True Stories From A Former Car Dealer #29: Blue Oval

True Stories From A Former Car Dealer #29: Blue Oval
 
 
Editorial Photo Credit: Linda Parton/Shutterstock.com
I will never forget it. It was in early 2000 I am pretty sure. I got a call from a high-ranking Ford executive one day with an ominous message. I was in Las Vegas for a dealer meeting as the Ford National Dealer Council Chairman. The exec who called was a man I trusted, and he was well liked by the dealer body as a whole.

He said Ford was going to put in some "standards" for all its dealers. There would be rewards for the best dealers. I was intrigued and then listened to the explanation that the dealers that met certain criteria would get a 1.25% of the invoice bonus on every car sold. I quickly did the math in my head and thought to myself "that is going to be a lot of money" since I had great customer satisfaction numbers, and was a big volume dealer.

Then the bombshell dropped: The exec said: "We are adding 1% to the invoice price of every vehicle to cover the cost." So the bottom line was Ford was raising the cost of every car by 1%, but the dealers that performed well could earn the 1% back, plus a .25% bonus. At the time, the bonus amounted to about $250 per car, but Ford did not raise the MSRP, so the margin from dealer cost to the list price was narrowed.