Ford F-150 Lightning reservation holders face $30k dealer markup as demand high
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An additional non-refundable US$5,000 deposit is apparently also required to place an order for the electric pickup truck.
At ONE dealership, if you want a first batch its +$30K. If you wait, it isn't.
If you want to reserve one now it's $5000 down. That's not extra and you don't lose it if you take delivery.
I'm not a Ford fanboy, just saying.
And I wouldn't buy (let alone pay extra for) any first gen vehicle.
:-)
If the dealership tells me "It's $30,000 markup or we're taking your built-to-order vehicle and selling it to someone else" then I should be able to take that reservation and move my order to a different dealer.
Or maybe they could require the dealer to sign a contract on the final out the door price in order to submit an order.
Buy a car for 45k? Sure, dealer can deliver it at any markup you want. But, we will also drop it off at your house for exactly 45k. So not much room..
I generally agree with this. I'm curious where you draw the line though. This isn't Ford's first EV and other manufacturers have been building them for years. At what point should we acknowledge this is as a mature technology? I wouldn't hesitate to buy a car with a new ICE, what will it take for EVs to reach the same level of trust?
The down side is once they’re mature the body style changes and the cycle repeats.
My post above could have been much more clear. For a body refresh with an already proven engine/trans combination, I wouldn’t be as concerned (which is what I was trying to get at, albeit clumsily).
For all their faults, Tesla held to their original pricing on S, X, and 3 for early reservations, even giving them free upgrades when the production model had higher specs than the original announcements. More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
If a random dealership does this to me, I walk down the street to the other dealership and buy a car from them.
Edit: Actually it looks like the Ford deposit was $100 and refundable. This must be a separate dealer deposit. I am not sure if it comes before or after price agreement. Dealers are sketchy as hell so could be either.
There's four Ford dealerships within reasonable distance of me, they're all the same company.
I've had plenty of terrible experiences with pretty much all local dealers I've dealt with, Audi, BMW, Ford, VW... dealers can get away with being terrible because they all are and there's nowhere to go.
Or I just got lucky.
iirc, for a Mach-E reservation, Ford made you choose a local dealer as part of the process.
Anyone know how that played out? Were you locked into that dealer, and could they adjust the price?
The Mach-E $500 was refundable, like with Tesla. I'm reading that the Lightning deposit is $100, refundable. So the $5000 must be the step beyond that.
> More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
You mean _three_ price increases in 2021 alone that have bumped some Model 3 prices by about 30%? I'm not sure how "modest" an increase that is.
That’s some serious rewriting of history, at least for Model 3. Musk announced Model 3 at $35K price, took reservation money, and later announced that it will be a $45K Model 3 (or was it higher?). The $35K Model 3 came much much later, after the Fed credit had ended, and I believe was only there for a short time (I stopped checking after the above bait and switch).
The vehicle is great. Bells and whistles are solid. Really the only downside to it is that the battery sits in the space where you would have been able to fold down the middle row of seats. Instead, if you need to get the middle seats out of the way, you have to remove them and they are a little heavier than I expected.
Still though, the practicality can't be beat. When you fold down the back and remove the middle seats it's almost like having a covered pickup truck with as much as you can fit in there.
"We finally received an update from Ford regarding the Lightning! This will be a completely unique process from Ford and they will send a detailed guideline in January, however I wanted to let you know in advance that things are in motion.
This process is going to be based on invitation to convert as demand has outweighed production capability by far. Due to demand, not all reservation holders will recieve an invitation to place an order for a 2022 model year. Ford will begin inviting reservation holders to place orders in waves starting in January. Subsequent waves will receive an invitation in two-week intervals until 2022 model year capacity is reached. Invitations are based on reservation timing, and our estimated allocation. You will be directed to an online configurator (Build and Price tool) where you will then be able to spec out your order and then submit your finalized order. At that time, we will provide you with complete pricing including MSRP, taxes, and dealer handling fee. We are not charging any dealer markup above MSRP. Once the 22MY production capacity is met, all remaining reservation holders will be notified that their next ordering opportunity will be for the next model year."
Still a bit ominous.
this video sums it up: https://www.youtube.com/watch?v=Pil6tB6MPws
FTFY
For example health insurance companies in the US fall into the same cartel category as automobile dealerships. They scam their margin / mark-up sitting - often with regulatory protection - inbetween the patient and the care provider (hospital etc) or producer (pharma company, device maker etc).
Calling that a deposit is stretching the definition - you're just paying a fee to skip ahead in line: a reservation. Suppose though it actually was a partial, non-refundable, advance payment of a yet-to-be-determined sum. Who in their right mind would sign such a contract? Those people should find someone else to manage their money for them ASAP.
The F series are popular trucks, and it would be great to see more EV adoption from truck drivers.
I think that will be heavily influenced by either a) reliability or b) accessible repairs with cheap parts.
Ford’s fuel trucks have essentially both today, but a botched EV rollout could leave customers with neither and price hikes aren’t a great sign.
It seems they are out of touch with the market.
That may be understandable, as it is a bit nonsensical. 90% of the people who buy these trucks buy them as a status symbol: they are wasting resources, energy and emissions to signal they are active/outdoor types while driving to work and the mall. I read trucks do not count as part of manufacturer fuel efficiency targets, which is why they started marketing them to consumers in the first place. Buying an electric version of this still seems quite wasteful.
