F150 Lightning markups have already started

[mkg3]

No, because Tesla has made good margins on their cars. They could absorb some price increases if they wanted. They seem to be jacking the prices up because they can, much more than other manufacturers. Just like dealers.

The point is that a cost increase is a cost increase. A direct to consumer model doesn't prevent manufacturers from raising the price for demand any more than the dealership model does. It's just less transparent.

Traditional mfg would love to have Tesla’s gross margin. They cannot become of legacy costs, unions and dealer incentives to name a few.

There is reason why valuations of Tesla and Rivian are where it is compared to all the other mfg. You can say they are over valued and short them but the reality is they simply are more valuable going forward.

Your logic of absorbing more cost inflation is an option and we don’t know if they have or not. You’re assuming that they have not. I don’t pretend to know. What I do know is that Tesla has lowered the price of their vehicles just as often as increased them. When is the last time legacy mfg has done that? Probably never.

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[mkg3]

To your last point, my experience when I was considering a Tesla a year ago was significantly worse and more aggressive than any of the dealers I've interacted with from Kia to Ford to Audi to VW.

Direct to consumer models can suck. Just like dealers can suck.

Case in point, Seattle Volvo service department and sales group is fantastic. The Bllevue service center is definitely sub optimal.

Thanks for keeping the dealers alive for bit more longer. Their days are numbered as far as I’m concerned.

I ordered my Tesla online and picked up. No haggling or aggravation at all. Paper work was done all online.

 

[SoCal Rob]

No, because Tesla has made good margins on their cars. They could absorb some price increases if they wanted. They seem to be jacking the prices up because they can, much more than other manufacturers. Just like dealers.

The point is that a cost increase is a cost increase. A direct to consumer model doesn't prevent manufacturers from raising the price for demand any more than the dealership model does. It's just less transparent.

I understand that manufacturers can raise the price based on demand just like the dealerships.

The difference, at least to me, is that with the direct model there is no opportunity for negotiating and wondering if going to a different dealer or even a different salesperson within the same dealer would result in a different purchase price. When we bought my husband's commuter car there was a couple buying another identical vehicle. I am nearly certain that they didn't pay the same price we did, but I always wondered if they paid more or less.

At least if I go to buy a Tesla or Rivian 6 months from now and the price has increased I know it has increased for everyone walking in off the street and not just for me. I can then decide if the price works for me or not without having to second-guess myself. I understand that some people enjoy the negotiating/haggling process. I don't and being able to avoid that has value to me.

 

[Blur1t]

According to Twitter and Jalopnik Ford dealers are already being unpleasant and one of the biggest hurdles that legacy auto makers will face.

Link to the price gouging dealerships (on F150gen14.com):

F-150 Lightning Dealers Already Requiring ADM Price Markup to “Prioritize” Order

I know too when I canceled my Lightning preorder the dealership told me twice they would credit the money, after waiting the ten days to be sure each time i finally had to go to the dealer, you’d have thought I was buying a unicorn from a donkey store. The experience left me with the overwhelming idea that I’m super glad I got that $ back. I’ve owned either Ford vans or trucks my 30 years of driving too. I’m completely not going to miss the “dealership “ aspect one iota. As a former mechanic, I will not miss the other mechanics shenanigans not slimy salesman, managers and general staff of them as well. Markups on direct sales are easier to swallow. I was just told by another dealership the tens of thousands of F150’s that were parked in the Kentucky speedway awaiting chips we’re all trashed. He, as the sales manager, says they only have five new cars on the lot. Seems like some serious waste of money if what he said was true. Personally I do not believe it, but the trucks are all gone from there like almost over night.

 

[DuckTruck]

Sometimes they do. But when demand is low. You're also able to get cars below MSRP. Do you think Tesla is going to be dropping the model Y price anytime soon? I just find it funny that people seem to be a-ok having a manufacturer increase the price due to demand, but the moment a dealer does its outrageous. Both systems have advantages and flaws. Personally I generally like a direct to consumer model. That being said, generally the dealers I've worked with care a lot more about my business and the relationship than the manufacturer does.

