ADM and destroyed dealer relationships?

[GordoJay]

ADM's will exist until supply goes up. And that is only because there are always fools that will pay it.

Are they fools, or do they just want it more? If I was suddenly carless, it would be worth a lot to me to get a new car quickly. I'd be willing to pay a premium for it. If dealers never sold above ADM the best I could do is get on some long waiting list. Or pay much more than MSRP for a used car. The ADM is the price you pay for rapid delivery.

The list of non ADM dealers across the country is a short one. The problem isn't finding a non ADM dealer, it's the fact you will be waiting short of forever for your order to come in.

Exactly. You can have it cheap or you can have it soon. Choose one.

Also, sure a dealer may help you out with something non transactional. But don't think that is because of your "relationship". It's because they are prepping you for the next transaction. Know that.

You're much more likely to find this behavior at a dealership that's working hard for market share. It can be a good business practice. Or not. It all depends on the local market.

 

[melvimbe]

Are they fools, or do they just want it more? If I was suddenly carless, it would be worth a lot to me to get a new car quickly. I'd be willing to pay a premium for it. If dealers never sold above ADM the best I could do is get on some long waiting list. Or pay much more than MSRP for a used car. The ADM is the price you pay for rapid delivery.

It's not just of whether your carless or not, but the ratio of your wealth to car price. If you have 300 million in the bank, for example, then you don't sweat over $90k vs $120k. It's no different then if I was deciding between something that cost $9 or $12. A part of me doesn't want to overpay, sure, but ultimately, I don't care.

Exactly. You can have it cheap or you can have it soon. Choose one.

I don't think cheap is even much of an option in the current market. Yes, you could theoretically wait till prices drop, but there is no guarantee that supply will increase and demand increase, not to mention that inflation is always rising.

You're much more likely to find this behavior at a dealership that's working hard for market share. It can be a good business practice. Or not. It all depends on the local market.

There are dealerships now that are realizing that the internet has greatly expanded the size of their market. Ford could shift to a more direct to consumer approach, but the market could also shift where big dealership networks, across multiple states, could start appear that does high volume sales. The allocation process and limited supply is the big deterrent tot this happening now.

As for ADM/MSRP, we've had tons if discussions about it, and I get why people are upset about ADM.. I don't get upset about it, but I'm not paying it either. You could make the argument that Ford might be better off not even publishing an MSRP, as the price is always negotiable anyway. MSRP is just away to market and compare against competitors, and a start off point for price negotiations with the dealer. If MSRP didn't exist, than media would still find away to compare the cost of different vehicles...by what people are actually paying. Likewise, customers would be forced to know what the actual market price of a vehicle is, rather than go by a number the Ford gives you. Pretty much the way used car sales work.

 

[2022 Ruth]

This is capitalism at work!

Dealers are charging this because people will pay it.

Take your money elsewhere.

If you had a 70,000 dollar truck that someone was willing to pay you 100 grand for, would you sell it to them for 100 grand or would you settle on 70 grand since thats what you paid for it?

Just like if the market was flooded with F150s (sometimes it is) and you can go in and get one for 15 grand off. Would you say “no no no. MRSP is what the manufacturer is saying. So I want to pay that. It goes both ways.

 

[GordoJay]

It's not just of whether your carless or not, but the ratio of your wealth to car price. If you have 300 million in the bank, for example, then you don't sweat over $90k vs $120k. It's no different then if I was deciding between something that cost $9 or $12. A part of me doesn't want to overpay, sure, but ultimately, I don't care.

That's a good point. And we are talking about the luxury market, not the work truck F150 market. Nobody needs a Raptor.

I don't think cheap is even much of an option in the current market. Yes, you could theoretically wait till prices drop, but there is no guarantee that supply will increase and demand increase, not to mention that inflation is always rising.

Cheaper, then. One thing that confuses the issue is that we tend to measure the value of things with the dollar. When the dollar itself is changing in value, that's no longer as useful.

