Ford Unveils New Dealership Design and Sales & Service Experience

[icegradner]

Just to clarify, did they place an order or buy off the lot?

If they ordered, the dealer should not have charged them over MSRP.

The policy might have changed since we ordered our BS Badlands in Dec. 2021. At that time anyway, Ford dealers were not supposed to charge over MSRP, and there was a $1,000 rebate that was an incentive to order.

In 2022-2023 a lot of people here walked away from Mavericks because dealerships would not back down on $5k-15k markups. It was sad hearing all the stories of people. Many of them were custom orders. A forum search quickly brings up a bunch of them from that time period.

Sponsored

 

[sajohnson]

In 2022-2023 a lot of people here walked away from Mavericks because dealerships would not back down on $5k-15k markups. It was sad hearing all the stories of people. Many of them were custom orders. A forum search quickly brings up a bunch of them from that time period.

I'm surprised the dealers got/get away with that. It seems like a clear case of fraud. I'm guessing the language in an agreement customers sign when ordering allows the dealers to claim customer ordered vehicles as their own.

I will say that dealers should be free to charge what the market will bear for vehicles that are on their lot. It sucks to be the prospective buyer when it's a sellers' market. I've been in that situation in the past -- going to the dealer and being hit with $5,000 ADM. It should be obvious from my posts that I have a very low opinion of dealerships in general. I rarely defend their behavior, but if they can get people to give them $5K to $15K above MSRP, that's the free market at work. Most of us would do the same if we had a popular car to sell -- try to get the maximum amount possible.

Holding customer ordered vehicles for 'ransom' is clearly wrong though.

 

[icegradner]

I'm surprised the dealers got/get away with that. It seems like a clear case of fraud. I'm guessing the language in an agreement customers sign when ordering allows the dealers to claim customer ordered vehicles as their own.

The thing most people don't get is that dealerships* buy the vehicle from Ford, then you buy it from the dealership. Typical middle man stuff, but in this case mandated by law. The customer does not own the vehicle at any time before they sign and pay for the deal, custom order or not.

*All dealerships are independent businesses, and are not owned by vehicle manufactures.

 

[sajohnson]

The thing most people don't get is that dealerships* buy the vehicle from Ford, then you buy it from the dealership. Typical middle man stuff, but in this case mandated by law. The customer does not own the vehicle at any time before they sign and pay for the deal, custom order or not.

*All dealerships are independent businesses, and are not owned by vehicle manufactures.

That sounds right.

I can't recall the details but there is something the buyer can do when ordering to prevent 'carnapping' by the dealer. The dealer does not have to agree, but if they do then they cannot keep the vehicle, and must sell it for the agreed upon price -- like an ethical business should operate.

Of course, customers should not have to do that. If they order a vehicle for a specified price, they should not have to worry about the dealer snagging it and demanding more money.

No other business operates that way. If a product is not in stock and the customer orders it, the price will be as stated.

Car dealers have a lot of clout with state politicians, so they have extra 'protection.'

 

[icegradner]

That sounds right.

I can't recall the details but there is something the buyer can do when ordering to prevent 'carnapping' by the dealer. The dealer does not have to agree, but if they do then they cannot keep the vehicle, and must sell it for the agreed upon price -- like an ethical business should operate.

Of course, customers should not have to do that. If they order a vehicle for a specified price, they should not have to worry about the dealer snagging it and demanding more money.

No other business operates that way. If a product is not in stock and the customer orders it, the price will be as stated.

Car dealers have a lot of clout with state politicians, so they have extra 'protection.'

Completely agree, the stuff that some dealerships, and other commission based sales operations get away with are not right. A lot of it comes down to is, does the local government enforce the laws that are on the books, or not. I think vehicle dealerships stand out in peoples mind, vs some other similar operations is that vehicle's aren't snap decision purchase for most people. When you get burned on a $30k-100k vehicle that stands out a little more than if you got cheated on a $1500 couch at someplace like Lazyboy.

