Ford Adds Harsher Penalty To Stop Brokers, Resellers

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As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

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, Managing Editor - July 25, 2022
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Ford is implementing some of the harshest penalties we've ever seen to stop brokers and resellers. According to a bulletin sent to its dealers today, Ford has updated its definition of what constitutes brokering and is threatening to take away entire dealer vehicle allocations on some of its most highly anticipated cars.

While Ford has had a policy discouraging brokering, reselling, and exporting its vehicles for quite some time, today's changes add a significant amount of detail to what behaviors fall within this policy. The move comes after Ford updated a customer name-match policy to prevent abuse amid an inventory shortage.

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When compared with the previous anti-brokering policy, Ford's letter states:

"Brokering includes the utilization of any 3rd party to wholesale, transfer, or otherwise deliver inventory, especially vehicles in high demand (including, but not limited to Raptor, F-150 Lightning, and all specialty vehicles). Additionally, any non-Ford dealer or non-Lincoln dealer that provide vehicle and inventory relocator services, automotive transfer assistance, dealer trade facilitation, and/or any other company by similar name or service, is considered a broker."

The move could be seen as a way to protect consumers looking to buy a highly anticipated vehicle like the 2023 Ford F-150 Raptor or sold-out F-150 Lightning EV. However, policies such as this may only be as strong as their enforcement and penalties, which have also been updated by Ford in the latest round of changes.

The updated policy states: "The first offense may result in a 1:1 reduction of future allocation by the amount brokered. The second offense may result in all same model allocation being redirected for the current or next model year." The wording didn't exist previously and seems to be the strongest language we've ever seen.

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If its dealers run afoul of the policy twice on a vehicle like the Ford F-150, this could mean forfeiting the chance to deliver an F-150 "for the current or next model year." That may seem hard to believe for one of the most popular vehicles in America, though the policy may be intentionally written with a degree of vagueness.

To be fair, Ford's policy against brokering already had some pretty stiff penalties. For example, one of the threats included a "chargeback of all domestic retail and fleet incentives paid by Ford on sales to companies who resold the units." That could involve a multitude of rebates, program discounts, and other incentives.

But will Ford's latest policy help consumers? One could argue that the definition of a reseller seems vaguely tied to "intent." The policy states that it requires transactions for Ford and Lincoln dealers "to occur directly between an authorized dealership and the purchaser with no intent to broker, resell or export units."

The company clearly seems to be trying to protect its distribution system in an environment more heavily geared toward getting customers to place an order and wait for their vehicle to arrive via a production pipeline subject to delays and other changes. Whether or not this will actually be effective remains to be seen.

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, Managing Editor

As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

Follow On: Twitter

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