As for ADM/MSRP, we've had tons if discussions about it, and I get why people are upset about ADM.. I don't get upset about it, but I'm not paying it either.

Same here. I prefer to have the option of paying it if I'm in dire need, but I've never once paid MSRP, let alone ADM. But then I'm not the cool kid on the block with the latest, greatest, in-demand vehicle either.

You could make the argument that Ford might be better off not even publishing an MSRP, as the price is always negotiable anyway. MSRP is just away to market and compare against competitors, and a start off point for price negotiations with the dealer. If MSRP didn't exist, than media would still find away to compare the cost of different vehicles...by what people are actually paying. Likewise, customers would be forced to know what the actual market price of a vehicle is, rather than go by a number the Ford gives you. Pretty much the way used car sales work.

Good point about MSRP. It's a semi-fictional number.

 

[2022 Ruth]

And honestly… I wouldn’t sweat it. The Gen3 isnt all its cracked up to be. It looks great, but other than that it seems just like my Gen2. Get a used Gen2 if you can, for the right price.

 

[chris51080]

This is capitalism at work!

Not really. Capitalism doesn’t require the dealer allocation model. Capitalism would be me being able to place an order from any Ford dealer of my choosing, and get my truck in roughly the order that it was placed.

This allocation model is closer to crony capitalism, although that implies government collusion which isn’t the case here.

True capitalism wouldn’t require me to purchase my vehicle from a dealer either. I should be able to buy directly from the manufacturer. That is changing, but the dealer model is a holdover from legitimate crony capitalism.

All that said, you’re right about MSRP being a made up number.

In the end, the Raptor is a toy. It’s not a necessity for any of us. My money will be going elsewhere if I don’t get one at sticker. I’m not paying ADM for my raptor, or my GT3. Or anything else for that matter. I simply refuse to play that game. If that means I wait, so be it. If that means I find an alternative vehicle…then that’s how it goes.

 

[chris51080]

And honestly… I wouldn’t sweat it. The Gen3 isnt all its cracked up to be. It looks great, but other than that it seems just like my Gen2. Get a used Gen2 if you can, for the right price.

That’s good to hear, that the Gen 2 is that comparable.
I do like the tech, interior, and overall looks of the Gen 3 better. If Gen 2 prices weren’t so close to Gen3 I’d probably get one. With the used market as crazy as it is right now though, I just can’t justify the Gen 2.

 

[2022 Ruth]

That’s good to hear, that the Gen 2 is that comparable.
I do like the tech, interior, and overall looks of the Gen 3 better. If Gen 2 prices weren’t so close to Gen3 I’d probably get one. With the used market as crazy as it is right now though, I just can’t justify the Gen 2.

Yeah. Thats the issue. Gen 2s still bring good money.

 

[melvimbe]

Cheaper, then. One thing that confuses the issue is that we tend to measure the value of things with the dollar. When the dollar itself is changing in value, that's no longer as useful.

Back when I was teenager and first started to need to buy things with my own money, I tended to figure the value of things based on CDs (music). How many CDs could I buy instead of buying that other thing? I tended to just buy the CD instead.

I also would calculate how many hours I would have to work to pay for that thing. Was it really worth 6 hours of my labor?

In both cases, it's not really about what the dollar number is, but how it compares to something else that's valuable to me.

 

[chris51080]

Back when I was teenage and first started to need to buy things with my own money, I tended to figure the value of things based on CDs (music). How many CDs could I buy instead of buying that other thing? I tended to just buy the CD instead.

I also would calculate how many hours I would have to work to pay for that thing. Was it really worth 6 hours of my labor?

In both cases, it's not really about what the dollar number is, but how it compares to something else that's valuable to me.

I always related it to cheeseburgers or tacos when I was a teenager.

I’m trying to teach my kids the same concept though; a small Lego set takes them doing dishes for two weeks. It’s a good way to look at things in my opinion.