Ford Dealership "Scalping"

[wanderingfool2]

In the world of legalized monopoly otherwise known as "car dealerships", I introduce to you Ford scalping.

 

The F150 Lightning is oversold, and dealerships took deposits to get your name in the hat...only thing is now that they have enough demand and very very limited supplies they are starting to demand more money to bump your way up the line or even to stay in the line.

 

An extreme example being a dealership that is apparently charging $30,000 over MSRP and requiring another $5000 deposit to get the first 25 lightnings they get.  If you are willing to wait longer, they are "only" demanding an extra $10000 above MSRP.  The email from the dealership to those who had already pre-ordered can be seen here

There are other leaked emails also going around where the dealership is using tactics like agree to a $5000 increase and be within the first 10% of people to do so to get your truck...if you don't want to pay extra, then we will cancel your order

 

[dilpickle]

1. This isn't scalping.

2. This has happened with limited cars since forever.

[dizmo]

Not scalping. I suggest you look up what MSRP stands for. There's an important word in there that's often overlooked.

Deposits for allotment is nothing new, either.

There are literally hundreds of models of cars this happens to. Supply and demand. It's a thing.

[Arika]

I'm rapidly learning that no-one on this forum understands what scalping is....

[Levent]

39 minutes ago, wanderingfool2 said:

have enough demand and very very limited supplies

hence why this is not scalping.

[Spotty]

Firstly, as others have pointed out, this is not scalping.

If people have put a deposit down then they've likely signed a contract and agreed upon the price. For Ford dealerships to then later change the sales price and demand more money from people who have already ordered the car and paid a deposit the Ford dealerships would be in breach of contract. Unfortunately all this really means is that they would be required to terminate the contract and return the deposit, which I'm sure the dealerships would be happy for people to do as there's probably enough people willing to pay the higher price they don't care about losing those customers. All you can really do is take your money to a different dealership that isn't doing that sort of thing or better yet a different manufacturer.

[Rocketdog2112]

Harley Davidson used this same tactic for years. Yet people were fool enough to play along to achieve that piece of status symbol...

 

"Saving the planet" ain't going to come cheap, but many are profiting from it.

[OhioYJ]

In that reddit thread it looks like that dealer already walked that back, apparently the backlash was pretty quick. Image of second email, link taken from that thread.

[wanderingfool2]

7 hours ago, dilpickle said:

1. This isn't scalping.

2. This has happened with limited cars since forever.

1.  There is a reason why I put the word "scalping" in quotes.  This is literally people who put a deposit down, to purchase a vehicle at a certain price and upon the dealership realizing how much people want it invalidating the deposits, demanding more money (in this case and extra 50% above MSRP).

2.  That's sort of a point though, that dealerships essentially have a monopoly and can do pretty much anything they want.  Take Tesla as a counter example.  If you put a deposit/order down at the listed MSRP, it doesn't matter if the price increases they don't demand more money.

 

6 hours ago, Spotty said:

Firstly, as others have pointed out, this is not scalping.

If people have put a deposit down then they've likely signed a contract and agreed upon the price. For Ford dealerships to then later change the sales price and demand more money from people who have already ordered the car and paid a deposit the Ford dealerships would be in breach of contract. Unfortunately all this really means is that they would be required to terminate the contract and return the deposit, which I'm sure the dealerships would be happy for people to do as there's probably enough people willing to pay the higher price they don't care about losing those customers. All you can really do is take your money to a different dealership that isn't doing that sort of thing or better yet a different manufacturer.

While not strictly scalping, it really does fall into situations...thus the quotes in the topic title.  Ford Dealerships wouldn't be in breach of contracts, because they pretty much make it so they can cancel your deposit at anytime without penalty (because they have the power).  The other problem being that in some places you literally only are allowed a certain # of dealerships (and the cases where Ford is banned from selling direct to customers).

