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This doesn't make any sense.

You would only feel ripped off because some dealerships say "No Haggle" and some do haggle. If every dealership has the same price for a specific car then literally by definition you cannot get ripped off.

You're also fixating too much on the meaning of MSRP. Before the car shortage MSRP was basically just a marketing number to anchor negotiations at a high number (except for cars in super high demand). Some automakers were notorious for deeply discounting below MSRP and some didn't discount much.

To make it as clear as possible -

Dealerships compete to win your business. They compete in varying ways, which include price and service.

Who does Ford compete with if they set all of the prices and offer direct sales for an entire product line (EV's in this case)?

The answer is "nobody". And we all know competition is what benefits the consumer... this is a regression, not an advancement.

The dealership model can use a shake-up - nobody will argue otherwise. But the answer isn't to destroy competition and allow manufactures to set whatever price they want. That benefits literally nobody except Ford.

They compete with other automakers.

By your logic Ford can just jack up the price they charge to dealers and the dealers would have no choice but to accept it. But that's not true because Ford has to compete with other automakers.

Very few automakers make competing vehicles.

There's a reason Tesla/Rivian can charge so much, and it's not because they're so much better built or way more luxurious than others.

You're basically arguing that Ford has a semi-monopoly over the car categories they compete in. Which is pretty laughable.

Again, by your logic Ford can just jack up the price they charge to dealers and the dealers would have no choice but to accept it. But that's not true because Ford has to compete with other automakers.

>Who does Ford compete with if they set all of the prices and offer direct sales for an entire product line (EV's in this case)?

>The answer is "nobody".

It would seem to me that the answer would be "every other EV manufacturer"?

Doesn’t Ford compete with . . . All the other car companies? Tesla, VW, GM, Kia, Honda, Toyota?

> Who does Ford compete with if they set all of the prices and offer direct sales for an entire product line (EV's in this case)?

Literally every other car manufacturer. Wtf…?

If Ford sells a car at $20000 to a dealership, no way they sell it to you below $20000 given they even have additional costs due to the inefficiencies of being a middleman, rent, transportation, manual staff, insurance, etc

Just like Ford can give the purchaser rebates, they can give the dealer rebates or holdbacks or various other payments when the car is sold (or if enough of certain types of cars are sold) or payments while the car is unsold; just because Ford sold the car for $20,000 doesn't mean the dealer gave them net $20,000 for it.

Why would a fixed, online price end up being higher on average than what someone paid after haggling at a dealership. If anything, it should be lower because of (1) Reduced overhead, and (2) It is more closer to a free-market due to more transparency.

Yes, there might be outliers where an extremely good haggler paid less, but that would be outweighed by a novice who paid way more, and the average has to be higher because of the higher overhead.

Why would Ford (or any manufacturer) offer cars on their website for cheaper than MSRP? What is their incentive?

MSRP is a suggested retail price, which is based off the manufacturer's costs + what they believe is a reasonable margin for their vendor (dealership in this case).

Ford cutting out the middle man means they can offer cars at the same exact price (MSRP in this case), but not have all the expenses dealerships have... meaning massive profit for them.

There is literally no incentive for Ford to offer the cars for less money. Plenty of people have eagerly paid $10,000+ over MSRP already - indicating they could even raise prices if they desired.

Look at Carmax as an example. Their entire business is built around the "no haggle" model - and if you know anything about the cars you are looking at, you will not find any good deals there. Everything is overpriced - but they will tell you it's their "rock bottom price" and any defects or problems have already been factored in.

It's just a sales tactic. Plenty of folks walk into a Carmax believing they're getting the best possible price without any of the hassle... just like their commercials tell you.

What you are saying doesn't make sense UNLESS there is a monopoly. Let's say it costs Ford $10k to manufacture the car. Let's say their average profit per car is $2k, and the dealership gets $1k on average - which means that ON AVERAGE, the dealer sells each car for $13k. Some people might get a good deal for $10k, and some pay $16k. MSRP is likely set to $16k.

You are saying that in the fully online world, Ford would get away with the same MSRP of $16k. This is not possible as long as another competitor can produce the same car for $10k or less and charge say $12k for it. Why would any consumer go for Ford in this case?

