The First Dealer Markups For 2021 Bronco Have Already Started
We're weeks away before the official Job 1 on May 3th 2021, but the hype surrounding the new Bronco is reaching insane levels. Ford has been flooded with orders, and even before the production dates were released, the company announced that not all Bronco customers could expect to see their cars in 2021.
So far, Ford has experienced several unexpected setbacks from a global pandemic, other problems with the supplier of their hardtops, and most recently, a shortage of computer chips, all of which pushed the production date further. However, all of these issues have now been sorted, and Ford's assembly plant in Wayne, Michigan, will start producing Broncos soon.
Ford had proudly announced that their conversion ratio from reservations to actual orders for the Bronco topped than 66%, which is double the industry's average. We know that sources close to Ford revealed that the company had logged over 230,000 reservations, so we can conclude that Ford is dealing with more than 100,000 actual orders for the 2021 model.
The Blue Oval guys knew that the Bronco would be a hit, but nobody expected to be this big. In the meantime, Bronco Sport sales figures have reached the 30,000 mark since that model was introduced in late 2020.
The 2021 Bronco situation is one of those "problems" all manufacturers would like to have – an extraordinary demand that exceeds current capacities. But the impact that Bronco has already had on the market is far more significant than just the number of vehicles sold. The 2021 Bronco is a highly acclaimed game-changer that marks the glorious return of authentic off-road vehicles to a crowded -- and frankly a bit anemic -- SUV segment.
So, if you're a future Bronco owner, you'll no doubt want to get your vehicle as soon as possible. One way to accomplish that would have been to bid on the 2021 Bronco First Edition, which was recently sold at the Barrett-Jackson auction for a staggering $1.1 million. The other way would be to get your hands on Ford's recently introduced priority order.
As you've probably guessed, Bronco Priority Order is Ford's internal program, designed to allow certain dealers to get specific vehicles early and deliver them to their customers. The only requirement is that the cars to be delivered would have to have been ordered before March, 19th 2021.
The idea is to have specific VINs moved to the front of the cue and produce them early. The big question at present is just how many cars will be available through this program, and although there is no way of providing you with an exact number, the chances are that there will be very few Priority Order Broncos made. We're talking about fewer than 1000 vehicles in total.
What about most potential customers, most of whom are not dedicated car fans and haven't been following the Bronco story all that closely. These guys and gals likely didn't know about reservations and order deadlines nor be aware of the timeline of the Bronco's release, and are now just finding out that if they order their cars in April or May, they'll probably see them in Spring of 2022, since Ford is capable of producing about 80,000 units for 2021 model year.
When the Bronco finally hits the streets and trails this summer and when non-car folks see just cool the Bronco is, this kind of customer will be left without an option to get their cars in a reasonable amount of time, unless they want to pay insane dealer markups.
You probably already know all about dealer markups, a classic way for a dealership to capitalize on a vehicle's popularity. Although it might be considered a less than ethical way of earning money, it's nevertheless perfectly legal, since it's based on price agreed upon by both dealer and customer.
If the prospective customer is so eager to own a hot car that he or she is willing to pay significantly more than the MSRP for the privilege, then so be it. Some dealerships have a strict "no markups" policy and sell their cars at regular prices, but most will jump at the opportunity to earn a few extra bucks.
However, in the case of the 2021 Bronco, it won't be just "a few bucks". Just recently, somebody in California posted a Facebook marketplace ad for two 2021 Broncos that they currently have on order, listing their asking prices as $80,000 and $90,000 for a Bronco Wildtrak and Bronco First Edition. Since, the MSRP prices for these two Broncos are $49,450 and $61,000, respectively, this means that they're charging $30,000 over showroom price, which is insane!
Unfortunately, we believe that this is just the start of a trend, and many sellers and dealerships alike will be charging hefty markups to potential customers wanting to get their hands on brand new Broncos without having to wait.
Who knows, we might see 2021 Broncos offered for double the MSRP.