AMD or Order
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February 13, 2022 – ADM or Order?
When I first founded evfinder.com I was an ICE car driver who thought that electric vehicles were a good solution to the pollution issues caused by ICE cars. I tried to lease an EV1 but I was an apartment dweller with nowhere to install a charger so my lease request was denied.
I began to realize how difficult it would be to own an electric car without somewhere to charge. My solution was a hybrid, it couldn’t be plugged in but at least it got really good fuel consumption. In 2012 I upgraded to a plug-in Prius but it was mostly driven as a conventional hybrid. Things began to change and public chargers became more and more common here in the Los Angeles area. More and more of the time my car was being driven on electric rather than using gas.
Then I moved into a house with a garage. Suddenly I was hardly ever using public charging anymore. I charge up the car after it has been used and I am ready for my next drive. BEVs are also becoming more common and EV range has gotten bigger and bigger so many cars can now do more than 200 miles on a charge.
I have been keeping my eye on the market for a while and really like the Mach-e Mustang but there is a long backlog of orders and current chip shortage is not helping. This weekend I decided to take a look at some other options. I found that the local kia dealership had a number of Niro EVs in stock. I went over there and was shown a Niro and asked if I wanted to take a test drive. I took a look at the sticker and the sales lady told me that they have a $5,000 ADM (Additional Dealer Markup) on this car. I decided to keep looking and walked out of the dealership.
My search led me to the local Ford Dealership. I noticed that they had a Mach-e and 2 Escape Plug-in hybrids in their inventory. I tried to contact a sales person that my stepson recommended but he didn’t return my calls or texts so in the end I ontacted another sales person. I was told that the Mach-e wasn’t for sale. As for the two Escape PHEVs they both had an ADM of $3,000 and the sales lady made it clear that negotiation wasn’t an option.
Then I had a thought. Costco and AAA both have auto purchase programs so I tried those. I went through both programs including EVs that I knew dealerships had in stock but in all cases I found that neither program found any cars that I was interested in, or even a couple that I knew were out of my price range. In all cases I came up with a message saying that they had no dealerships with a pricing agreement. Tesla, which is also outside my price range, is not included at all in these buying schemes as it does not use a dealership model.
I also hopped onto Autotrader to see If any dealers in the vicinity had vehicles in stock. I found a couple of VW dealerships that appeared to have Id.4 models in stock but when I contacted them it appeared that all they had was a demo model that was not for sale and were using them as bait to get orders for the car.
My search also turned up a dealer that appeared to have several Mach-e in stock and a dealer that had quite a few Kia Niro in their inventory.
I browsed the inventory of the Ford dealer and found a Mach-e that was just what I was looking for except the color which would have been my third color choice. I passed information saying I was interested in this car and asked for their sales price. The answer I got back was that they had a $7,500 ADM. Once again, I said no thanks.
Something similar went on at the Kia dealer. In this case it appeared that they had 26 Kia Niro in inventory so I thought it might be a good chance they would have little or no ADM but I was wrong, ADM was $9,000 for the Niro I liked. I emailed back saying no thanks.
At this point my wife said “you really want the Mach-e why don’t you just order the one you want and wait for it”. I told her that the local dealer had said 6-9 months but with the current situation it could be over a year, and she said “so what?”.
I went onto the Ford site and ordered the Mach-e I wanted and allocated the sale to our local Ford dealer who had already said they would honor the MSRP for vehicles ordered directly from Ford.
The following day I checked my emails and there was a reply from the salesman selling the Kia Niro that said “If I could get you MSPR could you pick the car up tonight?” Since it was already the following day, I thanked him and told him I had decided to wait for a Mach-e I had on order.
On Friday I got an email from the internet sales manager at my selected dealership asking me contract them right away as they couldn’t find my reservation. I emailed back giving them the order number and got an email back saying they had my order and assigning a sales person who would call me soon. I don’t exactly have a warm fuzzy feeling at the moment although both my wife and stepson have had good experiences with this Ford dealership which is why I selected them in the first place.
If I was into conspiracy theories, I would think that the high ADM and long order times was a way to delay the move to electric vehicles. In reality the chip shortage and other supply chain shortages have created the perfect storm of supply issues that allow dealerships to make big money through exorbitant ADMs. Ford at least is fighting back telling dealers that they will withhold supply from those that jack up prices for cars ordered through them.
I opted not to pay AMD and wait in the long line to get a car. Other people are in more of a hurry to get their new vehicle so they decide to pay AMD. Not all dealerships add huge mark-ups but most do for cars that are in demand. At Ford dealerships there is also big markups on the Ford Bronco so it isn't just EVs that are getting the market. In a free market economy like ours the only way to stop huge markups is to not pay them but that is your choice.
For now, I am sitting at the end of a very long line of people waiting for their Mach-e order to be fulfilled. According to the tracker on the Mach-e forum I am something like 2053th in the queue but that number, of course, is likely to be just a small subset of the actual number of people waiting for cars. Given that Ford sold 2,370 Mach-e in the US during January then as long as the Forum tracker is greater than 10% of the actual reservation then I should be OK to get my car this year – I will update when I have more information.
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