- Joined
- Jul 19, 2020
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- Location
- Northwest Arkansas
- Vehicle(s)
- Ford Bronco, BMW R1150 GS
- Your Bronco Model
- Badlands
Here is another possible explanation…
Since the buyer is a reseller, the dealer may have a “suspicion” (whether legitimate or not) that the buyer intends to export the vehicle, which would violate the dealer’s franchise agreement with Ford and incur hefty financial penalties or even termination of the franchise agreement.
The fact that Mike Levine was involved and was attempting to help the buyer suggests that this is not a legitimate excuse, but the dealer may still be hanging its hat on this argument.
See below for more details…
MLG Automotive Blog
Over the last several years, automobile manufacturers have gone to great lengths to curb consumer exports of their vehicles to foreign countries. Manufacturers face millions of dollars in losses annually on the sale of high-end luxury vehicles to places like China and the Middle East, where the sales of luxury vehicles can fetch two to three times the U.S. sticker price.
At a loss for how to prevent these exports on their own, manufacturers are forcing dealerships to act as unofficial enforcers, imposing stiff penalties against any dealership that unwittingly allows one of their vehicles to be exported overseas.
In their effort to force dealerships to police the export of luxury vehicles, manufacturers now insert strict liability provisions in their franchise agreements, imposing financial penalties, chargebacks, reductions in vehicle allocations, and in some cases termination of a franchise, when a dealership sells a vehicle that ends up overseas in its first nine to twelve months in service.
In response, dealerships are forced to go to great lengths to investigate potential purchasers. For example, before selling a high-end luxury vehicle, a dealership seeking to avoid penalties may be required ask the buyer uncomfortable financial questions to determine whether they can afford a luxury vehicle. Some dealerships are now even going so far as to require purchasers to sign an “Agreement Not to Export” wherein the buyer agrees that they will not allow the vehicle to be exported in the first two years of service, or face severe liability to the dealership.
For dealerships, unknowingly selling a vehicle to an exporter can be disastrous. Some estimate that manufacturers have charged dealers selling vehicles to exporters, even inadvertently, tens of millions of dollars in penalties and chargebacks. Four of the largest manufacturers of high-end luxury vehicles, BMW, Land Rover, Mercedes-Benz and Porsche, reportedly penalized their U.S. dealers with chargebacks totaling $30.4 million from 2008 through 2013.
Since the buyer is a reseller, the dealer may have a “suspicion” (whether legitimate or not) that the buyer intends to export the vehicle, which would violate the dealer’s franchise agreement with Ford and incur hefty financial penalties or even termination of the franchise agreement.
The fact that Mike Levine was involved and was attempting to help the buyer suggests that this is not a legitimate excuse, but the dealer may still be hanging its hat on this argument.
See below for more details…
MLG Automotive Blog
Over the last several years, automobile manufacturers have gone to great lengths to curb consumer exports of their vehicles to foreign countries. Manufacturers face millions of dollars in losses annually on the sale of high-end luxury vehicles to places like China and the Middle East, where the sales of luxury vehicles can fetch two to three times the U.S. sticker price.
At a loss for how to prevent these exports on their own, manufacturers are forcing dealerships to act as unofficial enforcers, imposing stiff penalties against any dealership that unwittingly allows one of their vehicles to be exported overseas.
In their effort to force dealerships to police the export of luxury vehicles, manufacturers now insert strict liability provisions in their franchise agreements, imposing financial penalties, chargebacks, reductions in vehicle allocations, and in some cases termination of a franchise, when a dealership sells a vehicle that ends up overseas in its first nine to twelve months in service.
In response, dealerships are forced to go to great lengths to investigate potential purchasers. For example, before selling a high-end luxury vehicle, a dealership seeking to avoid penalties may be required ask the buyer uncomfortable financial questions to determine whether they can afford a luxury vehicle. Some dealerships are now even going so far as to require purchasers to sign an “Agreement Not to Export” wherein the buyer agrees that they will not allow the vehicle to be exported in the first two years of service, or face severe liability to the dealership.
For dealerships, unknowingly selling a vehicle to an exporter can be disastrous. Some estimate that manufacturers have charged dealers selling vehicles to exporters, even inadvertently, tens of millions of dollars in penalties and chargebacks. Four of the largest manufacturers of high-end luxury vehicles, BMW, Land Rover, Mercedes-Benz and Porsche, reportedly penalized their U.S. dealers with chargebacks totaling $30.4 million from 2008 through 2013.
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