Quote from another thread---
Shelby 500's
The market on the 2007 Shelby 500 is still hot in the southwest region(Texas-Oklahoma). They are still bringing $15,000 over MSRP as of this week and I know of two that sold this week. Most dealers are getting their last 2007 models. No one knows what the market will be on 2008's, I think the market will stay high on them. 15 over is between $58,570 and $ 58,800 loaded but remember Shelby 500 Hertz cars with 9-10,000 miles are still bringing 55-58 ar Ford auctions. Its very weird! Customers are willing to pay those prices. TGH Ford Dealer
End quote
The following is written by ex-auto dealer Chip Beck.
Gentlemen,
I am no longer an auto dealer and don't have any dog in this fight but after reading many complaints about "gouging" dealers selling their GT500's for $20,000 over MSRP I feel compelled to point a couple of things out. I too wanted a GT500 at MSRP and I have many friends who are Ford dealers. Every one of them was sold out this year and well into 2008 at 20K over MSRP. Here's a few facts (not opinions) to keep in mind.
1. There are only two ways to allocate any scarce commodity, with a price or with a line. In a free market everything is available at all times if the price can seek it's own level. If a lower price is imposed the product sells out, a line forms and unavailability and long wait times result.
2. MSRP stands for Manufacturers "Suggested" Retail Price, not the Dealers Maximum Allowable Price. When you pay less than MSRP you are not "gouging" the dealer. If you choose to pay more than the MSRP because a model is scarce the dealer is not "gouging" you. Far more cars are sold below MSRP than above MSRP.
3. The dealers do not set prices above or below MSRP, WE DO!! Only buyers and the marketplace can set prices. Your local Ford Dealer is free to mark up his Explorers $20,000 over MSRP but none will sell at that price. Indeed right now none will sell at $1000 below MSRP. Buyers demand and get $2000+ less than MSRP. Dealers are free to sell GT500's at MSRP and they will sell the 5 to 8 a year they are allocated in one hour. Then the product is completely unavailable from that source. This would be as stupid as selling your home for 1.5 million dollars when several buyers are ready to pay you 2 million dollars.
4. Ford Motor Company want's to build and sell as many cars as it can. The 6 speed transmisson in the GT500 and to a lesser extent the hand built engine are the choke points limiting production right now. Until availability of these items eases the demand for these cars will outstrip supply and that brings us back to the ONLY TWO WAYS TO ALLOCATE A SCARCE PRODUCT. We can get in line and the first 10% of the line gets a GT500 at MSRP and the back 90% of the line NEVER gets one (but hey, at least you never get one at a great deal!!) OR, we the buyers decide who wants one the most by bidding the price to the market level. The car is always available at a price that THE BUYERS SET BY PAYING IT!!! Nobody is ever forced to pay over MSRP for a car. The laws of economics are as certain as the law of gravity. Freedom is a powerful thing, God bless America.:cheers
Chip
Shelby 500's
The market on the 2007 Shelby 500 is still hot in the southwest region(Texas-Oklahoma). They are still bringing $15,000 over MSRP as of this week and I know of two that sold this week. Most dealers are getting their last 2007 models. No one knows what the market will be on 2008's, I think the market will stay high on them. 15 over is between $58,570 and $ 58,800 loaded but remember Shelby 500 Hertz cars with 9-10,000 miles are still bringing 55-58 ar Ford auctions. Its very weird! Customers are willing to pay those prices. TGH Ford Dealer
End quote
The following is written by ex-auto dealer Chip Beck.
Gentlemen,
I am no longer an auto dealer and don't have any dog in this fight but after reading many complaints about "gouging" dealers selling their GT500's for $20,000 over MSRP I feel compelled to point a couple of things out. I too wanted a GT500 at MSRP and I have many friends who are Ford dealers. Every one of them was sold out this year and well into 2008 at 20K over MSRP. Here's a few facts (not opinions) to keep in mind.
1. There are only two ways to allocate any scarce commodity, with a price or with a line. In a free market everything is available at all times if the price can seek it's own level. If a lower price is imposed the product sells out, a line forms and unavailability and long wait times result.
2. MSRP stands for Manufacturers "Suggested" Retail Price, not the Dealers Maximum Allowable Price. When you pay less than MSRP you are not "gouging" the dealer. If you choose to pay more than the MSRP because a model is scarce the dealer is not "gouging" you. Far more cars are sold below MSRP than above MSRP.
3. The dealers do not set prices above or below MSRP, WE DO!! Only buyers and the marketplace can set prices. Your local Ford Dealer is free to mark up his Explorers $20,000 over MSRP but none will sell at that price. Indeed right now none will sell at $1000 below MSRP. Buyers demand and get $2000+ less than MSRP. Dealers are free to sell GT500's at MSRP and they will sell the 5 to 8 a year they are allocated in one hour. Then the product is completely unavailable from that source. This would be as stupid as selling your home for 1.5 million dollars when several buyers are ready to pay you 2 million dollars.
4. Ford Motor Company want's to build and sell as many cars as it can. The 6 speed transmisson in the GT500 and to a lesser extent the hand built engine are the choke points limiting production right now. Until availability of these items eases the demand for these cars will outstrip supply and that brings us back to the ONLY TWO WAYS TO ALLOCATE A SCARCE PRODUCT. We can get in line and the first 10% of the line gets a GT500 at MSRP and the back 90% of the line NEVER gets one (but hey, at least you never get one at a great deal!!) OR, we the buyers decide who wants one the most by bidding the price to the market level. The car is always available at a price that THE BUYERS SET BY PAYING IT!!! Nobody is ever forced to pay over MSRP for a car. The laws of economics are as certain as the law of gravity. Freedom is a powerful thing, God bless America.:cheers
Chip