I haven't used Carmax but that's different - their whole business is in flipping cars and they have to make enough profit to run their website on top of it. So I would assume it is always going ot be higher price than what you'd get from elsewhere.

Dude just wants to think that his haggling is putting them on top of all of us. When the CEO of Ford says he's spending 2k more than Tesla for delivery. We all lose, them included, but haggling makes them believe they're coming ahead.

They don’t realize the whole dealership setup is designed to make the haggler think he got a good deal. The industry is built around capturing people who think they’re pulling a fast one on the dealer.

Very true, but in recent times it has been much easier to try to pay a fair price. That is until covid hit where it became a sellers market. However it looks like we might have another 6more months before it switches back to a buyers market the way things are going.

For example when I want to buy a car: I start at Carmax which I know its the highest price i can pay for the car. In history I have always been able to get a used car for 2.5K -4K cheaper elsewhere .

This is typically how it goes.

1. I determine which make,model, year car I want.

2. Determine what carmax has it listed for and make that the highest overpriced value for the car.

3. I send out emails and call dealers for similar cars ( millage,model,wear , etc) give them my price that is under 2.5K - 4K less than carmax.

4. they say sure come on in.

5. The games begin and the bs runs from the salesman script that tries to convince me that a manufactured car in the 100Ks is a custom one of a kind vehicle that I will never be able to buy again.

6. i Say here is my price and the good cop salesman than sends me to the back to the sales manager who says I will put him out of business if he sells me that vehicle for that price.

7. I say I understand then I walk out and he lets me walk out.

8. A few days or even a month later he calls me back says he can do the deal then send me back to the sales manager again.

9. the Sales manager than says oh sorry we cant do that price because its a cash offer or that I have to use his preferred loan provider. Or tries to convince me to take his loan provider anyways and then cancel it by paying cash or refinance it a week later.

10. I walk out again or I get the car. One case I had to walk out again until I got another call to come back. In most cases I only waste about an hour in the dealership all together talking to the salesguy and manager, since when the send me to the back to the sales manager I typically tell them I have 15 minutes to make it happen or you can call me back when you have all the information you need to make the decision.

So atleast today we have the no haggle places now to tell us what is the ripoff price for the car and not the dealership sponsored bs MSRP or the kelly blue book crap.

The crazy thing is that I actually want to buy the car from carmax because I do like the experience better, but its not worth paying 2.5K to 4K more for an equivalent car.

I sincerely hope you're not trying to convince us that what you're descibing is a reasonable experience. Every word you wrote describes true horror!

It certainly is true horror experience and why everyone hates the dealer BS experience. However it was even more painful prior to the carmax of the worlds, where the consumer was in the complete dark about prices all together.

Atleast with the carmax and other fixed price dealers , you know what the worst possible deal is and can typically save 2.5K to 4K by going to a normal dealer. You just have to be willing to play the stupid games with them.

The incentive should be competition with other manufacturers who are also offering fixed pricing. More transparency will benefit consumers.

Haggling over prices does not benefit consumers, just like haggling over wages doesn’t benefit employees.

The Carmax approach is great; clearly people are willing to pay to avoid all the normal hassle. Maybe their prices aren’t the best “if you know anything about the cars” -- where does that secret knowledge come from? Wouldn’t it be good if there were multiple Carmaxes and they had to compete on price and service? As long as the real prices were listed on the web and were always the same for everyone.

Car manufacturers have a history of being pissed off at dealers for their markups and giving priority to dealers who sell under MSRP https://www.cnet.com/roadshow/news/heres-how-dodge-plans-to-...

I've bought 4 cars from Carmax. (I have 3 kids.) I know I'm not getting the "best possible price." I don't care. I've bought cars from the standard dealership model, and I hate it so much, I'm willing to pay a non-negotiated, FAIR market value for a used car in order to avoid the sales-tactic bullshit and playing the haggling mini-game. I don't intend on ever buying a car from a NON-non-negotiable place again. The dealership model can die in a fire, thank you very much.

Any intermediary is only going to add more to the price, not less. If an intermediary made prices cheaper for their customers than upstream, then they wouldn't be in business.

The incentive is clearly competition from other manufacturers. In a world of dealerships, competition is murky because you can't really know the final price of a car unless you play the haggle game with every dealership. But if every manufacturer had all the final prices online, you can easily evaluate what is the better deal.

