In case you haven’t been in the new car market and/or paying attention, the entire playbook for ‘new car buying’ has changed drastically in the past couple years. And if you’re a car enthusiast who wants one of these more exciting specialty vehicles… it’s become discouraging to say the least. But Ford & GM have both stepped up to try & tackle the crazy markups being put on new hot-model vehicles.

 

Now – to play devil’s advocate for a sec…

Dealer inventory is historically low, and these dealers have to find ways to survive. So from that end, the markups & ‘price adjustments’ are somewhat explainable. But that doesn’t make it right. And in addition to the dealers, we now have a real problem with 3rd party consumers locking-in orders on hotter models… only to immediately flip them for substantial profit upon delivery. Here is one 1st-hand example I recently encountered with a new 2-door Bronco:

A man ordered the new Ford Bronco a year ago or more from a local Ford dealer.

The Bronco finally came in, and while taking delivery, the man said to the dealer, “I’ll be honest with you this Bronco is going straight to Carmax/etc because they’re giving me XXXX-amount more than I paid.”

The Ford dealer said, “Don’t do that, we’ll give you $5,000 right now to walk away without the Bronco.”

The customer took the cash, and dealer then put a $10,000 markup on the Bronco & parked it at the front of the lot.

(All while the new Bronco is currently going under investigation for 2.7-liter engine failures BTW.)

That kind of stuff should not be happening at dealers.

It’s unethical. And it creates a bad buying experience that turns customers off. These days – in order to buy a hot/desired vehicle, you have to essentially accept being bent over. It’s a bad look, and it’s not fair to the customer. And we’re going deep down a road that will villanize the automotive industry.

Ford & GM realize that, and they’re taking whatever steps they can to combat the problem.

Both Ford & GM are threatening to cut dealers out of incoming hot-models if they’re caught in shady sales practices. But – that can honestly only go so far, as there is a lot of ‘gray area’. GM however – is taking it a step further going directly after the 3rd party flippers. In other words – the ones that order the cars with no real intention of keeping them (like the Bronco buyer in my previous example).

GM has now said that if a customer resells one of these hot cars within the first year (Z06, Escalade-V, Hummer EV)… GM will void the warranty for the 2nd owner. Whew… harsh? Maybe – because now it ties the 2nd owner into the 1st owner’s greed. But effective?? I bet it will be! And I applaud GM for their ballsyness honestly. For doing whatever they can to deter greed, and to attempt to strong-arm some sort of ethics into the new car market. Because GM is 100% correct when they say that these ugly games are creating a bad customer experience. And GM is trying to make sure loyal customers and enthusiasts are able to get ownership of the specialty vehicles they want. Ultimately though – it’s up to the customers to seek-out honest & fair dealers. They do still exist.

“All these screens have gotten a little bit stupid.”