Is there ANY chance that Flood etc do such a large volume in warranty sales that Ford gives them volume pricing??????

Ford does make money on it and they must have room to move if Flood sells say, 5000 units?

 

I suspect that your theory is solid, I know that in the retail gun business, dealer's buy from wholesalers at a published price visible only to the dealer. But high volume dealers get a lower wholesale price than the average wholesale buyer .

 

That was my theory too, but again, if you read my comments, I reached out to Ford directly and Flood gets the warranty for the same cost I do, so unless Ford misrepresented something to me, that's not the case. The pricing I use to quote is the same that Flood uses. Otherwise, I'd be setting up the same structure for us and hitting high volume.

As for the loss leader concept, I would suspect that if it was break even, but there is no gain to beating everyone and losing $50, why not just break even and still be ahead of the market? If I matched Floods price, I would lose money. And while it's easy to buy a warranty on the internet, buying a truck from across the country CAN NOT be absorbed in volume when it comes to shipping cost compared to what your local market can hit. And would ANYONE who buys a warranty online travel distance to spend MORE on a truck? That business model simply doesn't make sense, so I am missing something else to make it make sense. I sell trucks throughout my region and normally its because I have something specific in stock for my commercial stuff. I don't sell too many regular pick up trucks out of state because they can get the same thing down the street.

Yes, commercial policies quote out $250 higher.

 

Unless you actually saw an invoice for what Flood is paying for those service plans, I would not trust that your Ford rep either has or is giving you correct information.

 

Why not? It would be in Fords great interest for me to have a higher goal in mind for selling more of their products. They certainly don't hide other volume incentives from us.

 

It wouldn't be necessarily that he's hiding anything from you, just that those online places may have some other deal in place that may be need-to-know. This isn't too far from you as a dealer not advertising to everyone exactly what deals you have been selling vehicles for.

 

If there is no hidden fees, and they are making money and no reason to believe that there not why would they bother if they don't, gotta pay someone to handle the paperwork.
Then there has to be some kind of sweetheart agreement between ford and mega seller's not available to everyone or even known about by everyone outside of said mega seller's and Ford
top management
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I'm not sure what you mean by this?

 

Right, but it's not a commercial trust. It's just the trust my wife and I have, kind of like a will.

 

What I mean is that you wouldn't put a sticker on your showroom window advertising "every F-250 in stock $700 under invoice!" just because you worked a deal at that price for one or two customers. The totality of your deal is much more than just the selling price of the vehicle.

Likewise, it is quite possible that the online ESP dealers have additional structures to their deals with FoMoCo that allow them to effectively get the service plans at a price much lower than a typical dealer allowing them to sell at such an incredible price.

I don't think you can just look at one portion of a deal and assume you know everything that went into it. Would you agree with that?

 

In most business most pay the same price. My distributor charges me the catalog price like anyone else that has a wholesale account...but, and I will my case as an example, I am a "Premium" account and I get an invoice that reflects a deeper discount and I also get volume discounts, but none of this shows up until I get my invoice or I talk direct with my rep.

Bottom line is we all pay same wholesale but some of us get discounts for volume and status as a customer. Does Ford do that for Flood, dunno, just sayin...

As for traveling to buy a truck or car, I do and have friends who do same same. My cost is the same if I buy at the dealer across the street from my house or a 1000 mi away. In FACT there are regional incentives in place that give me a better deal in that state vs maybe where I live at any given time.

I have taken many a plane trip from Denver to Seattle, San Fran, Idaho and many other cities over the years to pick up a car or truck. So if the deal is the same then my costs are plane, motel and food, in other words the same amount of money I would spend if it was (and is) a vacation. I flew to Denver to pick up a new Jeep, drove to Moab Utah, off road for a week, then drove home. On one trip my first date with a girl was to fly off to Nashville and picked up my ordered Corvette in Bowling Green then drove back to Miami.

I live near a little town of about 10-12,000 folks, the county pop is about 33,000 incl my little town. We have a MB dealer...yea! MB had a Gullwing SL that ran about $250k on the window, our dealer was the number 1 Gullwing dealer in the US, beating out such heavies as Beverly Hills MB, Dallas Park Cities MB. Most of the sales are to people across the US.

Fly and drive programs have been around at least since the early 70's I know of...my truck is a business write down and have bought at least 2 in distant cities, wife and I get to spend a few days alone on the road in a mini vacation, nothing rare.

 

Franz,
Could it be a regional thing? My dealer in CT showed me his cost on the computer and they matched what I gave him from Flood.

 

Regional incentives are based on your zip code, so if you traveled for one, and the dealer mistakenly gave it to you, they would get charged back by Ford. While I'm not saying it doesn't happen (I ran local rebates for a local company and forgot to re-run on their home office in Pittsburgh, so while I gave them the $500 rebate, Ford charged me back for it), that's a case of the dealer screwed himself and losing money, certainly not a business model.

I asked specifically about Flood and was told they pay the same as I do. It wasn't a quick response, but one that was reached and then they called me back about. It was a person at Ford I work with on a fairly regular basis.

Flood asks what state you live in, so that should be factored in. If you were already doing a deal with them, it's possible they took the $50 loss as a courtesy too. Actually, Ford doesn't ask what state the warranty is in, we just download the price builder from Fords site.

I didn't assume anything, I asked Ford if there were incentives that I could get if I reached certain volumes or if everyone was getting the service plans for the same amounts. I'll be inquiring more. As for the advertised price part, that falls apart simply because Flood DOES advertise for everyone at the same price, only it's a price other folks can not compete with. This isn't advertising every truck under invoice at $700, it's advertising it at $500 under invoice minus holdback. And while it might be possible to make a business model for this if you required in house financing or had high doc fees, it could not be sustained on it's own.

I'm just trying to figure it out as I'd love to be able to sell warranties like this, I think it would be a good promotion and with my own focus on commercial sales I'd stand a better per unit chance to convert it into a sale of a truck. I believe in selling lots and selling cheap!

 

Franz,
I wasn't clear when I wrote that they match. I mean that their prices were identical to Flood.

 

I purchased my SD in Jan. At time of purchase as a customer I bought an ESP plan but couldn't buy the EMP as dealer didn't sell it. I called Flood and tried to buy EMP 7/125000 7500 mile oil change and they would not sell to me as I didn't buy ESP there. Since I started working for the dealer where I purchased and after asking several time was able to get EMP last week. Found out it has to be purchased before 5 months/5km.