to do so.

6. (j) COMPLIANCE WITH LAWS, RULES AND REGULATIONS. The Dealer shall comply with all applicable federal, state, and local laws, rules and regulations in the ordering, sale and service of COMPANY PRODUCTS and the sale and service of used vehicles, including without limitation those related to motor vehicle safety, emissions control and customer service. The Company shall provide the Dealer, and the Dealer shall provide the Company, such information and assistance as may be reasonably requested by the other in connection with the performance of obligations under such laws, rules and regulations.

TERMINATION OR NONRENEWAL OF AGREEMENT

17. (b) BY COMPANY DUE TO EVENTS CONTROLLED BY DEALER. The following
represent events which are substantially within the control of the Dealer and over which the Company has no control, and which are so contrary to the intent and purpose of this agreement as to warrant its termination or nonrenewal:

(5) The Dealer shall have engaged, after written warning by the Company, in any advertising or business practice contrary to the provisions of subparagraph 6(i) of this agreement.

 

[MattIngram]

Great information and post. Here’s the sections before/after for context and the termination provisions. I’ve bolder certain areas of interest but again not a lawyer:

6. (h) CUSTOMER HANDLING. The Dealer shall cooperate with Company programs, and develop and maintain his own programs, designed to develop good relationships between the Dealer and the public. The Dealer shall promptly investigate and handle all matters brought to his attention by the Company or the public relating to the sale or servicing of COMPANY PRODUCTS in the DEALER'S LOCALITY, in accordance with procedures set forth in the applicable CUSTOMER SERVICE BULLETIN, so as to develop public confidence in the Dealer, the Company and COMPANY PRODUCTS. The Dealer shall report promptly to the Company the details of each inquiry or complaint received by the Dealer relating to any COMPANY PRODUCT which the Dealer cannot handle satisfactorily. The Dealer shall not make, directly or indirectly, any false or misleading statement or representation to any customer as to any VEHICLE, GENUINE PART or other COMPANY PRODUCT as to the source, condition or capabilities thereof, or the Dealer's or the Company's prices or charges therefor or for distribution, delivery, taxes or
other items.

6. (i) BUSINESS PRACTICES, ADVERTISING AND PROGRAMS. The Dealer shall conduct DEALERSHIP OPERATIONS in a manner that will reflect favorably at all times on the reputation of the Dealer, other Company authorized dealers, the Company, COMPANY PRODUCTS and trademark and trade names used or claimed by the Company or any of its subsidiaries. The Dealer shall avoid in every way any "bait", deceptive, misleading, confusing or illegal advertising or business practice. The Company shall not publish or employ any such advertising or practice or encourage anydealer or group of dealers to do so.

6. (j) COMPLIANCE WITH LAWS, RULES AND REGULATIONS. The Dealer shall comply with all applicable federal, state, and local laws, rules and regulations in the ordering, sale and service of COMPANY PRODUCTS and the sale and service of used vehicles, including without limitation those related to motor vehicle safety, emissions control and customer service. The Company shall provide the Dealer, and the Dealer shall provide the Company, such information and assistance as may be reasonably requested by the other in connection with the performance of obligations under such laws, rules and regulations.

TERMINATION OR NONRENEWAL OF AGREEMENT

17. (b) BY COMPANY DUE TO EVENTS CONTROLLED BY DEALER. The following
represent events which are substantially within the control of the Dealer and over which the Company has no control, and which are so contrary to the intent and purpose of this agreement as to warrant its termination or nonrenewal:

(5) The Dealer shall have engaged, after written warning by the Company, in any advertising or business practice contrary to the provisions of subparagraph 6(i) of this agreement.

Just to tie this together with all of my other posts, or rants, whatever floats your boat. I’m not an attorney. I believe that false and deceptive trade practices are probably prohibited by state and federal statutes. A dealership that takes the advertised price (MSRP) on any vehicle whatsoever and sticks a market adjustment on it may be violating those laws.

Ford may have a duty to terminate those franchises they just warned, or risk being seen as a part of the conspiracy to violate state and federal law. With all of the market adjustments out there, I don’t see any way this doesn’t end up in a courtroom some day but again not an attorney. And I sort of think an illegal, or unconscionable act could void every contract a dealership may use to limit legal liability, sales agreement, arbitration clauses, lease agreements, finance agreements, etc. but again not an attorney.

 

[Burch20]

They may actually be allowed if you finance through Ford. I know some types of home loans require you to hold the loan for 1 - 3 years.

 

[DesertMaverick]

Wish they would do that for Mavs.

