Dealers Will Feel the Ford Wrath for Price Gouging, but That Doesn’t Really Help You
The latest problem facing the automotive world is a shortage of vehicles to sell. When demand is greater than the supply, those with the supply increase prices. This is relatively normal, but some Ford dealers are increasing the prices of the Ford F-150 Lighting to the point of ridiculous. Price gouging is a serious problem and there’s not much consumers can do unless the automaker does something about it.
Thankfully, Ford has a plan.
How far have some Ford dealers gone with price gouging?
With the shortage of new vehicles in the market, we can’t expect dealers to take less for a vehicle than MSRP, but three times that number seems a bit over the top. MotorTrend tells us some dealers have sold the entry-level version of the Ford F-150 Lightning for up to $130,940. The MSRP for this vehicle is $41,769, making this markup incredible ridiculous. In fact, the vehicle marked up to this level is supposed only to be available to fleet customers.
Some Ford locations are transparent; others, not so much
When visiting dealership websites to learn the price of the Ford Lightning EV truck, some locations list the price while others simply offer a “call for price” item to engage customers in a conversation. Even though one dealer states, “price is $40k over MSRP,” that doesn’t change the market and the absurd prices we see for this truck.
What is the Ford plan?
Ford President and CEO Jim Farley has heard the grumblings of the public and plans to punish dealers that engage in price gouging. The punishment will limit future allocations of Ford EV models and other hot sellers such as the Ford Bronco SUV. Limiting access to new models can quickly and easily hurt the bottom line of many dealers.
Even though dealers have full control over the price they charge for a vehicle, MotorTrend informs us that nearly 10 percent of dealers are taking advantage of the “seller’s paradise” with rampant price gouging.
In addition to limiting future model allocations to dealers guilty of rampant and ridiculous prices, Farley hinted at another strategy. There could be a new go-to-market strategy that allows new EV models to completely circumvent the guilty dealerships altogether.
Some dealers take advantage of your financing
It’s important for you to be aware of current vehicle interest rates and receive more than one quote for financing when buying a super-in-demand vehicle. Dealerships can offer interest rates that are higher than what you qualify for and pocket the difference. They do this by taking out their own financing at a lower rate. While this sounds shady, it’s also perfectly legal and something you want to avoid.
What can you do to avoid Ford dealers’ price-gouging your deal?
Even though we don’t have any idea when the auto market will level off, there are some things you can do to avoid becoming a victim of price gouging.
- Compare prices and rates of several dealers – If 10% of the dealers are involved in the absurdity of the Ford Lightning prices, 90% are not. Find a dealer with prices much closer to the MSRP for the truck you want to drive.
- Secure your own financing – Visit your local credit union or bank and secure financing ahead of time. You can still compare the rate with what the dealer offers, but you’ll likely pay less at your bank.
- Reserve a high-demand vehicle – When reserving a high-demand vehicle, lock in the price so that you know exactly what you’ll pay when it arrives at the dealership.
With these tips, you can avoid becoming the victim of price gouging, whether it’s from one of the Ford dealers or another auto brand.