My Local Dealer Won't Match or Beat ESP Prices from Online Flood Ford or Ziegler Ford
 

You'd think they'd want to make something and not miss out on the sale, but a $625 difference is huge. Do Flood, Ziegler, and Genuine sell at a "Loss Leader"? I can't imagine they do as the chances they ever see the vehicle to work on it is slim to nil. Or do these dealers get special volume pricing???

Your dealer's Finance mgr probably makes 15% margin on the sale of the ESP package. Offer them slightly more than Flood pricing and you'll both feel good - them for the sale and commission and you for working with your local dealer.

So here's how it was explained to me. Those online companies sell at almost no profit in order to get what is essentially free money to use for 2-3 years. Think of it as them getting an interest free loan for 2-3 years. They sell to you and don't register your warranty ( so they don't have to pay for it) and then have your money to use as they please until (or if) they register your warranty.

Why does this matter... well, as long as you don't need the warranty before it gets registered you are fine. If you do need it and they haven't registered it then it should be as simple as it getting registered, obviously that will include the hassle and time of you making them do it. The problem is what happens if the dealership closes, goes bankrupt, etc... you now have no extended warranty. If someplace is using this method to get creative financing for themselves do you a) think they will register your warranty before you have to come after them for it or b) still be around when you need that warranty registered?

As I stated above, this is how it was explained to me. Is it absolutely true? I don't know. Is it possible? Absolutely, and it actually makes sense financially for those dealers who may be doing it. Is it good business? No, of course not.

Take this info however you see fit, I am not endorsing the idea, nor am I accusing anyone of doing this, I am simply passing on an explanation of the cheaper pricing as it was described to me.

That said, I used those numbers from a couple places and my dealer gave me a better deal (not as good as the ones shown on the online offers) that was within my window of price for the warranty so I purchased from my selling dealer.

I'm not looking for an argument or to tick anyone off, just putting out a scenario as explained to me in an effort to get everyone thinking on these deals from all angles. You do what you think is best and yes, a $600-$700 difference is a lot of money, even on an $80k platinum. Hope this thought process helps. If it doesn't then ignore it and do whatever you think is best.

I apologize for an pay typos or weird phrasing, iPads are not great keyboards. ��

Happy truck driving my friends!

My experience has been positive when purchasing ESP from online dealers. I just check with Ford Customer Service to verify my ESP is valid. I've never had an issue.

I've purchased both Ford and Lexus ESPs via phone from Jerry Johnson at Midwest superstore and never had a problem.
Midwest Superstore | New Ford, Toyota dealership in Hutchinson, KS 67502

The online dealers mentioned above are selling Ford ESP, not a fly by night outfit's product.
You purchase, it gets entered into Ford's system, done until you need it.
Valid at every Ford Lincoln dealer in North America.


Buy where you get the best deal. If your local dealer won't budge, so be it.

Ziegler and Flood both sell genuine Ford ESP contracts. My experience with out of state dealers selling ESPs at discount has been positive.

In the past I bought an ESP at significant discounts from Jerry Johnson at Midwest Supercenter and from Troy Dietrich at Greenfield Ford via phone and Internet. Both registered the warranty within a week and I received a warranty booklet/policy in the mail quickly. I call Ford Customer Service any time I have extended warranty to confirm. The only time a warranty was not recorded was when a local dealer did not report my sale of a CPO to Ford.

Unfortunately Florida no longer allows warranties written by out of State dealers.

I had a similar situation. My dealer could not come close to the price offered by Champion Ford (Ziegler and Flood were close on price). Saved about the same amount ($625 +/-). The Rep at Champion explained that they are able to offer lower pricing because they follow a high volume-low mark-up business model.

I priced out against Flood and from the example I picked (F350 diesel $0 ded, 5 yr/100k) they were $50 under my cost. I checked with my Ford rep and they did some hunting and confirmed that Flood is buying the warranty at the same cost as me. I don't have anyone at the dealer offering a reserve between Fords price and what I have (AKA my pricing is direct). So I would also not match Floods price, nor would I bother to break even on it, I'd need at least $100 over to bother.

My question to those who have purchased.... do they have any process or other fees? I don't see how or why they would sell at a $50 loss. I certainly understand why your local shop would pass on the "business". It seems something would have to be hidden somewhere.