 

[BLUEOVALRACER]

I agree with most here. I don't care about the showroom. Typically, when I buy a car, I have done my research having worked in the financial industry more than 30 years before I retired. Locally, I'm they guy who was at the bank giving dealers the rates and terms for the loans they make to customers so I am very familiar with every aspect of where they make money.

Most recently when I went to purchase my Maverick, I tried a different tactic. I simply stated what I said here to the young salesman I met and I had an existing offer for my trade-in from Carmax. I also knew the retail sales numbers locally for my trade-in (2016 Tacoma, 59K miles, added options 4WD, towing etc.) Always negotiate for the out-the-door price, i.e. "Will you be trading in? Will you be financing? Me: Maybe. Let's see what you can come up with for a price."

The long and short of it? He was great. Got the price I wanted. Did a trade in, albeit slightly below what I had been offered from Carmax after countering him with that offer. ( He bumped up their price.) I paid cash for the balance which dealerships hate. (They miss participation in the loan and typically a spiff payment) He was friendly and no BS. Very refreshing. Wish I could say that about every car-buying experience. ( In the past, I have literally gotten up and walked out)

On the Maverick I have now and the BS BB before the Maverick and the F-150 before the BS BB I talked to the salesman that i got my last 4 vehicles from at the same dealership. I called Him the day before all 4 times made the deal and picked them all up the next day and was out of the dealership within 1 hour on all 4 vehicles.

 

[dochawk]

Also, Granger was selling the BS for some crazy low price, like $3,000 under MSRP. I wonder why that made sense for them?

granger's whole model is fascinating, but not unique.

Happy customers = more business.

Even if you simply break even, making someone happy means a quantifiable number of future customers. As an attorney, there were some simple things I did for nothing or close to nothing that really saved people's bacon, and they raved to their friends who hired me.

The markup on an ESP for a dealer is close to 100% if they sell at MSRP. It seems to me that I calculated the granger charged me about 55% of MSRP.

The thing is, it doesn't take granger anywhere close to an hour of labor to process one of these, so they're not losing money at $25 over cost.

They'll never get rich on those, but it gives them multiple forums full of happy and grateful people who will remember to check with them next time they order a vehicle.

And when they sell ordered vehicles at 3-7% under invoices, they're again not making all that much, but between holdbacks (which increase with volume) and their relatively small doc fee [1], they're covering costs with a bit to spare.

The big profit (and good for them!) comes from the fact that not everyone follows through and picks up their vehicles. While deposits are often refundable (by law in many states), Granger's is not. So they pick up the $500, and have a vehicle in inventory.

And that is where they really come out well. Dealers finance their inventory as they own it. As you look at the millions of dollars of inventory on the lot, there is a massive loan backing it with a security interest in the entire inventory.

But there's a difference between dealer ordered inventory and customer orders. Dealer orders are financed from the get go; the dealer has skin in the game, whether commitment or partial interest, from the moment they hit the submit key. This is a significant cost. But when a customer orders and doesn't pick up, the dealer isn't on the hook until the customer turns it down (or some fixed number of days after arrival. So for all intents and purposes, vehicles are "appearing" in inventory without any financial commitment or cost to Granger until they appear. From another angle, they get a vehicle for which someone else paid much of the cost!

So when someone places one of those orders, possibly because he thought to check with him over that warranty on the last vehicle, they either make a little bit without having to commit resources, or get a regular vehicle in inventory that they've already made some money on--again, without having committed resources!

Granger sells from inventory at fairly normal dealer prices (although they've seemed quite competitive when I've looked), but these orders mean they're paying less on average to have inventory than other dealers.

They make money, we get our toys for less, and everyone is happy.

[well, almost. There was that woman a year or so ago calling them crooks because they wouldn't sell inventory at the same price as orders, and have {at least she claimed} a fee for out of state buyers. But you can't keep everyone happy.]