SeaGeo,

I agree with all you said here. Both the dealer and direct models have their good points and bad. As you mentioned, the dealer model can differ greatly between different dealers for the same nameplate.

I can say I've never dealt directly with a manufacturer before Rivian came along. Does your "direct" experience go beyond Tesla? Any new ICE vehicles purchased outside of the dealership model?

Given what we're seeing with Tesla, Rivian, and all of the online sellers these days, I can sure see the dealership model diminishing going forward. Not going away anytime soon, but accounting for an ever-shrinking chunk of new vehicle sales over time.

 

[Scoiatael]

I'm hoping to be able to order the f150 lightning next month but I wouldn't be surprised if I can't. Ford or the dealers will screw day 1 reservation holders somehow. I'm going to place a reservation for the Silverado ev as fast as I can on Jan 5th and hope gm can do a better job. With the speed Rivian is currently going, I don't see any chance I'd get an r1t before mid 2023. I think at this point I'm out of luck getting an EV Truck in 2022.

 

[RideAlong]

Dealers Choice. Choose wisely

 

[Temerarius]

From my point of view, the difference between a Dealer and a Manufacturer mark up is pretty clear, namely, if a manufacturer, I can see the price increase, I know what I will pay at the end of the day.

Dealer markups, as evidenced by the Twitter thread on this all, are all over the place. To me, that is the biggest issue with dealer, the sense that, in general, you have to fight, tooth and nail to make sure you are not going to get screwed, and you have no idea what the actual price of a vehicle will be out the door from dealer to dealer.

Will dealer A give you a better price then dealer B for the exact same product, you get to spend a few hours of your day or week finding out...

When I ordered from Tesla, that was my price, full stop. No negotiating, no mucking about with a manager, no "what can we do to get you into a car today" drivel. It was simply, "Here is the price." As a consumer, that makes it very easy to determine if the vehicle is in scope, or not, and does not require a substantial time investment on my part to distill this information down.

 

[Monkey]

The dealership model is a complete sham at this point. Too many ridiculous laws put into place over decades to protect the dealership from the evil automaker. All done under the guise of protecting the consumer, but the tables have turned and now dealerships are the predators. It's been that way for at least 50+ years, but we're seeing just how real that is with the low supply of new vehicles and all the incoming threats from new startups or EVs that are selling direct.

As for the Lightning, Ford is handling the invites so dealerships can't mess with that. Each dealership was given the opportunity to prioritize a certain number of reservations, which varied by dealership in proportion to their total allocations. They had to submit their new list to Ford on Friday evening, so it's done. Yes, some dealerships were trying to charge customers for the privilege of priority positioning. IMO, that's just awful.

In terms of manufacturer pricing vs. dealership markups, it's really not the same thing. Manufacturers can't set the pricing when selling through a dealership... They of course charge the dealership a price for the vehicle and if the dealership wants to sell below that, that's their deal. But that's not really happening these days. Th problem with dealership markups is there's no consistency and some are outright slimy, predatory, whatever you want to call them. Ford sells the Lightning to all dealerships at $XXXX price. They can't change that, it's the same everywhere, by law. so you have to talk to a bunch of different dealerships, or have good relations with one to begin with, in order to get a decent price and know that they're not going to move all their friends and family to the front of the line when Ford lets them reorganize 25 of their 250 Lightning allocations.

Some dealerships are charging $30K premiums by way of ADM/Market adjustment or other fees. Some are selling for MSRP, some are selling for less via the pricing plans. I'm getting approximately $1200 under invoice on my retail lighting. I have it in writing, have bought from this dealership before. Have no reason to doubt them. I know where I am in their queue, but don't know if it will be in the first wave or not. I hope so since I put my order in within the first few minutes of reservations being available -- well before the reveal event ended.