I totally agree. Very tired of seeing posts that a purchaser just received their TWO mavericks while the rest of us wait for our ONE maverick. If companies are buying these for their fleet I can understand, but I am very concerned that most of these early purchasers of multiple vehicles are either flippers or dealership employees who have agreed to make an order, then cancel and leave for dealership to mark up and sell on the lot. Hopefully Ford will retaliate against these dealers for future orders.

 

[Sylvester]

When I pay cash, there is nothing they can do about it. When I own the car they have to give me the pink slip and with that I an do whatever I want with the truck.

 

[MLowe05]

It's odd to see people defending this "no resell" provision on this site, especially when they're comparing a GT supercar where Ford "hand picked" the buyers to a mass market F150 with a base price less than 1/10th that of the GT.

I don't think Ford is this stupid. They might sue John Cena to make an example. Are they going to start suing John and Jane Doe from Hometown, USA? I seriously doubt it. Very, very bad PR.

 

[DarkStormy]

You cant put anything into a contract and have it enforceable if it is unreasonable.

If Ford is going to offer to buy the car back from me if I dont want it, then I can see it being reasonable. But if my life circumstances change and I can no longer afford the vehicle but cant sell it, then they can go fuck themselves to be honest.

There not going to have to buy it back from you, because they won't sell it to you unless you sign the contract. If you sign the contract then you have made a legal agreement with them.

I'm not saying I agree with it, but if you sign the contract it's pretty much binding.

 

[Dechion]

While I am not really a fan of Ford (or anyone I am not married to) telling me what I cannot do with something I own I understand the logic behind it from Fords standpoint.

Looking at this strictly from a "how does this effect me in my Maverick purchase" point of view it is pretty positive.

Since I don't have any plans on getting an F150 Lightning the resale prohibition doesn't apply to me with the Maverick I have on order. Even if I did plan to get one I would know going in that I couldn't resell for a year.

On the other hand sections H and I of paragraph 6 that talk about dealers using bait and switch tactics to add markups to customer orders after the order is placed seem to me to protect me against that practice, or at least give me a leg to stand on if a dealership tried it and I ended up calling Ford.

If I read it right it also requires dealers to participate in programs, which would help out all those folks using one plan or another to get a better price, myself included since I intend to use Xplan.

It also means that Ford corporate is paying attention to what's going on in the marketplace, especially with hard to find vehicles, and attempting to do something to counteract it.

 

[DarkStormy]

When I pay cash, there is nothing they can do about it. When I own the car they have to give me the pink slip and with that I an do whatever I want with the truck.

Cash, check, or loan doesn't matter, if they won't sell it to you without your signing the agreement.
and once you sign the agreement, it's binding in a court of law.

 

[Old Ranchero]

Just to tie this together with all of my other posts, or rants, whatever floats your boat. I’m not an attorney. I believe that false and deceptive trade practices are probably prohibited by state and federal statutes. A dealership that takes the advertised price (MSRP) on any vehicle whatsoever and sticks a market adjustment on it may be violating those laws.

Ford may have a duty to terminate those franchises they just warned, or risk being seen as a part of the conspiracy to violate state and federal law. With all of the market adjustments out there, I don’t see any way this doesn’t end up in a courtroom some day but again not an attorney. And I sort of think an illegal, or unconscionable act could void every contract a dealership may use to limit legal liability, sales agreement, arbitration clauses, lease agreements, finance agreements, etc. but again not an attorney.

couple thoughts here FWIW: to the 1st bolded sentence: the key to this is a person simply does not have to buy any vehicle with a price they think is unfair for any reason. Simple, cut and dried- a business can list any price that they want, buyers have the freedom of choice and power to not get ripped off. I don't think we'd be happier if the government told us the price we HAD TO pay?

to the 2nd bolded sentence: I doubt it: Do you know the ADM on a gallon of milk you buy? Is the exact same gallon the same exact price at each store in your city? How about the same gallon in the next state over, or across the country? Market adjustments are for exactly that: different market conditions. Home developers build subdivisions of cookie cutter homes in different states, yet the prices vary widely based on the market (same house costs more in richer states, less in poorer states). It cuts across all industries and all businesses.

IMO, the rub here is twofold: 1) is we have too much information available at our fingertips and believe the information gives us "rights" to go along with expectations. 2) there is a certain segment of the population conditioned to believe at their core that anything "BIG" is evil and dishonest and "greedy" by their nature. Auto dealers and companies fall into this category along with BIG Tobacco, BIG Pharma, BIG AG, BIG box stores, etc.

The easy way out of this is for dealerships to simply not list the ADM as a line item like waving a red cape in front of a bull but bury or disguise it better, and/or use the 1 price no haggle policy across the board. I bought a car using COSTCO internet sales before and they gave me my 1 and only final price over the internet. Similar cars were all over the place price wise around town and I had no clue if there were mark ups (or mark downs) on any of them- I only had to evaluate if the non-negotiable price given to ME was fair and within my set budget for purchase at the time.

