Dealer Requested Deposit Amount

[snoopcat]

I visited a local Ford dealership today to look at colors.
The rep told me that they never ask for a deposit when ordering a car. Especially one that will take possibly 6 plus months to get. He was unaware that Ford was requiring additional money over the $100.
So who really knows what is true. I personally would not give any money to any dealer. What are they offering in return? If Ford can’t ship vehicle for some reason they get to use your money. If they made some guarantee that the Bronco would show up at a certain date and they would refund money with additional monies paid for missing delivery date I would consider. They won’t do that.

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[jasminekd]

I feel like $500 is justifiable. I'm thinking of it kind of like a Kickstarter lol

 

[Hkak45]

You miss the whole point of my comments. I know a deposit is required. FMC stated to me it would likely be $500. If you understand NPV you would be better off with your additional money in your bank account not theirs. That is my economics 101 lesson to you for the day.

If you are throwing several thousand yes I would agree with you. (Other than in a bank account would not be smart as not earning interest to make it worth it) but if someone is saying they don’t want to do $500-$1000 there would be no measurable wealth asset from an account that can make gains to be worth it in less than a year time frame.

 

[LSBronco13]

If you are throwing several thousand yes I would agree with you. (Other than in a bank account would not be smart as not earning interest to make it worth it) but if someone is saying they don’t want to do $500-$1000 there would be no measurable wealth asset from an account that can make gains to be worth it in less than a year time frame.

To be clear "Bank account" was not a literally a general bank low interest account. I used the statement as it's my money. I want to keep more of it.

 

[LSBronco13]

To answer your question (I placed it in bold); It is not cheaper in the long run, at best it is a wash. A year from now when your Bronco shows up at the dealer, the $1000 you put down will have had a years worth of inflation against its purchasing power. Forecasts are below;

2021	1.6%	2.0%	Expansion (5.0%)	Forecast: Core rate is 1.5%
2022	1.7%	2.0%	Expansion (3.5%)	Forecast: Core rate is 1.7%

If you give the $1000 of buying power today to the dealer instead of into a down payment at time of sale in a year, you are essentially losing $17 of purchasing power over that year instead of your dealer. Sure, not a big deal, however if you have any credit card or other interest bearing debts, the interest on those might be as high as $220 for, say...any credit card balances adding up to $1000 at 21.99% for a year Those would be direct costs. The opportunity cost of lost investments with tax considerations and liquidity concerns are beyond the scope of this post, but it does exist.

Hopefully this encourages you to educate yourself on the time value of money. There is no shame in fiscal ignorance, nobody is born knowing these things, so no need to feel bad about assuming that people not wanting to tie up money for a year are unable to come up with the money. They might just understand the value of it better than you do is all.

-privileged person

Christ. You missed the whole point. "Bank Account" meaning my money. Not literally in a low interest bank account. I invest in high yield returns not a general bank account. You don't have to give someone anymore down payment than you have to. FMC statement was $500. Why are you defending a car dealer?

 

[Bronc-O]

I switched to Stephens this week. When I called and payed the $100 deposit I asked them about their stance on further deposit upon ordering and they will not require any additional money. I was surprised. I would have put down $1000 or so no problem but it’s good to see they didn’t require it. I’ll keep that in the bank another year as I’ll. E late availability delivery thanks to the manual Squatch.

It seems pointless to ask for a deposit that's fully refundable if you back out. It just further complicates things.

 

[Bronc-O]

I don't want to put down a deposit, but a reasonable deposit is a good thing. I would say $500 to put in an order reasonable. Ford knows that 50% of reservations are going to fall through and it's better to weed those out before the orders go in so that people who are actually going to buy one get theirs's and they don't build a bunch of Broncos that end up as dealer stock. If my dealer was asking for more than $1000, I'd probably start shopping around.

I would say it's reasonable if it were the typical 6-8 week delivery time frame. In this case, it will be more like 6-8 months. That's a long time to be tying up someone's money.

 

[DUSTYcazOREGON]

Over the years a deposit when ordering has been SOP. If your dealer does not require one, bonus for you. If they do....as long as it's refundable and you are a serious buyer...it should not be an issue. I am in... I will gladly give them a deposit.

 

[Bronc-O]

These folks complaining about $500-$1000 down are the ones who will finance the whole entire thing and wonder why they lost money when they trade it in a year later. I for one want to put a down payment on the Bronco... even if the dealer doesn’t require one because that gives a little more concrete evidence that it won’t be sold underneath you. For all those that don’t put anything down just be careful because some scumbag dealers may decide they don’t want to give it to you and sell it for ADM to someone else.


I know ford has said there will be “penalties” for that but no one has proof of that or what the penalties for not selling to the actual person is. For all we know it could be $500 fine when they just made $10k on the vehicle so they won’t care.
If you can’t afford to put $500-$1000 down on a brand new vehicle for deposit please rethink your decision to purchase this right now. Financially your future self may thank you.

I think this is why dealers won't tell us what the penalty really is. Whatever it is, they still profit from cancelations.

 

[pan-y-cerveza]

To be clear "Bank account" was not a literally a general bank low interest account. I used the statement as it's my money. I want to keep more of it.

Me too. But if a dealer requires it, and I want a Bronco, then so be it. You already put down $100 for a lot longer than you'll put down another deposit. It's less money they can use, and less money you can use, but it`s still money.

If I were the dealer I would do the same.

If you have strong objections to deposits then find a dealer who doesn't require one, or buy a vehicle that's on the lot, or wait for a Bronco to land on lots. Simple as that.

 

[linbackr99]

I understand the deposit request - 500 to 1000 seems reasonable - my dealership is not asking me for a deposit on the simple premise, as mentioned before, if my Bronco shows up and (a) it is not what I expect or (b) the trade value/bottom line are not agreeable and I walk away they will be able to then sell the vehicle for up to 10% above MSRP. The dealership is literally better off if people walk away from their reservations. Personally, by the time I am finished I expect to finance about 25k on the WT with all the bells . . . and am real confident this dealership, who I have been loyal to for over 15 years, will treat me well - but if they did want 1k to solidify my order I think that is reasonable.

 

[TNBronc4344]

It seems pointless to ask for a deposit that's fully refundable if you back out. It just further complicates things.

Agree 100%. I was ready and assumed a deposit was required but they said nothing other than the $100.

 

[Tortuga353]

My dealer said no additional deposit at order. $100 dollars. He said no reason because if I don’t buy it they will be happy to sell it.

 

[tambrico]

I placed my order and an extra $500 deposit at my dealer already. I'm going to be paying anyway so I don't mind.

 

[MJJ]

Granger has stated many times that dealers will get steep penalties by Ford for every reservation order that does does not complete to a sale to that reservation holder.

So why would any dealer want to order 100 Broncos and have half of them cancel? Dealers should try to weed out the tire kickers by asking for a order deposit. The $100 reservation deposit was requested by Ford not the dealers. Now its the dealers that are trying to protect themselves by asking for a order deposit. if it’s refundable it shouldn’t be a problem.

I don’t get the dealers getting slapped with big penalties if reservation holders don’t follow through. I know what they are trying to prevent but their plan is flawed.

Dealers didn’t set the $100 fully refundable deposit limit
Dealers don’t control Covid or the unemployment rate
Dealers don’t control the piss poor launch from Ford corporate
Dealers don’t control the 12-18 month wait
Dealers don’t have control over high in demand options being delayed or interior choices that are sub-optimal

If Ford wanted a high follow through rate they should have set the initial deposit required closer to $1000 and had their act together before they launched like having the B&P live before the reservation window even opened up.

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