Photo: Ford | Edited
Many people have been appalled by car dealers in recent years thanks to some questionable habits of double-crossing their customers. A Canadian who ordered a Mustang Mach-E from a local dealer was shocked to learn the dealer sold his car to another customer and tried to sell him another one at a higher price.
Dealers have been harshly criticized for their questionable practices, especially as buying a new car has become more difficult in the post-pandemic years. The chip crunch and other supply chain problems have affected new car production, and customers have had difficulty buying new vehicles. There were long waiting lists for most in-demand models, and dealers profited, making a bad situation even worse.
We wrote about bizarre "market adjustment" fees slapped on the stickers of new vehicles, sometimes doubling the price. But dealers have done worse things, which ultimately attracted customers' ire, and prompted carmakers to take measures. That's when we found out that dealers would put new vehicles in the used-car lots to be able to charge higher prices. Or hiding questionable fees from the buyers until delivery, hoping they would pay just to secure the vehicle in a constrained market.
Things have gotten so bad at some point that carmakers like Ford and GM had to take measures to curb the phenomenon. It also made industry players question whether car dealers are still necessary, considering they cause more problems than they solve. Ford recently blamed its losses partly on the outdated business model, hinting it might decide to sidestep dealerships and sell cars directly to customers to increase margins.
In another outrageous story from Canada, a Ford dealership sold a customer's pre-ordered Mustang Mach-E and then offered to sell him another vehicle for more money. In July 2022, Ryan Lopez signed a pre-purchase agreement with Dams Ford Lincoln for a $70,400 Ford Mustang Mach-E. At the time, the dealer informed him it would take several months to deliver the car. A few weeks later, when Lopez called the dealership for an update, he was told they had no record of his car ever being ordered.
The customer contacted Ford Canada and tried to find out what was happening, and they confirmed his order was in the system, with a projected delivery time in December. Ford also told Lopez how he could follow the build process online. He did, and when the car was delivered, he went to the Dams Ford Lincoln dealership to ask questions. They told him they could not find his car and later admitted they sold his car to another customer. Lopez was offered an ICE vehicle or another Mustang Mach-E instead, but at a higher price.
Seemingly, the Ford dealer made a profit by selling Lopez's pre-ordered car for more money and then tried to dupe him into buying another vehicle at a higher price. The disgruntled Ford customer tried to convince Ford Canada to offer him a credit to cover the price difference between the order and the delivery, which is about 10,000 CAD (7,435 USD at current rates). Nevertheless, the carmaker declined to help, saying in a letter that they regretted the inconvenience, but it was a private sale between Lopez and the dealer, so they could not help.
This shows why the dealer sales model is flawed and needs to be changed. Right now, we're looking at an obsolete business model clinging with all its might to the familiar past. We're not saying that all car dealers are like that, but having such bad examples among them would not help the cause. New EV makers, Tesla included, have demonstrated that direct sales are a viable and sometimes better way of selling cars. Legacy carmakers are also contemplating moving away from the dealership model. It might take a while, but someday, carmakers must choose between going forward alone or dying with their dealers.
We wrote about bizarre "market adjustment" fees slapped on the stickers of new vehicles, sometimes doubling the price. But dealers have done worse things, which ultimately attracted customers' ire, and prompted carmakers to take measures. That's when we found out that dealers would put new vehicles in the used-car lots to be able to charge higher prices. Or hiding questionable fees from the buyers until delivery, hoping they would pay just to secure the vehicle in a constrained market.
Things have gotten so bad at some point that carmakers like Ford and GM had to take measures to curb the phenomenon. It also made industry players question whether car dealers are still necessary, considering they cause more problems than they solve. Ford recently blamed its losses partly on the outdated business model, hinting it might decide to sidestep dealerships and sell cars directly to customers to increase margins.
In another outrageous story from Canada, a Ford dealership sold a customer's pre-ordered Mustang Mach-E and then offered to sell him another vehicle for more money. In July 2022, Ryan Lopez signed a pre-purchase agreement with Dams Ford Lincoln for a $70,400 Ford Mustang Mach-E. At the time, the dealer informed him it would take several months to deliver the car. A few weeks later, when Lopez called the dealership for an update, he was told they had no record of his car ever being ordered.
The customer contacted Ford Canada and tried to find out what was happening, and they confirmed his order was in the system, with a projected delivery time in December. Ford also told Lopez how he could follow the build process online. He did, and when the car was delivered, he went to the Dams Ford Lincoln dealership to ask questions. They told him they could not find his car and later admitted they sold his car to another customer. Lopez was offered an ICE vehicle or another Mustang Mach-E instead, but at a higher price.
Seemingly, the Ford dealer made a profit by selling Lopez's pre-ordered car for more money and then tried to dupe him into buying another vehicle at a higher price. The disgruntled Ford customer tried to convince Ford Canada to offer him a credit to cover the price difference between the order and the delivery, which is about 10,000 CAD (7,435 USD at current rates). Nevertheless, the carmaker declined to help, saying in a letter that they regretted the inconvenience, but it was a private sale between Lopez and the dealer, so they could not help.
This shows why the dealer sales model is flawed and needs to be changed. Right now, we're looking at an obsolete business model clinging with all its might to the familiar past. We're not saying that all car dealers are like that, but having such bad examples among them would not help the cause. New EV makers, Tesla included, have demonstrated that direct sales are a viable and sometimes better way of selling cars. Legacy carmakers are also contemplating moving away from the dealership model. It might take a while, but someday, carmakers must choose between going forward alone or dying with their dealers.
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