Ford Warns Dealers Against Additional Deposit / Payment Requirements For Lightning Orders. Supports No-Resale Provisions in Purchase Contracts

Bulletin just sent out this morning to Ford dealers from Corporate ?? Now do something about those greedy ADM's! ?

See article:

Ford Warns Dealers and Customers Alike: Don’t Screw With F-150 Lightning Sales

Justin Banner, Jan 10, 2022

It seems that Ford is ready to do nearly anything to protect the upcoming F-150 Lightning EV pickup from negative news or a poor customer experience. The automaker is hoping to head off a big potential doozy that's endemic to hotly anticipated new car debuts: Egregious dealer markups on new F-150 Lightnings. Dealers are being warned against asking for additional deposits or any other presale payments. It also puts in a new "no-sale" provision upon purchase for the customers, to prevent folks from flipping their Lightnings for a quick buck.

Extra Deposits
The warning memo to the Ford dealers—that was originally screenshot and posted on the F150Gen14.com forum before it was deleted at the request of Ford—is more of a way to protect the brand from negative reviews from customers after much of the debacle from new Bronco sales. That is, customers put up a deposits to reserve their new Ford 4x4s on Ford's site only for franchise dealers to come back and demand more money before they would sell that customer a new Bronco.

Ford already has a tool on their franchise dealer agreement under "Paragraph 6(i)" that states: "The Dealer shall conduct dealership operations in a manner that will reflect favorably at all times the reputation of the dealer, other company (Ford) authorized dealers, the company, company products and trademarks and trade names used or claimed by the company or any of its subsidiaries." This includes a provision that the dealer "shall avoid in every way any 'bait,' deceptive, misleading, confusing, or illegal advertising or business practices." Any dealer caught doing this by Ford will have their allocation of F-150 Lightnings "redirected" for the entirety of the 2022 model year.

Scalper Prevention
A later portion of the Ford memo answers the potential scalper issues seen with many limited products, be it by design or by supply issues. The "No-Sale Provision" laid out by Ford prevents new owners of the 2022 F-150 Lightning from immediately reselling their new truck after getting it from the dealer. Ford said its dealers may add the following paragraph to their closing documents or as a new, standalone document.

"Purchaser hereby agrees that it will not sell, offer to sell, or otherwise transfer any ownership interest in the vehicle prior to the first anniversary of the date hereof. Purchaser further agrees that seller may seek injunctive relief to prevent the transfer of title of the vehicle or demand payment from purchaser of all value received as consideration for the sale or transfer." In other words, you buy the Lightning, you're stuck with it for a full year from your purchase date. It's a similar solution tried by Ford for the GT supercar, but we also know how that actually worked.

However, the one problem Ford didn't address in this letter? Anti-consumer markups. We understand the need for markup due to market demand and that it's a part of the capitalist marketplace. It's the markup of nearly half or even double the price of MSRP is what ruins the dealership experience for consumers and gives the biggest blackeyes to the automakers. This also needs to be curved, but it seems like this isn't a priority for any OEM with a franchise dealership model, at the moment. So prepare to possibly pay more for your Lightning, but not in the form of extra deposits or the like.

Now only if they can do something about the crazy ADM that people had already paid. Maybe put in a max amount to charge over MSRP, etc.

Wow, that's.... that's something. Maybe Ford is serious about trying to keep excessive price gouging under control.

Lmao…. So now Ford is telling customers who purchased what to do. WTF.

Charge your ADM, just don’t tell the customer about it, let them order, and when they receive their Lightning have them sign a contract saying they are not allowed to sell their Lightning for 1 year. WTF

F150ROD said:

Lmao…. So now Ford is telling customers who purchased what to do. WTF.

Charge your ADM, just don’t tell the customer about it, let them order, and when they receive their Lightning have them sign a contract saying they are not allowed to sell their Lightning for 1 year. WTF

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That would only be binding to the customer selling the truck to that dealer lol

techguydave said:

Wow, that's.... that's something. Maybe Ford is serious about trying to keep excessive price gouging under control.

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To me it sounds like they are telling dealers to stop telling customers to pay ADM or lose their reservation. They are not telling dealers not to charge more than required. They are also telling dealers to have customers sign a piece of paper saying they won’t sell their Lightning for 1 year, am I reading this wrong?

F150ROD said:

Lmao…. So now Ford is telling customers who purchased what to do. WTF.

Charge your ADM, just don’t tell the customer about it, let them order, and when they receive their Lightning have them sign a contract saying they are not allowed to sell their Lightning for 1 year.

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Yes this is common - I had to sign a similar document when I got my BMW X5 (E70) when it became the rage to own, then resell it at a huge profit to an overseas buyer who in turn got it exported to another country.

Apparently, these US spec cars would end up in foreign countries and the service dept could not work on them due to different software as well as equipment.

Very glad to see them nip the extra reservation fees in the bud. I like the idea behind the no resale provision, but a year seems a little harsh. If you hate the car or for some financial reason need to get rid of it, you shouldn’t have to fight some contract. Maybe trading it back in to a dealer would be okay.

F150ROD said:

To me it sounds like they are telling dealers to stop telling customers to pay ADM or lose their reservation. They are not telling dealers not to charge more than required.

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In this notice it does use that specific example, but the language overall reads more broadly to me, and the paragraph quoted talks about bait, which in my mind includes the "$0 on order but $5k suddenly at delivery" tactic.

techguydave said:

In this notice it does use that specific example, but the language overall reads more broadly to me, and the paragraph quoted talks about bait, which in my mind includes the "$0 on order but $5k suddenly at delivery" tactic.

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If it included that then I am all for it. But it doesn’t sound like it the way I am reading this. We will see what happens. I am sure there are plenty of people purchasing in order to resale.

Peter P said:

Bulletin just sent out this morning to Ford dealers from Corporate ??

View attachment 35786

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I'm glad that Ford corporate is paying attention to the warped market for these things, but how on earth would they enforce and monitor the no-resale provision?

Love to see a bit of pressure from Ford, definitely feels like the slimier dealerships walk right over corporate. It does hurt their image, and if I had any games from my dealership I'd be cancelling and walking away permanently.

If I were to guess, the No-Resale provision is less about catching violators and much more about avoiding potential resales through the ever-present contractual clause over people's heads. It also seems to be optional by each dealer, meaning it's more of a triage tool than punishment.

With the no sale provision similar to what they do with the Ford GT I would expect a bunch of people to now have to seriously consider if they wanted this truck 100%.

Ford and Chrysler both have had these “provisions” on sales for quite a few of special interest vehicles.
I believe GM may have done this with the Camaro as well.
people were buying these and were promptly reselling at an exaggerated markup.
If I wanted a Demon, and had the means to pick up someone’s markup, I’d go ahead and buy it.
All Ford is saying, if you want it, buy it and hang onto it for a bit before trying to profit from it.

Bippers said:

With the no sale provision similar to what they do with the Ford GT I would expect a bunch of people to now have to seriously consider if they wanted this truck 100%.

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I know I do... even though I currently have a nice 2021 Lariat PB at the moment.