Jim Farley comments about ADM during 4th quarter conference call

[Maquis]

I don't think Ford/Farley are concerned nor can they do anything about what price a dealer sets for their inventory.

I think there may be some concern, but you’re right, not much they can do about sales from dealer stock. As far as the Lightning goes, the only sales from inventory for the next couple years will be demo units with 4000+ miles on them or customer orders that get cancelled.

How do you like your 4030? Is it FWA? I’m going to need something like that in the next year or so.

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[p52Ranch]

I think there may be some concern, but you’re right, not much they can do about sales from dealer stock. As far as the Lightning goes, the only sales from inventory for the next couple years will be demo units with 4000+ miles on them or customer orders that get cancelled.

How do you like your 4030? Is it FWA? I’m going to need something like that in the next year or so.

I love the 4030. Yes MFWD. Open station (so I can get under trees and through the woods). It has a bit of a straddle over the transmission tunnel which keeps it 8" lower than the new ones with a flat platform. Sometimes I wish the Front Loader had a bit more capacity (It really strains with a 3500 pound pallet of Quikrete). It handles a 15' Batwing with no problems.

 

[Deleted member 9341]

I expect with a $30k ADM to a vehicle that already costs $20k more than for a similarly optioned ICE F-150 will have them losing most every customer.

????

 

[Maquis]

I love the 4030. Yes MFWD. Open station (so I can get under trees and through the woods). It has a bit of a straddle over the transmission tunnel which keeps it 8" lower than the new ones with a flat platform. Sometimes I wish the Front Loader had a bit more capacity (It really strains with a 3500 pound pallet of Quikrete). It handles a 15' Batwing with no problems.

The batwing was one of my concerns. I run ours with an old IH 856 which is quite a bit more HP and it’s a pretty good load. I really need a new set of blades on it!

 

[PungoteagueDave]

All that is true. However, during the early days of MME deliveries, a handful of dealer attempted to add ADM even though it wasn't part of the initial order. When customers complained to Ford, Ford put a kibosh on that. My dealer attempted to charge me for unrequested add-ons (nitrogen tires, wheel locks, etc), but they cave on that fairly quickly. My dealer also attempted to charge me for $1,000 VLT instead of $40 that EVs were entitled to at that time. They also tried to charge me $499 doc fee instead of $100 max on X-plan.

Yah, gotta stay sharp in the finance closing room. I'm a cash buyer, so they always groan when I say, "Sorry, I'm your worst customer, no loan fees, interest haggling, no extras, no added warranties, can't track em, don't keep em long enough, just writing you a check today, so lets make it simple. Here's a tin of my wife's homemade cookies."

They may still try the screen warranty, paint protection, interior magic song-and-dance for 30 seconds, until hearing "What part of no extras didn't I say? What's the total again?" The only give-up that I've learned to live with is up to $500 on dealer processing fees, whatever that is. And I only began caving on that after a salesman proved to me that he had to pay it on his own recent delivery - that there were no exceptions at that dealership.

I do have a bit of sympathy for the dealers - having several as clients in an early career as a CPA, I saw how brutal the P&L numbers were - and no matter how flashy the brass-and-glass facility, every car dealer, even most chains, are really small businesses. The every-deal-is-unique element adds a buyer-beware gamesmanship sleaziness that kinda sucks, and makes for disadvantaged consumers, especially those who borrow money to buy vehicles, something I'll never understand. Almost no one gets wealthy in the car business, and plenty go bankrupt.

 

[Deleted member 9341]

Yah, gotta stay sharp in the finance closing room. I'm a cash buyer, so they always groan when I say, "Sorry, I'm your worst customer, no loan fees, interest haggling, no extras, no added warranties, can't track em, don't keep em long enough, just writing you a check today, so lets make it simple. Here's a tin of my wife's homemade cookies."

They may still try the screen warranty, paint protection, interior magic song-and-dance for 30 seconds, until hearing "What part of no extras didn't I say? What's the total again?" The only give-up that I've learned to live with is up to $500 on dealer processing fees, whatever that is. And I only began caving on that after a salesman proved to me that he had to pay it on his own recent delivery - that there were no exceptions at that dealership.