 

At a certain point these kinds of activities do need to be considered scalping.  They are effectively cancelling orders in order to resell at in some cases 50% above MSRP; their costs didn't increase, they just saw that they could so they did.

[HM-2]

22 hours ago, wanderingfool2 said:

1.  There is a reason why I put the word "scalping" in quotes.  This is literally people who put a deposit down, to purchase a vehicle at a certain price and upon the dealership realizing how much people want it invalidating the deposits, demanding more money (in this case and extra 50% above MSRP).

For the most part, this isn't the case. Typically, the contract you'll sign as part of putting a deposit down to get a build slot for a new-to-market model will have a clause which allows the manufacturer to massively hike the price (amongst other things such as changing specifications and even available engines), and give you the option of cancelling if you aren't happy with these changes.

 

22 hours ago, wanderingfool2 said:

They are effectively cancelling orders

I mean, they aren't though. They're just prioritising the orders of people who are willing to pay more.

[wanderingfool2]

1 hour ago, HM-2 said:

I mean, they aren't though. They're just prioritising the orders of people who are willing to pay more.

They literally are asking $30k (75% higher than MSRP for base model) to prioritize an order and $5k(12% higher than MSRP) to keep the order

 

1 hour ago, HM-2 said:

For the most part, this isn't the case. Typically, the contract you'll sign as part of putting a deposit down to get a build slot for a new-to-market model will have a clause which allows the manufacturer to massively hike the price (amongst other things such as changing specifications and even available engines), and give you the option of cancelling if you aren't happy with these changes.

The big thing is that cost to dealership hasn't changed at all.  They are literally gouging because it's a popular vehicle.  It would be akin to Best Buy selling PS5's at $800 after you preordered it for $499.  They are able to write in options that give them full power, which is a major issue...that's why I am saying it's pretty much "scalping" (while not strictly scalping, they have through lobbying made it so they are the only ones who can buy from Ford, and when demand is high they kick people out of the queue unless they agree to pay unreasonable prices.

[Spotty]

30 minutes ago, wanderingfool2 said:

They literally are asking $30k (75% higher than MSRP for base model) to prioritize an order and $5k(12% higher than MSRP) to keep the order

Nobody is saying it's not a shitty thing for the dealership to do. People who had paid a deposit to that dealership should cancel their order and take their money to a different dealership. Don't pre-order a car.

[BuckGup]

On 12/28/2021 at 2:46 AM, Arika S said:

I'm rapidly learning that no-one on this forum understands what scalping is....

Probably because it doesn't exist in this scenario and is basic economics entitled gamers don't understand because they are REQUIRED to have luxury items.

[wanderingfool2]

On 12/29/2021 at 8:17 AM, Spotty said:

Nobody is saying it's not a shitty thing for the dealership to do. People who had paid a deposit to that dealership should cancel their order and take their money to a different dealership. Don't pre-order a car.

The amount they are hiking it by though and the justification for the hike is the reason why I would put it into the realm of scalping though...because really at this point what they are doing is not really different than scalpers (except that instead of using bots to buy the products, they have used laws to block others).

 

The reason why you pre-order a vehicle is that you get priority, and a place in the queue.  For a vehicle that will be sold out for potentially a few years, that is a good reason why you would pre-order.  The other issue being that you don't really have as much of an option in some places in the US...specifically some of the dealerships have lobbied for laws that means the next closes dealership is a considerable distance away.

[SiRcivic27]

My local dealer group has a “no over MSRP” policy. Because of this they normally sell a lot of cars out of state. When I called about the GT4 RS they were already sold through their allotment and I was told they haven’t sold a vehicle outside of the state in over a year due to wanting to service local customers first. My dad wanted to buy a new car recently and I told him not to just for this reason. He visited the dealer and called me to tell me I was right. 

