First post, might as well make it worth while...
I disagree that the exorbitant ADM will permanently or even long term affect the actual resale value because the supply is / has been artificially choked off by factors unknown. Maybe it’s a line discovered code bug, maybe it’s hardware, maybe everyone’s taking a union break. Who knows.
I could be completely wrong, but I’ll offer this; I believe this current Raptor market condition is transient, and will blow over. The 2 closest analogies that come to mind
1) Real estate / housing from 2004 - 2006
2) semi auto rifles in the “post-Newtown crazy” panic buying frenzy.
before the real estate bubble burst, I was literally seeing houses on my street with the sign planted in the yard, 45 minutes later, the truck returns to add “under contract” No joke. A house on my street sold in the time it took the wife and I to walk our dog around a few blocks. I asked my agent friend about it and it had 3 offers - 1 accepted, 2 contingent “follow on” offers if the first fell through. The house I live in now had 2 follow on offers if for some reason we screwed the pooch somewhere in the buying process, that was mid 2006.
what happened? The bottom fell out of the real estate market and it still has not gotten back to 2005 levels. You no longer have to pay over the asking price for a house (local to me anyway) and you can negotiate. In 2006, negotiating was an invitation to lose the house you were “negotiating” about.
After the Newtown massacre, there was a near unprecedented run on ammunition, most firearms and eventually reloading components. Scurrilous vendors cancelled sales of certain high demand articles ( that is, high demand when there’s the imminent threat of prohibitive legislation ), jacked up their prices, then re-offered those same articles for sale at artificially inflated numbers.
$100 For A Single AR-15 G.I. Magazine These things are ubiquitous, and the day before were going for ~ $10.99
That was a fairly outrageous example of an unscrupulous vendor, but like airline fares, others followed suit albeit to a lesser degree. The prohibitive legislation didn’t come and prices subsided to pre-Newtown levels after about 22 months for most articles.
What does this have to do with the Raptor?
The Raptor demand is generated by
buzz from every review I’ve seen, even with the very, very few negative comments.
Americans like trucks.
the complete shortage of units “on the floor”
the “allocation game” due to the Ford Performance “exclusivity” of the model.
Possibly due to some issues with the truck, discovered after some were built and ready to go.
Allocation is static and appears that it will not change. Media buzz continues to be extremely positive, so unless something really embarrassing happens (think Fisker) buzz for the Raptor will continue.
Supply issues will abate but for the period of time that Ford is not willing to address the supply shortage, demand will outpace supply and create the artificially inflated asking prices seen at some of the less scrupulous dealers.
Some of these dealers charging ADM at 5k over and up may have a market right now to sustain those asking prices, particularly from customer bases that are not internet savvy, maybe have a celebrity customer or 2, or a wealthy customer base, or in metropolitan areas or combinations of these factors. However, this too is transient and eventually these units will be left on the lot, lonely and waiting for buyers. For dealers that are not good at reading the market a few units will not make 2017 sales and these units could be had later this year for under MSRP like a normal vehicle but they will be exceedingly rare based on the current level of interest. There could be none, but I have seen a lot of Raptor dealer prices quotes at 10k plus over MSRP and some of these with whom I’ve spoken seemed to feel impervious to market forces.
However, once the supply begins to hit showrooms in enough volume for retail units to actually be available for display, there will be room to negotiate. This will not have an immediate effect because there are already quite literally thousands of Raptors spoken for, but as they begin to catch up with demand, the ADM will become less tenable at exorbitant levels. Unless the dealer just plain doesn’t want to sell it but maybe use it to get people gawking at new cars and trucks. Maybe there’s a value to having a high priced Raptor on the floor for other model sales.
I haven’t asked many banks, but my bank was not interested in writing a loan to cover ADM. A normal insurance policy won’t cover the ADM either. You can probably buy coverage for it, but not under a normal auto policy. I’m also thinking that more than a few buyers are going to get into ADM over their heads and suffer repossession, or possibly try to offload the truck before repossession at a slight loss. About 6-10 months after the first wave of trucks make it to the road, we should see some low mileage used examples hit the market for under invoice, which will help bring sales prices down closer to the realm of reality. Once the supply catches up, the market will stabilize and resale values will likely be on par with previous year Raptors.
Street savvy buyers, customers with dealer relationships and internet savvy customers stand a much better chance of being less susceptible to ADM over 5k. Not all of us and none of us are totally immune to it if the market conditions don’t favor us, but a buyer doing their due diligence can weed out the dealers who believe the can get the high ADM and focus our attentions on dealers with a more customer friendly pricing structure. The more we do this, the more effect we have on the high ADM dealers.
Dave
