Ford CEO Finally Confirms New "Agency Model"

Trigganometry

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True no say in pricing but what about discount plans? Where are incentives? Only Ford sets price and that’s it?? Dealers are going to have no incentives to draw potential customers. Some still like kicking the tires
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AzScorpion

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True no say in pricing but what about discount plans? Where are incentives? Only Ford sets price and that’s it?? Dealers are going to have no incentives to draw potential customers. Some still like kicking the tires
That's all covered at the 4:30 mark in the video.

We really haven't seen incentives for the past 2 years. I'm guessing this was to get people ready for this. I'm sure there will be an area to add x plan pricing but the days of high end of the year rebates are done. They only loose money doing this so it'll help their profits by only building smaller amounts of vehicles than overbuilding and then having to discount them.
 

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It is the right direction. Car dealerships are a dying industry. They did it to themselves. But they still have a lot of money left and it wouldn't surprise me if instead of going quietly, they put out a hit on this guy.
 

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That's all covered at the 4:30 mark in the video.

We really haven't seen incentives for the past 2 years. I'm guessing this was to get people ready for this. I'm sure there will be an area to add x plan pricing but the days of high end of the year rebates are done. They only loose money doing this so it'll help their profits by only building smaller amounts of vehicles than overbuilding and then having to discount them.
Ok I’ll use my buy as an example. Sticker was 37.5K. With factory incentives, dealer discounts and early Covid rebate I got like 4K knocked off. So from what I just watched that’s gone. No A, Z or other type plan was spoken of. Does Factory now control these and adjusts sticker to reflect that? Just doesn’t sound right.
 

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My local small town dealers never did the markup game. If Ford still peddling 60k+ f150 xlt's, I'm out regardless of the sales experience.
 


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Currently, a vehicle has a dealer price and MSRP (i.e., list price). I would expect buying direct from Ford will be close to what dealers pay now plus whatever fee the agency gets. This means that the agency needs to have low overhead with just be an office somewhere instead of multiple acres of property occupying a showroom and employing dozens of people.

Dealers will simply be repair facilities in the future. That is, if Farley's vision is ever implemented.
 

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Currently, a vehicle has a dealer price and MSRP (i.e., list price). I would expect buying direct from Ford will be close to what dealers pay now plus whatever fee the agency gets. This means that the agency needs to have low overhead with just be an office somewhere instead of multiple acres of property occupying a showroom and employing dozens of people.

Dealers will simply be repair facilities in the future. That is, if Farley's vision is ever implemented.
Ford still wants to make every penny they can. They won't sell at dealer prices. Expect the online price to be MSRP plus destination fees.
 
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AzScorpion

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Ok I’ll use my buy as an example. Sticker was 37.5K. With factory incentives, dealer discounts and early Covid rebate I got like 4K knocked off. So from what I just watched that’s gone. No A, Z or other type plan was spoken of. Does Factory now control these and adjusts sticker to reflect that? Just doesn’t sound right.
From what I gather the factory will now set the price and the dealer is only there for the transaction. It doesn't say anything about special pricing but I would hope that at least is there. As far as rebates and incentives go I would guess these will be applied (if available) right from the factory. Kind of like what Saturn (I think it was them) did. No haggling with dealers the price you see is what you pay. Personally I like it as it eliminates the BS everyone hates when you're at the dealership.

My sticker was $44,875 and I payed just over $38,000 plus tax and tittle. But I was there the better part of the day going around in circles with them. I'd love to just see a bottom line price and not have to deal with salesman ever again. Just show up at the dealer, inspect the vehicle and sign the papers.
 

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From what I gather the factory will now set the price and the dealer is only there for the transaction. It doesn't say anything about special pricing but I would hope that at least is there. As far as rebates and incentives go I would guess these will be applied (if available) right from the factory. Kind of like what Saturn (I think it was them) did. No haggling with dealers the price you see is what you pay. Personally I like it as it eliminates the BS everyone hates when you're at the dealership.

My sticker was $44,875 and I payed just over $38,000 plus tax and tittle. But I was there the better part of the day going around in circles with them. I'd love to just see a bottom line price and not have to deal with salesman ever again. Just show up at the dealer, inspect the vehicle and sign the papers.
We bought two Saturns years ago and I highly doubt the Ford experience will be the same. At Saturn, it wasn't just the price of the vehicle - they also gave you a fair trade on your trade in (I was surprised both times with what we got as trades - on one they actually offered MORE than I asked for initially). I bought our first Saturn going in highly skeptical, but was amazed - it was exactly what they said it was. The second one, I was waiting for something to change, but it was just as easy and fair as the first one. The "Saturn experience" was a truly one of a kind experience - I've never had one nearly as pleasant as either of those.