Also did you see this? https://insideevs.com/news/557827/mercedes-eqs-50000usd-dealer-markup/ 

[Jtalk4456]

5 hours ago, wanderingfool2 said:

1. The amount they are hiking it by though and the justification for the hike is the reason why I would put it into the realm of scalping though

2. For a vehicle that will be sold out for potentially a few years, that is a good reason why you would pre-order.

3. The other issue being that you don't really have as much of an option in some places in the US...specifically some of the dealerships have lobbied for laws that means the next closes dealership is a considerable distance away.

1. but that describes hiking as you said. the amount of the price hike has nothing to do with it being scalped or not. All that's happened here is a price increase in high demand. Sucks, but it has no relation to scalping

2. There is no good reason to preorder a vehicle in my opinion. It's just silly

3. I don't know if this is a thing in very specific places maybe, but I drive down the street and different dealerships are very close together. And I'm not talking hendrick nissan beside hendrick ford. I'm talking different dealer brands. in some areas, I've seen half a dozen or more within a minute of each other. There's places I can think of right now I could consider a dealer strip mall...

[wanderingfool2]

4 hours ago, Jtalk4456 said:

1. but that describes hiking as you said. the amount of the price hike has nothing to do with it being scalped or not. All that's happened here is a price increase in high demand. Sucks, but it has no relation to scalping

2. There is no good reason to preorder a vehicle in my opinion. It's just silly

3. I don't know if this is a thing in very specific places maybe, but I drive down the street and different dealerships are very close together. And I'm not talking hendrick nissan beside hendrick ford. I'm talking different dealer brands. in some areas, I've seen half a dozen or more within a minute of each other. There's places I can think of right now I could consider a dealer strip mall...

3. Depends on the municipality and state

1. A similar thing could be said about scalping.  There was high demand so the people who bought the tickets/products to "scalp" are just increasing price because of an increase in demand.  (Also see my point nearby the bottom of this post...I think it pretty much matches the dictionary defition)

2. Again, if you were wanting a new vehicle that is to be released it might be the only way to get your hands on the vehicle (without waiting potentially years)

 

On 12/28/2021 at 12:54 AM, Levent said:

hence why this is not scalping.

Limited supplies and increasing the pricing isn't scalping?  Under that kind of logic then what people call scalpers isn't scalping.

 

On 12/28/2021 at 12:38 AM, dizmo said:

There are literally hundreds of models of cars this happens to. Supply and demand. It's a thing.

Supply and demand is a thing, but I could say the same thing about ticket scalpers.  It's "supply and demand" which drives the $100 ticket price to $1000 online.  What makes it scalping is that the dealership's costs aren't increasing, and there are enough that are hiking the prices.

On 12/28/2021 at 12:46 AM, Arika S said:

I'm rapidly learning that no-one on this forum understands what scalping is....

While everyone is harping that it's not scalping, then explain how it doesn't match the definition of scalping?

From the dictionary:

"To resell at a price higher than the established value"

Or from Websters dictionary:

"to resell at greatly increased prices"

 

The established price is what Ford is saying is the MSRP pricing, and given that some of the dealerships are honoring the MSRP pricing then yes, having the price jump by 50% is scalping by definition.  Everyone saying "it's not scalping", explain to me why it's not scalping when it literally is fitting the definition quite well.  Ford isn't allowed selling direct to customers in many cases.

[jones177]

It is called a dealer markup on a new car.

I don't consider it scalping because you get a warranty.

I do consider the buyers foolish and the dealers untrustworthy. 

 

I just bought a 2022 Subaru BRZ at MSRP.  Just a few miles up the road one is for sale at  $10,000 over MSRP. 

I see it as a reason not to visit that dealership when I buy my next car.

 

For cars and GPUs check the manufactures website for pricing and don't pay more.

 

 

[Arika]

5 hours ago, wanderingfool2 said:

While everyone is harping that it's not scalping, then explain how it doesn't match the definition of scalping?

From the dictionary:

"To resell at a price higher than the established value"

Or from Websters dictionary:

"to resell at greatly increased prices"

Bolded the reason why. It's not reselling. If someone bought up all the stock and then immediately tried to sell it for higher than the listed price, yes. But this is straight from the official ford dealer, they're not even a third party distributor, that's not reselling.

