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Ford Sends a Dire Warning to Dealers Who Try to Resell or Markup Popular Models

Ford is working hard to curb markups and reselling practices for its most in-demand models, but nothing seems to help. In the latest move, the Blue Oval issued a dire warning to dealers trying to profit by applying markups or reselling the vehicles.
Ford's CEO Jim Farley at F-150 Lightning's launch ceremony 6 photos
Photo: Ford
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Tight inventories and pent-up demand have taught dealerships that there’s much more money in the car-selling business than carmakers allow. The demand is so high for certain models that customers are willing to pay as much as double the MSRP just to get delivery. This is why most dealers today apply markups for the popular models for which the waiting time stretches months or even years.

Ford is among the carmakers most annoyed by dealers’ unfair practices. Bronco, Mustang Mach-E, or the F-150 Lightning are all very popular models that are hard to come by. In extreme cases, customers had to wait two years to get one, so you understand why people are willing to pay a lot to speed up the process. Of course, dealers obliged and slapped markups on such models. Since they reflect badly on Ford, the carmaker has stepped in to curb this practice.

In February, Ford’s CEO Jim Farley warned dealers that they would lose vehicle allocations if they forced reservation holders to pay above the MSRP. Although this seems efficient, it didn’t move the needle. Dealers got around it by moving popular vehicles in the used-car lots. This explains why there were so many new Broncos for sale as pre-owned. Ford doubled down and later imposed a strict name-match policy which required a customer name to be attached to a vehicle before it was allocated.

But even so, dealers thrived, so Ford stepped harder on the penalty accelerator with a new measure. According to Cars Direct, the carmaker has issued the sternest warning yet, threatening to take away vehicle allocations for the current and next model years for the biggest offenders. In a letter sent to dealers, Ford has clarified what qualifies as brokering and what measures it takes to prevent it. The letter also announces more substantial penalties for dealers that break the rules.

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

If enforced, this measure might have a chance of stopping dealers from using third parties (such as used-cars and auction platforms) to resell popular vehicles for a considerable profit. It still does not offer a way to prevent private flippers from selling their cars for profit. Maybe instead of just trying to prevent people from reselling their vehicles, Ford should concentrate on quenching the demand.
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About the author: Cristian Agatie
Cristian Agatie profile photo

After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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