OK, so I'm an economics professor. We're fascinated by such things, and the pricing of electricity in Lubbock, TX, due to it's competing electric grids, and how the price slowly increases with distance from the from the last area served by the other grid. And strippers, but not for the usual reason: it's the only market we know where the wage regularly flips between positive and negative, as they're paid to be there during slower periods, but pay for floor time during peak.

 

[dochawk]

I'm surprised the dealers got/get away with that.

switching to my attorney hat, I think that in many cases, the custom order with a price on it could be an enforceable contract. But someone will have to litigate it. (and maybe that's already happened, and been won or lost, that I'm not aware of)

 

[sajohnson]

switching to my attorney hat, I think that in many cases, the custom order with a price on it could be an enforceable contract. But someone will have to litigate it. (and maybe that's already happened, and been won or lost, that I'm not aware of)

That's what I was trying to remember. A custom order with a price on it, signed by the dealership principal.

People were posting as if it had been litigated and was established precedent, at least in many states. I haven't confirmed that though.

 

[sajohnson]

granger's whole model is fascinating, but not unique.

Happy customers = more business.

Even if you simply break even, making someone happy means a quantifiable number of future customers. As an attorney, there were some simple things I did for nothing or close to nothing that really saved people's bacon, and they raved to their friends who hired me.

The markup on an ESP for a dealer is close to 100% if they sell at MSRP. It seems to me that I calculated the granger charged me about 55% of MSRP.

The thing is, it doesn't take granger anywhere close to an hour of labor to process one of these, so they're not losing money at $25 over cost.

They'll never get rich on those, but it gives them multiple forums full of happy and grateful people who will remember to check with them next time they order a vehicle.

And when they sell ordered vehicles at 3-7% under invoices, they're again not making all that much, but between holdbacks (which increase with volume) and their relatively small doc fee [1], they're covering costs with a bit to spare.

The big profit (and good for them!) comes from the fact that not everyone follows through and picks up their vehicles. While deposits are often refundable (by law in many states), Granger's is not. So they pick up the $500, and have a vehicle in inventory.

And that is where they really come out well. Dealers finance their inventory as they own it. As you look at the millions of dollars of inventory on the lot, there is a massive loan backing it with a security interest in the entire inventory.

But there's a difference between dealer ordered inventory and customer orders. Dealer orders are financed from the get go; the dealer has skin in the game, whether commitment or partial interest, from the moment they hit the submit key. This is a significant cost. But when a customer orders and doesn't pick up, the dealer isn't on the hook until the customer turns it down (or some fixed number of days after arrival. So for all intents and purposes, vehicles are "appearing" in inventory without any financial commitment or cost to Granger until they appear. From another angle, they get a vehicle for which someone else paid much of the cost!

So when someone places one of those orders, possibly because he thought to check with him over that warranty on the last vehicle, they either make a little bit without having to commit resources, or get a regular vehicle in inventory that they've already made some money on--again, without having committed resources!

Granger sells from inventory at fairly normal dealer prices (although they've seemed quite competitive when I've looked), but these orders mean they're paying less on average to have inventory than other dealers.

They make money, we get our toys for less, and everyone is happy.

[well, almost. There was that woman a year or so ago calling them crooks because they wouldn't sell inventory at the same price as orders, and have {at least she claimed} a fee for out of state buyers. But you can't keep everyone happy.]

OK, so I'm an economics professor. We're fascinated by such things, and the pricing of electricity in Lubbock, TX, due to it's competing electric grids, and how the price slowly increases with distance from the from the last area served by the other grid. And strippers, but not for the usual reason: it's the only market we know where the wage regularly flips between positive and negative, as they're paid to be there during slower periods, but pay for floor time during peak.

A very clearly worded, comprehensive explanation -- thank you. One might assume you did work for a car dealership at some point.

We live in Maryland, but have family in Iowa, some near Granger. We were considering buying from them but I've had such horrible experiences when getting warranty service done at dealers that did not sell the vehicle, that we decided to buy locally (6 miles from our house). I had purchased my 2002 WRX from them (they're both Subaru and Ford) and it was a decent experience, so I naively thought the BS Badlands deal would be as well. Wrong.