I much prefer the way GM is handling Hummer EV and Cadillac Lyriq reservations and deliveries. For those, GM holds all the allocations, not the dealerships. They invite people in the order they reserved and have them confirm their configuration and order with a dealership. There is no ADM or surprise fees. All the GM Hummer EV and Cadillac EV dealers had to buy into new separate programs for those vehicles and agree to pricing structures. Unfortunately as far as these trucks go, the Hummer EV is a bit niche and very expensive. Silverado EV doesn't open reservations until next month and initial production is 2024 model year. I'm still throwing in a reservation just in case...

 

[GaryL]

For all of the mashing of teeth about car dealerships why is this system still intrenched in the US auto scene. During the 2007-08 financial crisis the big 3 were racked over the coal over pulling franchises. Auto dealership lobbies have spent a lot of money on politicians (Republican and Democrat alike) to keep the current system in place. Until there is an organized opposition it's not going to change. May be a video of some of the shenanigan would help but then again that is a politician's natural environment.

 

[Sgt Beavis]

I kinda wish my Ford were participating in these shenanigans. It would make my decision easier. But, Interstate Ford in Dacono, CO reaffirmed to me that they will only be charging MSRP and a $500 dealer fee. The dealer fee is bull but all the dealers in Colorado do it and they never back off.

I was also told that only 3 “VIP” got pushed to the front. I was #3 to begin with so I guess I’m #6 now. But their allocation is high enough that I should be in the 1st wave.

This is why I need a delivery window from Rivian. If I know I’m getting an R1T in 2022, I can cancel my Lightning reservation.

 

[Gearhead500]

Is there a correlation between dealer markup and the number of cup holders?
Sorry I had to…

 

[cc84]

Will dealer A give you a better price then dealer B for the exact same product, you get to spend a few hours of your day or week finding out...

When I ordered from Tesla, that was my price, full stop. No negotiating, no mucking about with a manager, no "what can we do to get you into a car today" drivel. It was simply, "Here is the price.

No argument from me on your opinion, and I'm right with you. Same line of thought here......but, I'm presenting another side to the argument: One doesn't need to spend any time going from dealer A to dealer B. That is a person's choice to do so. To avoid doing this, just pay what they ask, the same as what Rivian requires.

With direct buy from Rivian, you have no other way to compare pricing for the same vehicle. You pay what they determine to be a fair price.......you hope. You can only compare it to what other EV manufacturers are offering, but it's not the same vehicle.

Prior to today's vehicle shortage, if one went to any, example only, Ford dealership and offered to pay their MSRP price, more than likely they would accept it with no negotiating necessary. No need to waste more time looking, just go to one dealership and buy it off the lot. Same as what we're doing with the Rivian, except there's no lot.

However, it may be due to our nature of wanting a better deal. So, we may visit several dealerships to try and get a better price, but you don't have to, it's our choice to do so. I've never paid full MSRP for a new vehicle and won't........but it appears I will be for a Rivian. I don't have a choice to try and get a better price. I sure can't shop around to compare prices, plus I get the luxury of waiting 3 years plus to get one.? (I know I'm an idiot, but I've learned my lesson.....never again)

With Rivian, there is only one place to buy......directly from them. They have a MSRP too and you're going to pay their asking price. There'll be no need to negotiate, or worry whether you could get a better price elsewhere, or if someone is getting a better deal than yourself. You don't have a choice and will more than likely be waiting a while for your vehicle.

 

[GoWest!]

Is there a correlation between dealer markup and the number of cup holders?
Sorry I had to…

Cup holders…?

 

[opnwide]

A friend of mine once alleged we may have gone to a strip club in college, but I’m fairly sure he’s trying to black mail me because I have no such recollection. Nonetheless, I could only imagine if I had, that’s the same feeling I usually feel after buying a car at a traditional dealership. I’m just hoping and betting RJ my RIVN one dollar bills that I don’t feel dirty at the end of the night.

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