I do have a bit of sympathy for the dealers - having several as clients in an early career as a CPA, I saw how brutal the P&L numbers were - and no matter how flashy the brass-and-glass facility, every car dealer, even most chains, are really small businesses. The every-deal-is-unique element adds a buyer-beware gamesmanship sleaziness that kinda sucks, and makes for disadvantaged consumers, especially those who borrow money to buy vehicles, something I'll never understand. Almost no one gets wealthy in the car business, and plenty go bankrupt.

Spot on. Most people have absolutely no clue of the subtle levers that can be pulled on financing behind the scenes

 

[Arthur]

although limited data, 2 out 3 dealers I contacted confirmed ADM so I don't believe this 10% data.

 

[Maquis]

although limited data, 2 out 3 dealers I contacted confirmed ADM so I don't believe this 10% data.

Most of us aren’t buying the 10% figure.
That’s the kind of number an executive tosses out to the analysts so they don’t ask any follow-up questions.?

 

[Ruination]

Yah, gotta stay sharp in the finance closing room. I'm a cash buyer, so they always groan when I say, "Sorry, I'm your worst customer, no loan fees, interest haggling, no extras, no added warranties, can't track em, don't keep em long enough, just writing you a check today, so lets make it simple. Here's a tin of my wife's homemade cookies."

They may still try the screen warranty, paint protection, interior magic song-and-dance for 30 seconds, until hearing "What part of no extras didn't I say? What's the total again?" The only give-up that I've learned to live with is up to $500 on dealer processing fees, whatever that is. And I only began caving on that after a salesman proved to me that he had to pay it on his own recent delivery - that there were no exceptions at that dealership.

I do have a bit of sympathy for the dealers - having several as clients in an early career as a CPA, I saw how brutal the P&L numbers were - and no matter how flashy the brass-and-glass facility, every car dealer, even most chains, are really small businesses. The every-deal-is-unique element adds a buyer-beware gamesmanship sleaziness that kinda sucks, and makes for disadvantaged consumers, especially those who borrow money to buy vehicles, something I'll never understand. Almost no one gets wealthy in the car business, and plenty go bankrupt.

You were a CPA and don't understand why people would take a 1.9% loan?

 

[jfried]

I think there may be some concern, but you’re right, not much they can do about sales from dealer stock. As far as the Lightning goes, the only sales from inventory for the next couple years will be demo units with 4000+ miles on them or customer orders that get cancelled.

How do you like your 4030? Is it FWA? I’m going to need something like that in the next year or so.

To me, Farley's concern seems more towards dealers charging additional fees, or changing terms, after a buyer has already ordered/accepted the car -- wanting to maintain consistency throughout the process, and avoiding the media storms when a guy's Bronco that he's waited on for 6 months shows up and gets told he needs another $15k to buy the car.

Perhaps that is where the 10% number comes in... or maybe he adds those dealers with ones who are ADMing "everyday" vehicles.

 

[PungoteagueDave]

You were a CPA and don't understand why people would take a 1.9% loan?

I teach graduate-level finance at a major university and believe that car loans are paying the man, full stop. A subsidized 1.9% loan is not the all-in cost after alternative incentives. And that is no longer available. 3.2% is the lowest unsubsidized current auto loan borrowing rate. Car payments are almost always a bad idea except in rare business lease circumstances. They encourage people to far overstep their actual means. The question I ask is this - if you had $x (price of vehicle) in your pocket today, would the best use be to buy the vehicle, or to pay down other debt, invest the money and take a loan, make a real estate down payment, etc.? Way too many live lives of monthly payment slavery and as a result have limited life flexibility in terms of geographic and job alternatives. The first lesson I taught my kids was to never borrow money for anything except real estate - and then only in specific circumstances. I suggest paying for vehicles using a sinking fund approach - this is what each of my kids do - buy used cars and put away the effective monthly payment on a new car until you have enough to make the purchase in cash.

My son went to the Naval Academy, and we became friends with many of his classmates, have been dismayed to see a lot of them over the last twelve years since graduation blow their finances up buying Vettes, fancy pickups, Teslas, using interim bonus money, sometimes $20 or $30k, as down payments on $100k vehicles, seeing them depreciate to nothing with upside down loans - smart folks now making $140k as LT CDRs without a pot to p*ss in due to financial mismanagement - mostly around bad vehicle choices and related loans. Maybe 10% of his graduating class, on the other hand, took a fiscally responsible route, so we know a few with $500k in the bank/invested, and who own homes (some multiple rentals due to transfers) but drive basic vehicles, replaced every ten years or so.