The gross savings if purchasing from Granger would have been ~$3,500 (IIRC, which is not always the case) though after accounting for the operating costs of driving our View (RV) 2,000 miles r/t, and the Badlands 1,000 miles (not to mention our time, marginal risk, etc.) the savings dropped to ~$1,700 or less. We decided that it was worth giving up the $1,700 to avoid potential attitude problems and temper tantrums from our local dealer.

In hindsight, I wish we'd bought from Granger. The sales process at the local dealer was stereotypically horrible, and we ended up having zero warranty issues with the Badlands (just the charging system/battery recalls). Oh well.

 

[dochawk]

One might assume you did work for a car dealership at some point.

Actually, it's the mix of being both a lawyer and an economics professor.

In hindsight, I wish we'd bought from Granger. The sales process at the local dealer was stereotypically horrible,

If I had it to do again, I'd have bought from granger.

I walked up to the desk at my local dealer with their quote in hand, and announced that I was ordering this truck today, and that if they could match it, I'd buy it there. They gave me a seat, and after a couple of meetings in the distance, they agreed.

All was good until they sandbagged me with the arbitration agreement when I went to pick it up. I probably would have agreed to it if it had been mentioned in advance, rather than that they were backing out if I didn't agree to this material change in terms.

I ended up signing it, while telling them that it was the last vehicle they would ever sell me. (and there's either a powerboost F-150 or dodge plugin half ton [whatever they're calling it this week] in my immediate future.)

But it was for my wife, whose heart was set on it, so I choked down the bile and signed.

If it had been for me, I would have walked--and probably filed a complaint for "specific performance" and gotten a TRO preventing it from selling it when court opened Monday morning. (either that, or ordered from granger and waited some more months)

 

[MikeS1942]

I have no beef with the aesthetics (which will take a decade or more to roll out, and even then, probably only at larger metro dealerships). So this is nice, but ultimately what people remember is how they were treated, how they got along with the sales/F&I people, and how they felt about the OTD cost. Having a coffee bar and free snacks is cool, but not at all unique.

I bought an Acura 10+ years ago in an aged, very unspectacular dealership (it's not even there anymore), but what I remember more than anything is that the internet sales guy gave me the price that I wanted, and the F&I guy didn't upsell me on a single thing. In fact, since we were there late in the evening, he recommended an ethnic place to go eat at, and a decade later, we still go there for a good meal.

TL;DR don't tell me you're changing the culture, Ford. Show me.

I bought my first Ford product in 1995 from a mom and pop small town dealer. They had a great reputation in our area, and people were treated really well. Five purchases later 2011, Ford moved them into a huge fancy schmancy garage and show room, and their whole vibe left with the old garage/showroom. Many folks who I knew, who had dealt with them long before I started dealing with them, were noticing and saying the same as I was. I don't get too impressed with fancy stores and showrooms, it's how I'm being treated by the folks in the building.

 

[sajohnson]

Actually, it's the mix of being both a lawyer and an economics professor.



If I had it to do again, I'd have bought from granger.

I walked up to the desk at my local dealer with their quote in hand, and announced that I was ordering this truck today, and that if they could match it, I'd buy it there. They gave me a seat, and after a couple of meetings in the distance, they agreed.

All was good until they sandbagged me with the arbitration agreement when I went to pick it up. I probably would have agreed to it if it had been mentioned in advance, rather than that they were backing out if I didn't agree to this material change in terms.

I ended up signing it, while telling them that it was the last vehicle they would ever sell me. (and there's either a powerboost F-150 or dodge plugin half ton [whatever they're calling it this week] in my immediate future.)

But it was for my wife, whose heart was set on it, so I choked down the bile and signed.

