Ford Makes Another Serious Threat To Dealers And Customers To Stop Markups And Flips

Industry News / 18 Comments

This could finally bring an end to ridiculous price gouging.

Ford has arguably suffered the most from the current dealer markup practices across the country. Over the last two years, it has introduced several high-profile models like the Bronco and Bronco Sport, Mustang Mach-E, and the F-150 Lightning. It has now issued the sternest letter yet, aimed at brokers and resellers.

The F-Series has been hit particularly hard. Ford's 2022 F-150 consignment is already sold out.

So far, Ford has issued two stern warnings to its dealer networks. First, Ford's CEO, Jim Farley, sent a severe warning to its dealer network. Following that, it implemented a more strict name-match policy which required a customer name to be attached to a vehicle before it was allocated.

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Now it has sent the sternest warning so far, aimed at brokers and resellers. The memorandum threatens to take away a third-party dealer's allocation of the most sought-after models.

Cars Direct got hold of a letter sent to brokers and resellers warning about slapping hefty markups on vehicles.

"The first offense may result in a 1:1 reduction of future allocation by the amount brokered. The second offense may result in all model allocation being redirected for the current or next model year," stated the letter.

In short, if a dealer breaks the rules more than once, it risks losing current and subsequent model year allocations. Whether Ford will follow through remains to be seen, especially with a high-volume model like the ICE F-150.

2022 Ford F-150 Lightning Front Angle View CarBuzz
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According to the letter, "brokering includes the utilization of any third party to wholesale, transfer, or otherwise deliver inventory, especially vehicles in high demand (including, but not limited to Raptor, F-150 Lightning, and all specialty vehicles). Additionally, any non-Ford dealer or non-Lincoln dealer that provides vehicle and inventory relocator services, automotive transfer assistance, dealer trade facilitation, and/or any other company by similar name or service is considered a broker." What's more, there's a provision for Ford to take away a customer's order if the Blue Oval suspects that they will flip their car.

While this new system has the potential to work, Ford still does not have an answer for private flippers making a quick buck. Due to the shortage of these new products, owners lucky enough to receive a car find themselves in a highly desirable position. Early in June, we reported on private sellers flipping F-150 Lightnings for six figures, and as long as there isn't enough supply to fulfill demand, this problem will likely persist.

2021-2022 Ford Mustang Mach-E Front View CarBuzz
Source Credits: Cars Direct

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