I really don't understand the rip off feeling if the price is the price.

If I see a widget and the widget meets my needs and the widget fits my budget and I buy it, I don't care how much profit they're making. Why does it matter?

I think the act of feeling ripped off or having to make sure someone only makes a certain amount of profit is a path that leads to anxiety.

You haggle over most things that cost more than $50,000 because those things are unique and their value is subjective.

I don't haggle over the price of gasoline or milk. It's not because the price is low. It's because the identical product is available from a dozen local merchants and I know which is cheapest or which has the best lit parking lot or which has self-checkout. Price becomes so standard that merchants try to compete in other ways. And for those that do choose to compete on price, $0.05 difference on a $5 item is a big gap.

> When I see "No Haggle, Fixed-Price, Online Only", I think "Rip Off", and I can't be the only one.

Since I'll know a fair price of the vehicle before I run across that, I can determine if it is a "ripe off" or a fair market price, with far less hassle/wasted time. I'd always buy from a no haggle dealership if the price was competitive (and my last vehicle purchase was exactly that, it was +-$1K from normal price based on vehicle loan records).

The problem arises when there is no other reference price to compare to. By only offering 1st party sales, and only on their website - Ford sets the reference price. So there will be no comparisons available... and gradually cars will get more expensive because they can and people will pay it.

The other reference prices are the list prices of competing vehicles.

You also have it backwards. The current system of "MSRP as guideline" and you have to negotiate to find the real price makes it more difficult to compare prices between cars and automakers (unless you relish negotiating the prices of 4 competing cars simultaneously at 4 different dealers). The current system is set up precisely to not be price transparent.

The reference price is then their competition, and since prices are not obfuscated you can compare 1:1.

Just like now, but dealerships add a whole layer you have to figure out by determining likely "discounts" between different brand's dealerships.

If the manufacturer could charge more they'd already be doing so, the dealership doesn't actually dictate the prices, they get told the price and are expected to negotiate up then keep the difference.

You keep making the same comment where you pretend you don't know that Ford isn't the only car manufacturer so you can justify the existence of dealerships.

> the younger generation's fear of conflict (a negotiation is an adversarial conflict)

The younger generation doesn't necessarily fear conflict. Just look at how it's winning the conflict about conflict against the older generation.

They (we) want to reduce these kinds of negotiation because they give an economic advantage for entirely arbitrary reasons: someone getting a car cheaper because they negotiated harder or getting a better job offer because their trust fund allows them to walk away with ease does in no way benefit society. Whatever they save, someone else has to pay extra to make the system work for the dealerships.

Worse, the ability to negotiate is not some random variable. It's tied to aggressiveness and a sense of entitlement. It's a lifelong rebate for bullies that practiced that sort of thing by stealing younger kids' lunch money. And the only reason it has survived as long as it has is because that happens to be the demographic car salesmen also hail from.

Worst, it isn't even just about someone's ability to assert themselves: a salesman may well react entirely different to the same exact words and behavior based on criteria that would invoke laws against discrimination in other cases. I remember a number of stories of black homeowners being quoted 30 % when having their homes' resale value assessed. Don't remember seeing any tests for car sales, but I'd be surprised if it didn't replicate there: be a white broad-shouldered tall good-looking man and your lowballing makes you a strong opponent. Lack any of those criteria and it's considered an insult to the profession and you get the cold shoulder.

This.

I don't feel like being subjected to hours of manipulation and predatory behavior. I surely know how to push back and deal with it, but it doesn't mean I want to.

Local taxis are often cheaper than Uber/Lyft now since they don't have surge pricing. But the downsides are much worse that people will still pay a premium to not deal with it.

In reality, just like you no longer get a discount for buying online (remember "it's cheaper since the company doesn't have to pay for a brick & mortar store!"?) I wouldn't expect Ford & others to pass the savings along for long. But I'm okay with that given the upsides of saving me time and some mental abuse.

If you believe in competition then the logical consequence will be that the no haggle MSRP will be much more competitive than the current (well pre-COVID supply chain horror) MSRP with 5% padding built in because everyone likes to haggle and think that they are getting a good deal.