I'm sure the dealers will lowball you on any trade you have in order to make up some of the money they are losing.

I didn't watch the video, but are they going to restrict dealers from adding anything (glass etching, "sealants", undercoating, etc) to the vehicles before the customer gets them? That would be another area I could see them exploiting.
 
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AzScorpion

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We bought two Saturns years ago and I highly doubt the Ford experience will be the same. At Saturn, it wasn't just the price of the vehicle - they also gave you a fair trade on your trade in (I was surprised both times with what we got as trades - on one they actually offered MORE than I asked for initially). I bought our first Saturn going in highly skeptical, but was amazed - it was exactly what they said it was. The second one, I was waiting for something to change, but it was just as easy and fair as the first one. The "Saturn experience" was a truly one of a kind experience - I've never had one nearly as pleasant as either of those.

I'm sure the dealers will lowball you on any trade you have in order to make up some of the money they are losing.

I didn't watch the video, but are they going to restrict dealers from adding anything (glass etching, "sealants", undercoating, etc) to the vehicles before the customer gets them? That would be another area I could see them exploiting.
The video didn't mention anything about additional dealer add ons. I'm hoping it's like it is now at most that if you factory order there's no add on. At least that's how it is at almost every dealer here. I'm sure they'll try and upset you these things along with extended warranties and paint sealants but they do that now.

It also didn't say anything about trade ins. It says the price, dealer markup/commissions are fixed and established by the automaker. It covers all this at the 4:30 mark in the video.
 

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Ok I’ll use my buy as an example. Sticker was 37.5K. With factory incentives, dealer discounts and early Covid rebate I got like 4K knocked off. So from what I just watched that’s gone. No A, Z or other type plan was spoken of. Does Factory now control these and adjusts sticker to reflect that? Just doesn’t sound right.
Ppl will still be able to go to "Agents" to test drive and whatnot. I expect discounts will be offered on test drive vehicles at some point, but other incentives will probably be at Ford's direction. Which I'm pretty sure mostly came from the top down, anyway.

My Ranger was a former courtesy vehicle with 2k on the odometer. With the early COVID stuff, I got 8k off the top plus 0% financing. Pretty sure deals like that won't disappear entirely, but they'll come and go. It'll be a long time before we see 0% financing again, but it won't have anything to do with Ford changing its dealership model.
 

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I'll believe it when I see it but it's a step in the right direction. Ordering a vehicle online or off-line then you pick your preferred dealer. You already having a set price so the dealer it's delivered to is only an agent. There you can inspect and test drive then proceed with the sale without any worry about markups and added costs. I think Ford has seen A LOT of backlash especially with the crazy markups on Broncos and this will hopefully put an end to most of the problems we have buying a new vehicle. Judging from the comments on YouTube many love this idea too.


I'm not sure I am in favor of this. The last few vehicles I have purchased (the last is the 2020 Ranger) I ordered rather then trying to find exactly what I wanted on a dealership's lot. I sent a email to the internet buyer of several dealerships (for the Ranger it was 10 different dealerships) and requested an "out-the-door" cost. Each dealership would respond with a different cost and I choose the lowest which was always below "invoice" pricing. Now, I understand that this was a bit before the current shortage of vehicles and the huge markup some dealerships are asking but I expect the pricing to return to somewhat "normal" in a few months or a year or so.

How is using this new method going to allow me to ask different dealerships to bid for my business by offering a lower price?
 
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I'm not sure I am in favor of this. The last few vehicles I have purchased (the last is the 2020 Ranger) I ordered rather then trying to find exactly what I wanted on a dealership's lot. I sent a email to the internet buyer of several dealerships (for the Ranger it was 10 different dealerships) and requested an "out-the-door" cost. Each dealership would respond with a different cost and I choose the lowest which was always below "invoice" pricing. Now, I understand that this was a bit before the current shortage of vehicles and the huge markup some dealerships are asking but I expect the pricing to return to somewhat "normal" in a few months or a year or so.

How is using this new method going to allow me to ask different dealerships to bid for my business by offering a lower price?
They're not bidding on your business. You get to go online or to a dealer and price your vehicle. Then after you have your price you can chose any dealer you want to be your agent. They (the dealer) have no control over the pricing, Ford set this. Now there's no haggling backend forth and worrying about markups. You already know the set price.
 

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In my humble opinion, until the supply chain aspect rights itself, it doesn't matter what their sales model is.
 

JasonTremor

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Also, I'd need more details on how the trades are handled. At some point an appraiser with skin in the game has to evaluate your trade. I'd basically need to see the end to end process detailed out before I'll comment further on the proposed new sales approach.
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