 

[Deleted member 9341]

I teach graduate-level finance at a major university and believe that car loans are paying the man, full stop. A subsidized 1.9% loan is not the all-in cost after alternative incentives. And that is no longer available. 3.2% is the lowest unsubsidized current auto loan borrowing rate. Car payments are almost always a bad idea except in rare business lease circumstances. They encourage people to far overstep their actual means. The question I ask is this - if you had $x (price of vehicle) in your pocket today, would the best use be to buy the vehicle, or to pay down other debt, invest the money and take a loan, make a real estate down payment, etc.? Way too many live lives of monthly payment slavery and as a result have limited life flexibility in terms of geographic and job alternatives. The first lesson I taught my kids was to never borrow money for anything except real estate - and then only in specific circumstances. I suggest paying for vehicles using a sinking fund approach - this is what each of my kids do - buy used cars and put away the effective monthly payment on a new car until you have enough to make the purchase in cash.

My son went to the Naval Academy, and we became friends with many of his classmates, have been dismayed to see a lot of them over the last twelve years since graduation blow their finances up buying Vettes, fancy pickups, Teslas, using interim bonus money, sometimes $20 or $30k, as down payments on $100k vehicles, seeing them depreciate to nothing with upside down loans - smart folks now making $140k as LT CDRs without a pot to p*ss in due to financial mismanagement - mostly around bad vehicle choices and related loans. Maybe 10% of his graduating class, on the other hand, took a fiscally responsible route, so we know a few with $500k in the bank/invested, and who own homes (some multiple rentals due to transfers) but drive basic vehicles, replaced every ten years or so.

Spot on. I’ve been genuinely shocked at most of the comments on these boards with respect to how people are paying for vehicles...and the terms under which they’re paying for them. Mind boggling. I would argue that even 0% financing can be a bad deal on a depreciating asset if it sucks you into overspending and unwittingly robbing yourself of future financial security. As you said, many people far overstep their means…sadly too many don’t seem to know it until it’s too late to remedy those missteps in life.

 

[Ruination]

I teach graduate-level finance at a major university and believe that car loans are paying the man, full stop. A subsidized 1.9% loan is not the all-in cost after alternative incentives. And that is no longer available. 3.2% is the lowest unsubsidized current auto loan borrowing rate. Car payments are almost always a bad idea except in rare business lease circumstances. They encourage people to far overstep their actual means. The question I ask is this - if you had $x (price of vehicle) in your pocket today, would the best use be to buy the vehicle, or to pay down other debt, invest the money and take a loan, make a real estate down payment, etc.? Way too many live lives of monthly payment slavery and as a result have limited life flexibility in terms of geographic and job alternatives. The first lesson I taught my kids was to never borrow money for anything except real estate - and then only in specific circumstances. I suggest paying for vehicles using a sinking fund approach - this is what each of my kids do - buy used cars and put away the effective monthly payment on a new car until you have enough to make the purchase in cash.

My son went to the Naval Academy, and we became friends with many of his classmates, have been dismayed to see a lot of them over the last twelve years since graduation blow their finances up buying Vettes, fancy pickups, Teslas, using interim bonus money, sometimes $20 or $30k, as down payments on $100k vehicles, seeing them depreciate to nothing with upside down loans - smart folks now making $140k as LT CDRs without a pot to p*ss in due to financial mismanagement - mostly around bad vehicle choices and related loans. Maybe 10% of his graduating class, on the other hand, took a fiscally responsible route, so we know a few with $500k in the bank/invested, and who own homes (some multiple rentals due to transfers) but drive basic vehicles, replaced every ten years or so.

Well, Ford financing is currently sub 2.

You're upside down no matter what. Well, normally. The car doesn't get more valuable.

Paying off a loan is going to be worse than investing that money over it's life Everytime at these rates.

Those damn poors. 90% chance you came from money.

Really, which one of your 10 luxury vehicles was a smart financial investment?

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