I don't follow this logic. The article says Ford is going 100% online for these cars, meaning there will be no other reference price available. Ford can charge whatever they want, so long as some people are willing to pay it - and during COVID we've seen people more than willing to way overpay on cars.

There is no competition with Ford's direct sales website. None.

At least dealerships attempt to compete on price.

There is competition between car companies.

Also competition with keeping your existing car. People won't pay just anything.

> There is no competition with Ford's direct sales website. None.

Do I have to buy an F150 Lightning? I do not.

That’s the missing link. They’re assuming that the person has to get the F150 - but they could buy something else, but nothing, wait for a cyber truck - many other options.

I enjoy a car haggle every now and then, but what makes it so fun is that its one of the few places you can haggle.

Try to haggle down the price of a bean burrito at taco bell and see how much fun that is. There are all kinds of bean burritos to choose from in mi barrio, but they aren't budging to make a deal.

The same people haggling for cars are paying over asking on house bids.

I've haggled at a guitar center, but then I can't do the same thing at a hot topic when I pick up my chain jeans.

It's a weird game, but more bragging than haggling. The sense of satisfaction at having bargained it down is a pretty good rationalization after you've purchased.

The real value of haggling is realizing some externality that you can take advantage of - a hail damaged car, a untuned guitar, something that would cost them to deal with and you can take off their hands.

> When I see "No Haggle, Fixed-Price, Online Only", I think "Rip Off", and I can't be the only one.

One thing is certain - the more middle men you have, the more expensive it will be.

In theory, if manufacturers charge an inflated MSRP, a competitor who doesn't will get the sale instead.

In practice ... well, maybe everyone makes more money if no-one undercuts each other too much. Is it collusion/price-fixing/anti-competitive? Or is it just good business?

You're negotiating by going to the other car makers website. It's actually much easier to find a good deal since it's much easier to discover prices compared to dealers.

The only time you can get a "good deal" on a car, is for a car no one wants anyways. Go ahead try it with a decent car.

Not just cars no one wants.

Last car I bought, a Subaru Forrester, which is like 25% of cars in Seattle, I knocked $4000, off of msrp by haggling from 28k to 24k, cross shopping across dealers and walking in with a set price I was willing to pay after finding the lowest dealer. Also going in during 2 manufacturer rebates (one cash, one charity match), and at the end of the quarter. 2018s were starting to show up, bought the 2017.

They got real triggered when I said "all you gotta do to put another name up on that trophy board is come down $500 more" (they were writing all of the sales on the window as they happened).

Brought a book to read while they went in to "talk to the manager".

While there is the option to compared to 'no haggle', I can sit there and waste an hour on their BS for $4k. I find it fun and interesting, and I don't buy cars when I have to only when I want to. Helps to have multiple backup transportation methods.

If I had bought a Prius Prime a few months back I could have gotten $1000 cash back from Toyota, plus a $4500 federal tax credit. Right off the bat I would have beat your haggle by $1500. What a haggler I would have been!

But seriously-- if we're comparing "no haggle" to "haggle" then it doesn't really make sense to include the manufacturer rebates in your total. You'd presumably get those even if dealerships didn't exist.

Of course in this market if you had bought one you could have immediately drove it back onto the lot and sold it back for more than you paid …

Yes. But that's like the Mitch Hedberg joke where he sees stacks of Sam's Cola at Sam's Club for 25 cents and suddenly in his mind he's become a soda salesman.

"Hi, would you like to buy a can of soda for 50 cents? It's warm, because this is a half-ass deal..."

Heh I was referring to the fact that used 2019 models with 40k miles on them currently will sell for MORE than MSRP for a brand new car, because the used one is on the lot and available, the new ones are 6 months out.

Fair... It was $800 cash back from subaru and a $200 charity match. however the dealer just tossed in the $200 for the match so they could make the sale and pump up their charity numbers. So $800 of that $4k was a thing you would have gotten anyway. So I only dropped the price $3200. Still a good hourly rate.

I would rather sit through a timeshare pitch. What a waste of time for all involved

Except they inflated the MSRP by $4k beforehand in order to give you the impression that you got a discount.

I can see the MSRP online and at the no-haggle dealer and on the website for the manuf, MSRP is the one number they do publish.

> younger generation's fear of conflict

this seems unfounded, with no way to ascertain it. and likely driven by some unconscious biases