BLUF: My experience with car dealers is, when it looks too good to be true it probably is, but just because it's not quite as good as it looks doesn't mean it's not still a really good deal.

My thoughts on Flood and Zeigler if they were breaking even:
They set up a website that is a marketing portal for their dealerships which requires no real human effort or input. If they can give away warranties to most of the country and be known in their area as the cheapest place then they'll pick up sales of the actual cars and trucks. However, they would have to at least break even for this to work, so I feel I'm probably missing something. Even if it was $50 profit, they'd rake in small change and build local regional rep to increase sales. Perfectly logical business model. It obviously falls apart at a $50 loss though, hence I'm curious what I'm missing. It's possible they get a bonus from Ford, but this wasn't mentioned to me when I asked my Ford rep. I'll grill him more next time he visits with me, we have some meetings that were postponed due to some snow.

I do not think they are simply not registering the warranties, and wouldn't tell you not to buy from them, I just don't know how they do it to break even with their marketed pricing.

I must have got lucky then. I priced through flood and champion both. I took screenshots in to my local dealer not expecting them to even be close. I figured I'd be buying online. To my surprise my dealer came in about $100 over. For that it was worth it to me, sold

Flood is not losing money on this, they sell nation wide, I bought from them for my '15 dually. I got paperwork from Ford, it was registered and a fully valid warranty. Later I traded in, I called flood and a few weeks later I got a check for a prorated amount, check was around $1200 or so, so it cost me a couple hundred bucks, check cashed and did not bounce.

Frantz.

I had a good friend who owned a small dealership in a one horse town (one stop light). Early in the year I flew out there to pick up my truck and after some some bird hunting over on his farm we headed over to the dealership to pick up my truck for my drive back to Texas. As I sat there in his office looking over his back lot I said wow, you have a lot of trucks out there, I guess ever farmer around here has bought one.

He laughed and said no, the ones out front are for the locals, the one in the back are for my customers across the US. I said WOW, you have that many folks buying from you from across the US? He said YOU DO! When you drive out, I will never see that truck again, I know I will see you, but not the truck. My overhead here is next to nothing, I own the land, the building and I use my own money to Floorplan. I have one full time Mech for a total of 3 employees here, me, my wife, my son...

My guess is that Flood makes a lot of $ off internet truck sales.

The LAST time I bought a vehicle in the town where I lived was in '73. Since then I want to buy I look around and try to find a place I want to go visit and try to find a dealer to work a deal with.

Not saying that is what or how Flood works it, because I don't know, just guessing the ext ins business into a lot more business...

None of that story helps explain how they advertise for $50 under cost.

I bought my extended warranty from Champion for less than Flood quoted online. I got paperwork that indicated it had been registered with Ford. However, I also got a call back from Champion when Ford realized I had registered my truck in the name of my trust. That cost me $250 more (I think).

I really tried to buy the extended warranty through my local dealer, even asking them to come within $100 of the Champion price. They declined and I bought from Champion. The dealership also tried to pass off their in-house warranty as a Ford warranty but I called them on that.

Frantz, I don't know that other than you saying they sell for $50 under cost and while I am not disputing your word on that as I certainly don't know, allow me to put on my business owner hat on.


In my business, I have a product that I sell for 5% below my cost, but I absorb it as its low volume (as compared to the rest of my products) and it turns sales in the rest of the product line and generates continued business on the internet.

But do I REALLY lose money? Yes and no. I work off business models as almost any legit business does. I build my selling price model like this: 33% to CoG, 33% overhead, 33% to gross profit. Based upon that I sell it a 5% less than the model calls for, I still make money, I just don't make as much money and I certainly could run my business based upon that.

Maybe that is how Flood does it, who knowns, I certainly don't...

When I bought my F450 I too brought in the "Flood" on-line quote and they could not even come close to the on-line quote. We talked for awhile with the head financial guy there as well and they would have had to do it at cost or below cost to meet the on-line quote. Ultimately they came down a bit and said without the ability to make a profit of some sort they would pass on the "opportunity". They are a small business in a small town employing local mechanics, sales people, finance people etc. As a businessman I understand their dilemma. I spent the extra few hundred bucks locally and feel good about it.