Lincoln Adds New Limits To Discounts Its Dealers Can Advertise

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis 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 in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - January 26, 2021

Lincoln is limiting the discounts that its dealers can advertise in a move that could make it harder for consumers to see the best prices. According to a bulletin sent to dealers yesterday, the brand has changed its minimum allowable advertised price, or MAAP, and is discouraging dealers from listing Black Label models under MSRP.

Until recently, Lincoln's Ad Covenant Program prohibited dealers from advertising below its invoice prices less applicable incentives. Now, that minimum price calculation has changed to 4% below MSRP less current offers. Meanwhile, the brand's flagship Black Label series is being limited to MSRP minus incentives.

An ad covenant is a set of rules that dealers agree to in order to have their advertising subsidized by a manufacturer. The rules are designed to build a company's value by discouraging practices like "distressed advertising." Running afoul of these rules can result in significant financial penalties based on a "strike" system.

Having said all of that, dealers can still sell a car for whatever price they want based on market demand. The quirk is that there may be a bigger difference now between the discount a shopper sees advertised and what they can actually get. For those looking to get the best possible price, this may require negotiation.

For illustrative purposes, take the 2021 Lincoln Navigator Reserve. Previously, participating dealers couldn't advertise under invoice ($77,222 excluding destination and fees) minus any rebates (there are none). Now, dealers can't advertise below "4% less than MSRP," or $78,686 ($3,279 below the MSRP of $81,965).

That's a difference of almost $1,500. If a buyer decides to shop for a range-topping Navigator Black Label, they'll likely be faced with the SUV's rather steep MSRP of $98,125. However, with an over-$6,300 spread between the factory invoice and MSRP, it may be possible to end up paying significantly less.

MAAP calculations clearly have a purpose but can make it harder to know if you're getting a deal. For example, a 2020 Nautilus listed at $2,000 under MSRP may sound like a deal but most likely means that a dealer isn't advertising any additional discount beyond the $2,000 in rebates currently available to everyone.

Current Lincoln offers end on March 31, 2021. Stay tuned for our special Presidents' Day deal coverage next month.

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, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis 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 in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter

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