I hope people will think again and buy something right-sized.
Maybe I’m kissing something? Are the dealers themselves paying more for the trucks?
Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
> Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
> So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
Feel free to clarify, but I find your post self-contradictory. If customers don't walk away, then the dealers gain _no_ money by doing this since the money goes to the purchase. They only gain money if customers pull out and leave the reservation money with the dealer. So if dealers believe that customers will view this as a sunk cost, the only rational thing for them to do is in fact to offer to return the money.
So yes, they only pocket the $5k if they walk away, but if they didn't pocket it, many more would walk away.
And the economics above show why the dealer doesn't care if some customers don't come back.
Then the dealer has to pay for the land, capital equipment, salaries, utilities, taxes, interest(*), etc. Profit is what is left after all these expenses are paid.
In most situations, the dealer borrows to buy the car and then pays interest on that debt while trying to sell the car.
You do realize that this would that customers do _not_ view it as a sunk cost right? Hence my original confusion. Also your statement here pretty directly contradicts what you wrote earlier:
> Very few people are going to walk away from that new truck that they were so enthusiastic about put down $5k to reserve it.
edit: Okay the more I think about it I can see sort how you're calling this a sunk cost. You mean it's a sunk cost in the sense that the dealer isn't letting them take the 5k back and that will keep some people in the game. That's not really my understanding of a normal sunk cost though. In this case the 5k comes out of the purchase price of the car meaning that someone who has put 5k down will actually pay (marginally) 5k less than who has not. So there is actual economic value in considering the 5k down payment in future decisions as opposed to sunk costs that are entirely lost.
In any case, I find it kind of insane to burn these customers like this when you have such a hot market. Instead just let people out if they want and increase the prices a little more if you want those 5k in your pocket. Killing your reputation for money you can get otherwise seems a bit silly when you realize that the market will someday turn around.
Varies by where you are and how much you drive, especially in snowy conditions. But my experience is that most vehicles are better than that these days. You should be able to get to 10 years pretty reliably--and often 5+ years beyond before you start getting into expensive rust-related repairs. My prior SUV (a Ford) I definitely held onto about a year too long with a couple of expensive repairs associated with corroded fluids lines but that was almost a 20 year old vehicle in New England.
Regardless, this isn't a win for the EV column, it's not the powertrain that rots.
I'm not saying there's no affect at all, but suggesting the car will be unusable in 5 years (less than 100k on average) is an exaggeration bordering on dishonesty.
When I moved to California in 2007, a local mechanic freaked out about all the rust on my 2001 car and advised me to sell it immediately. I kept that car and eventually sold it on to someone from the east coast who didn't see any issues.
You can literally hear it eating at your car if in a quiet place.
"Not too rusty" around here is... Well, you're familiar.
Somewhere near the end of that, a brand new Acura was bought. That made it through the next 20 years (on the same roads), and had next to no corrosion.
The manufacturers really did get a lot better!
Note that the airbag recall included Utah, while the antilock brake probe did not. Also note that as mentioned, “other states such as … Utah are also considered part of the Salt Belt but use less corrosive substances.”
Did you exclusively drive on salted roads in Utah? There’s also the whole part of the state that is desert. I don’t think it compares to humid coastal states that also receive heavy snowfall and happen to include several huge metropolitan areas, with all the car commuting that entails.
Unfortunately 7 year and 8 year car loans are a thing and make expensive vehicles accessible to those with more meager incomes. They are terrible ideas though (for the consumer)
And those are usually not much of a surprise in price generation over generation without something being radically new
It pushes the scalpers out of the game, which means there's less idle inventory, and the price can come down a little faster.
Another alternative is to sell at MSRP, but bind it to the buyer for a year. This means that it can be only be resold as a brick within a year, which is obviously unattractive to scalpers. To prevent scalpers selling a sale-sniping service, just take orders from qualified buyers anytime, then fill them randomly in e.g. a 7 day window. Within a week you either get a PS5 bound to you or a refund and a chance to try again.
I like your idea about the fluidity of market rate with something being done good with the amount above x price
As a sibling comment bored, there are ways to deal with this, but honestly other than selling them at market price or somehow making more, most options are limited, because that's just how the market works.
I'm not going to begrudge someone making a couple hundred extra bucks because they got lucky. That money isn't coming from you or me, it's coming from Sony, who could be selling at that price but isn't because they want to manage customer expectations. PS5s cost the market price, and Sony happens to sell some at a steep discount, and some people make some money out of that. If Sony didn't sell at that discount, you'd still have to pay the same amount, but Sony would be getting the money, because the market demand and current supply is such that PS5s cost a lot of money.
Defeating the scale part of the scalper attack means charging an entrance fee, or using some other "proof" that hard to get at scale (like a credit card number). I like the idea of a long-term refundable reservation fee (pay $25 to get on the lottery list via distinct credit card, and if it's not delivered in a year or two you get your money back).
Something like a Gamestop membership is somewhat useful as well, but I'd just really rather see the manufacturers adopt reservation systems.
Of course this is all just idle speculation. Lots of smart people (on both sides) have been thinking about this problem for a long time.
Ford better play it's hand carefully. The F150 could be a winner, or it could be a quick flash in the pan (largely ignored, if other EV makers provide reasonable alternatives quickly.)