First discovered by CarsDirect, Ford sent letters to its dealer network this week outlining a few big changes, and two are less than desirable for customers: price hikes for 11 models and the elimination of almost every rebate on its 2021 lineup. However, those looking for many out-of-stock models will benefit from a $1,000 "Retail Order Bonus Cash Certificate" through July 6. (Sorry, Bronco and Mach-E buyers; those two hot tickets aren’t included.)
Overall, the price increases aren’t terrible, ranging from $250 for an Explorer, Ranger, Transit, or Super Duty truck; $500 for an Edge; and $680 for a Mach 1 Mustang. Keep in mind, though, that some vehicles had already seen a price increase earlier this year. For instance, the 2021 Edge price rose by $1,000 on April 1.
As CarsDirect reported, Ford says in the letter about rebates that "Retail Customer Cash, Retail Bonus Cash, FMCC Bonus Cash, Select Inventory (SIP) Cash, all Series/Trim/Package incentive level variations, and the myriad of APR offerings on most 21MY vehicles lines will be eliminated" to make way for a "more consistent, simplified incentive structure." On the incentive front, the $1,000 bonus for out-of-stock vehicles is double what it has been in the past. With a chip shortage and low inventory challenges, Ford is upping the ante to keep customers happy while they wait.
The bottom line is to read the fine print on the total sales number when buying a Ford right now. A positive takeaway is that the structure will be simplified, making it easier to know exactly what you’re paying. On the other hand, if you have purchased a Ford in the past and you’re accustomed to chewing down the price based on rebates and inventory bonus cash, you’ll want to adjust your expectations.
A decade ago, retailer JC Penney hired a new CEO and subsequently eliminated its popular coupons in favor of “everyday low prices.” This strategy proved to be disastrous for the company, as they discovered that instead of making things simpler, buyers didn’t feel the same satisfaction as they did using a discount coupon. Sales fell quickly. Time will tell if Ford buyers feel the same way about the new pricing structure, but the way vehicles are selling right now, it's not likely to stop them.
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