[wanderingfool2]

2 hours ago, Arika S said:

Bolded the reason why. It's not reselling. If someone bought up all the stock and then immediately tried to sell it for higher than the listed price, yes. But this is straight from the official ford dealer, they're not even a third party distributor, that's not reselling.

It is effectively reselling (just as a legalized monopoly)

A) Vast majority of dealerships are not owned by Ford, Ford does not really make extra money on dealerships gouging people.

B) Ford has tried selling direct to customers before and were sued (forced to stop)

 

Ford in some cases isn't legally allowed to stop the dealerships from increasing the prices.  The dealerships are getting the vehicle at a fixed price.  It very much is reselling

[wasab]

Scalping is only cool if you are a day trader. 

[Bitter]

The Bronco pre-order price agreement then reversal on it was much more of a scandal. People pre-ordered a Bronco, Ford said they would honor the pricing, Bronco got to dealer, people found their pre-ordered car now had a markup on it above what they'd ordered it for, Ford said 'tough luck buddy'.

https://www.roadandtrack.com/news/a37621749/bronco-customers-are-getting-screwed-by-last-minute-delivery-markups/

 

Now that there is some bullshit. You agree on a price that should be the price, if the dealer wanted more they should have asked for more. This is almost bait and switch but legally is not because reasons.

[dilpickle]

15 hours ago, SiRcivic27 said:

My local dealer group has a “no over MSRP” policy. Because of this they normally sell a lot of cars out of state. When I called about the GT4 RS they were already sold through their allotment and I was told they haven’t sold a vehicle outside of the state in over a year due to wanting to service local customers first. My dad wanted to buy a new car recently and I told him not to just for this reason. He visited the dealer and called me to tell me I was right. 

Also did you see this? https://insideevs.com/news/557827/mercedes-eqs-50000usd-dealer-markup/ 

Even normal Mercedes models are being marked up like crazy right now. The shortage is real. They've actually had to remove standard features like wireless charging and cameras from their latest units.

 

I just went to a Lexus dealer and they proudly declared that they are NOT selling above MSRP. That used to be a given but this is the world we live in now.

[Spotty]

2 hours ago, wanderingfool2 said:

It is effectively reselling (just as a legalized monopoly)

A) Vast majority of dealerships are not owned by Ford, Ford does not really make extra money on dealerships gouging people.

B) Ford has tried selling direct to customers before and were sued (forced to stop)

 

Ford in some cases isn't legally allowed to stop the dealerships from increasing the prices.  The dealerships are getting the vehicle at a fixed price.  It very much is reselling

How is that any different from any retailer selling goods. Go to a 7/11 and buy a can of coke and I bet you'll pay more than what they paid for it from Coca Cola. 

[Blademaster91]

3 hours ago, wanderingfool2 said:

It is effectively reselling (just as a legalized monopoly)

A) Vast majority of dealerships are not owned by Ford, Ford does not really make extra money on dealerships gouging people.

B) Ford has tried selling direct to customers before and were sued (forced to stop)

 

Ford in some cases isn't legally allowed to stop the dealerships from increasing the prices.  The dealerships are getting the vehicle at a fixed price.  It very much is reselling

I can see how this might be seen as scalping, but it's not, it's just a dealership increase because they have to make a profit as well. And I wouldn't consider a car dealer as a reseller, because you get a warranty and usually free scheduled maintenance from the dealer also, if someone bought a bunch of vehicles and sold them on a car auction site then it would be reselling IMO.

But the shortages have affected pretty much every manufacturer and I've seen articles that vehicle manufacturers can't even sell cars and have to let them sit because there aren't enough chips to make the infotainment display, or features the vehicle otherwise would've came with.  Pre ordering a car doesn't seem like a good idea if you have to wait for it, and I'd probably just look for something else or go with the regular ecoboost V6 F150.