If it had been for me, I would have walked--and probably filed a complaint for "specific performance" and gotten a TRO preventing it from selling it when court opened Monday morning. (either that, or ordered from granger and waited some more months)

I had a similar experience when buying a car decades ago. There was a company called United Buying Service (UBS) that would establish fixed prices for vehicles and options. Their prices were generally good, but they worked with a limited number of dealerships -- none of them nearby. So I'd get their quote and take it to local dealers. I spoke with the son of the owner of a dealership over the phone and he agreed to match the UBS price. When I got there, everything was going smoothly. We were almost done with the paperwork when he demanded that I purchase an extended warranty. Surprise! I told him that I never buy extended warranties, and that it was not part of our agreement. He wouldn't budge, so I walked. I was amazed that he was willing to lose the sale over that.

Like your experience, the BS Badlands was for my wife. She was really excited about it (and still is, 3-1/2 years later) so I let a lot of stuff slide, rather than disappoint her:

1) The salesman told us that we were responsible for any price increases between the order date and delivery (and they ultimately added up to over $1,100). Of course that's false and he knew it. Ford has 'price protection.' He was hoping to charge us for the increases and pocket that money.

2) When ordering, my wife wanted the fender flares. I thought they were expensive at $500 (for 4 pieces of plastic) but I didn't argue. At least the price included installation (according to Ford). Then he tried to tell us the price did NOT include installation! He said he'd have to check with their body shop. I humored him. He came back with a labor cost of $300 -- but that was not even a firm price! He said it might be more! We told him to remove the flares from the order. He acted very hurt/confused...

3) When picking up the Badlands, we were told that the $1,000 rebate (for ordering) did not apply to the BS! He actually had a fake web page open that he claimed showed the vehicles that were covered (the big Bronco was listed but not the BS). I actually had to find the offer online and show it to them before they would apply the $1,000 credit!

4) They (salesman and finance guy) pulled the hard sell on the extended warranty. "This vehicle is actually a POS. It will have multiple problems. The rear camera alone costs $800..." I told them that a) we'd both been driving without cameras since the 1970s, so we either wouldn't fix it, or, as a technician, I'd repair it myself. At that point they gave up.

I'm surprised your local dealer matched Granger's quote. I'd think they'd point out that it's a long drive from Vegas to Des Moines.

 

[dochawk]

When ordering, my wife wanted the fender flares. I thought they were expensive at $500 (for 4 pieces of plastic) but I didn't argue.

my shock was her wanting the sunroof. Uhm, the gal that insists on putting her window up when in my convertibles?

But I ordered it.

I don't think she's used it, but if find that opening it and the rear window (power, lariat) get's me halfway to convertible.

I'm surprised your local dealer matched Granger's quote.

So was I!

I was really just trying to make my effort to buy local. I wasn't expecting it to work! (I was, though, looking forward to showing it to the sales droid at the next shop, who in a single sentence lied to me three times [1) that hybrids were going for $5k over invoice, 2) that there were none in town, and 3) that it was still a year to order one].

I was looking forward to the side road trip--once I went to Des Moines, my grandkids were in the next state (Ohio). It would have been an extra visit (normally twice a year).

 

[dbbii]

When I got my Maverick, I needed a vehicle now due to an accident. Have mostly always bought Fords because my FIL was a Ford Union employee, so we got (I think) A Plan pricing. Since he's gone, can't get it anymore. Anyway, go to local Ford dealer. Not totally impressed with what they had on the lot. Looked at Rangers and Mavericks. I could pay cash and I knew what my bank would charge for a loan. Couldn't get a straight answer from the dealer, as in "how much is the vehicle". So, I left. Went home and started looking on line. Found a Maverick at CarMax with 3k miles. Drove over to see it. No salesman hanging over me. Said price is on the vehicle. It was. Went back in. Gave me tax, tag,title (OTD) price Gave me payment options, based on certain down payments. They actually beat my bank's interest by 1/4%. Told them what I wanted. They said come back the next day to get the vehicle.

Sponsored