Anyone who has tried buying a car in the past year knows the market is a mess. And if you haven’t been in the car market lately, trust me when I tell you, it’s a mess. The supply chain issues, COVID lockdowns, and increased demand created quite the log jam. As inventory numbers continue to shrink, dealers are grossly inflating prices, and some OEMs are over it. Ford is now taking action against pricing gauging on the most popular models like the Ford Mustang Mach-E, Ford Raptor, and the Ford Bronco. GM is getting involved in the crackdown as well.

What can Ford and GM do to end car flipping and price gauging? 

The new car shortage has created a hot side market of people buying popular new models and immediately flipping them for more than MSRP. Dealers are not only involved with these flips but are also charging, in some cases, much higher prices than the OEM’s MSRP. This is creating a bit of stink between the dealers and the automakers. 

Check Reddit, Instagram, or Twitter, and you’ll find no shortage of people posting photos of car stickers with an extra $20k, $30k, or even sometimes as much as $100,000 over MSRP. It’s wild. While dealers hide behind obtuse excuses like “market adjustments,” OEMs aren’t having it. 

The first step in trying to fix this issue is Ford and GM are beginning to threaten the greedy dealers with limiting or even canceling allocations for highly-anticipated models. 

Ford needs to end price gouging on Ford Mustang Mach-E, Ford Raptor, and Ford Bronco

Car and Driver says that while GM is also involved in the crackdown, Ford is catching more flak for this dealer greed than any other OEM. 

According to Carbuzz, Ford admitted that a “limited number” of dealerships were demanding customers to pay more than a previously agreed-upon price for the 2022 F-150 Lightning electric truck, even after the order had been placed. This pissed Ford off because it was “negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation,” Ford said in a letter to dealers. The letter threatened to pull the Lightning from dealers caught raising prices. 

Ford caught some dealers going as far as giving Ford fake customer names so Ford wouldn’t know that the order was for the dealership, which would then raise the price of the car discretely. Ford is increasing its security and verification on this process. 

Just last week, Ford sent another more threatening letter to dealers who still weren’t getting the message. The letter told dealers that for the first offense, it would be a 1:1 punishment; get caught marking up prices, and your next order will be short a unit. Get caught a second time, and the model that has been marked up will not be allocated to that dealer at all for the current and maybe even the next model year. 

GM is also taking new car prices seriously

GM has had plenty of trouble from dealers grossly marking up cars and flipping models like the new Corvette Z06, Cadillac Escalade V, and the GMC Hummer EV. General Motors is following Ford’s lead by limiting allocations to guilty dealers, but it is also taking the flippers to the woodshed. 

GM just announced that not only will they incentivize customers to keep the Corvette Z06 for at least 12 months with added goodies, but you might also get punished if you don’t abide. Corvette Blogger reported that GM will also limit warranty transfers on these highly sought-after models. This will hopefully make flipping a brand-new Corvette or Hummer EV a bit less appealing. 

Listen, the car market is jacked up enough right now without dealerships, and third-party sellers are getting grabby with unethical markups and bait and switch pricing. Stay frosty out there, and don’t let the dealerships take you on a ride.