 

[MattIngram]

couple thoughts here FWIW: to the 1st bolded sentence: the key to this is a person simply does not have to buy any vehicle with a price they think is unfair for any reason. Simple, cut and dried- a business can list any price that they want, buyers have the freedom of choice and power to not get ripped off. I don't think we'd be happier if the government told us the price we HAD TO pay?

to the 2nd bolded sentence: I doubt it: Do you know the ADM on a gallon of milk you buy? Is the exact same gallon the same exact price at each store in your city? How about the same gallon in the next state over, or across the country? Market adjustments are for exactly that: different market conditions. Home developers build subdivisions of cookie cutter homes in different states, yet the prices vary widely based on the market (same house costs more in richer states, less in poorer states). It cuts across all industries and all businesses.

IMO, the rub here is twofold: 1) is we have too much information available at our fingertips and believe the information gives us "rights" to go along with expectations. 2) there is a certain segment of the population conditioned to believe at their core that anything "BIG" is evil and dishonest and "greedy" by their nature. Auto dealers and companies fall into this category along with BIG Tobacco, BIG Pharma, BIG AG, BIG box stores, etc.

The easy way out of this is for dealerships to simply not list the ADM as a line item like waving a red cape in front of a bull but bury or disguise it better, and/or use the 1 price no haggle policy across the board. I bought a car using COSTCO internet sales before and they gave me my 1 and only final price over the internet. Similar cars were all over the place price wise around town and I had no clue if there were mark ups (or mark downs) on any of them- I only had to evaluate if the non-negotiable price given to ME was fair and within my set budget for purchase at the time.

Not sure that I’m following. Should we stop locking up drug dealers for breaking narcotics laws? The question is Ford and dealerships breaking state and federal laws by advertising the price (MSRP) knowing they have no intention of selling the vehicle, at that price? One state attorney general issued an advisory suggesting, yes that may be a violation of state statute and provided which ones. Why are those silly MSRP stickers required to be placed on new vehicle windows any way? Where is the ADM field on the online pricing calculator, or disclosure for that matter? Where is the dealer market adjustment in the signed order preview? How many marketing flyers were handed out to the press and news stories touting a sub $20k msrp?

 

[Old Ranchero]

Not sure that I’m following. Should we stop locking up drug dealers for breaking narcotics laws? The question is Ford and dealerships breaking state and federal laws by advertising the price (MSRP) knowing they have no intention of selling the vehicle, at that price? One state attorney general issued an advisory suggesting, yes that may be a violation of state statute and provided which ones. Why are those silly MSRP stickers required to be placed on new vehicle windows any way? Where is the ADM field on the online pricing calculator, or disclosure for that matter?

the key is CHOICE. The BUYER has a choice to buy or not. You may not like it if seller wants to change the terms after the fact, but if they do, you DON'T have to buy it. Deceptive practices or bait & switch? How do you KNOW what is going on in the other person's mind and prove INTENT (to defraud)? IMO, Requiring a separate ADM line is nothing more than "feel good" legislating to make it seem like they are looking out for the little guy and look like they are "doing something" about it.

 

[MattIngram]

the key is CHOICE. The BUYER has a choice to buy or not. You may not like it if seller wants to change the terms after the fact, but if they do, you DON'T have to buy it. Deceptive practices or bait & switch? How do you KNOW what is going on in the other person's mind and prove INTENT (to defraud)? IMO, Requiring a separate ADM line is nothing more than "feel good" legislating to make it seem like they are looking out for the little guy and look like they are "doing something" about it.

The key is choice. If I choose to break the law, then law enforcement can choose to lock me up. It’s choice. There’s no disclosure that can walk back the market adjustments, including an ADM line. I’m not an attorney but those are most likely going to the courts in the next few years, which is where they belong.

 

[Eagle11]

Not a lawyer but I think the issue is did Ford present the purchaser with a valid, enforceable contract and did the purchaser sign it without coercion. Otherwise, courts and judges tend to uphold those and punish those who don’t honor their contracts. Ford also refers dealerships to their own counsels to make sure contracts are crafted by subject matter experts on state an local laws, e.g. dealership counsel.

Will Ford run out and get an injunction for every one of those electric F150 sales before they happen, probably not. Will they hire attorneys to troll dmv records and file cases to claw back the money, maybe. Will they ever do that on a low cost maverick, seriously doubt it. They will just crank up production b/c it’s the lower end budget/value vehicle and they intend to make as many as they can sell. Ford probably views the Maverick the same way they did a focus, or an ecosport, entry level.

So if I purchase a Lighting with cash, can a manufacture still control what happens with that truck or car? This is what the courts will have to determine.

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