Ford Bronco buyers are putting down cold cash, not trading in old vehicles
The biggest trade-in for a coveted 2021 Ford Bronco is actually not the Jeep Wrangler, as folks might expect in the war for off-road dominance.
It's a cash game these days for an SUV that made its comeback after an absence that lasted a quarter of a century — then launched during COVID-19.
"The early adopters buying the Bronco want them, they don't need them," said Jeff King, vice president and general manager at Bozard Ford Lincoln in St. Augustine, Florida, who plans to sell more than 30 Broncos in December alone.
"The biggest trend we can see on trade-ins is that a lot of people don't have them," he said. "We're not seeing half of them being Jeeps."
In Michigan, Bronco sales continue to flow with no signs of slowing, said Chad Wilson, general manager of Wilson Ford in Saginaw and Midland Ford.
The range of customers includes just about everybody from a nurse trading a Jeep Wrangler to another customer opting to keep the new Bronco as an off-road third vehicle, he said. "I think Ford anticipated a lot of demand but nothing to the level it has been."
Supply chain disruptions and a semiconductor chip shortage have led to factory closures and an overall production slowdown that fuels demand for the all-new Bronco, said Mark Grueber, Ford Bronco marketing manager.
"This is a vehicle people are adding to the household, and the frequency of that is greater than other vehicles," he told the Free Press. "Bronco demand remains strong nearly a year and a half after the reveal, appealing to both experienced enthusiasts and those looking to get into the wild for the first time."
Until now, the off-road enthusiast has usually shopped with Jeep and Land Rover, said Mark Douglas, owner and president of Avis Ford in Southfield.
'Just write the check'
When he's not taking in Jeeps on trade, it's cash — and it's almost always a cash purchase, he said.
"They’ll typically just write the check," Douglas said. "New Bronco owners are usually adding a vehicle to their current portfolio. Many are well-to-do purchasers. There are essentially no incentives or rebates on Bronco. In other words, this is not a payment shopper. They're buying this vehicle because they want it and they can afford it. We're ultimately catering to a totally new customer to Ford."
More and more, customers are moving to three vehicles now and especially when the stable has a Bronco, said Steve Gabbara, general manager at Szott Ford in Holly.
"Probably 80% of our Bronco sales have not had a trade-in," said Gabbara. "We're dealing with people with a little more disposable income, and most are coming in on the high side around the $60,000 range. We've had a few in the low $40,000s for people doing their own off-road modifications."
The hottest colors of the 2021 model have been Cyber Orange Pearl and the bluish Area 51, Gabbara said. "People really like the unique colors. There aren't a lot of black and whites going on right now."
In Texas, Broncos are seen as quick turn-around investments.
"We find some people who are buying and immediately selling them," said Sam Pack, CEO of Pack Auto Group based in the Dallas area.
This situation is disturbing, he said, because his dealerships have had a policy for 40 years not to sell new vehicles above the manufacturer's suggested retail price, or MSRP.
"Some individuals who are purchasing at our MSRP are taking the Broncos to auction and selling them for $10,000 or $20,000 profit or more. We've tracked it and know that to be the case," Pack said. "As a result of what they're doing, we're thinking of changing our policy. If we're not the only ones, we're one of the very few selling at MSRP rather than some premium price."
Sold in 3 days
In California, sales manager Eric Groulx at Colley Ford in Glendora said the longtime family operation holds prices down for customers who order a Bronco through the dealership.
However, they did sell a First Edition Bronco with a hardtop for $104,000 to a customer after it sat on the showroom floor for just three days, Groulx told the Free Press.
"A First Edition is about as limited as you can get and having a hardtop — after they had been recalled — it was like unicorn," Groulx said.
Reports of crazy purchase prices have plagued social media, stirring awe and anger.
While dealers said Bronco demand seems insatiable, Groulx said the Ford F-150 pickups aren't seeing trade-ins either.
Not only is the used car market failing to keep up with demand as prices climb, but people who want a Bronco seem immune to sticker shock.
On the West Coast, dealers say they're squeezed harder than competitors on the East Coast because Ford allocated hardtop priority to the part of the country with snow and sleet after the hardtop recall.
It makes consumers feel like there's a shortage of vehicles, Groulx said.
As for the buy-and-flip, that doesn't concern the family-owned dealership in southern California, Groulx said. "What people do with the vehicles is up to them. Every single Bronco has sold within 24 hours."
Bid high and fast
As alarming as it may sound, buying cars has become more like buying houses in terms of growing prices and consumer demand, said Karl Brauer, executive analyst for the iseecars.com shopping site. All cars are priced about 10% over MSRP now, he said.
"And cars that are highly desirable like the Bronco? If you want one, you're probably not someone who has any financial challenges right now," Brauer said.
"You'll hear reports of a house going for sale and requiring an all-cash offer and hope someone else doesn't offer more. Well, cars are like that now, especially unique cool, rare, desirable, ones," he said.
The number of well-heeled customers who don't care about the price is growing, as long as a broker can get the car quickly and easily, Brauer said. "They'll say, 'Hey, Joe, go get me a Bronco.' And the broker will ask what they're willing to pay. 'I'll pay $80,000' for one. Then the broker gets something nicely loaded for $65,000 and resells it."
Long term, buyers want to work with dealers who don't inflate prices. But some dealers want big money now or they realize that some buyers just don't care how much their Bronco will cost.
Cash says something
Randy Pond, 36, of St. Augustine, is a maintenance officer in the U.S. Navy who traded his 2010 Ford Flex for a 2021 Ford Bronco in July.
Over the past six months, he said, he has probably "sold" nearly a dozen Broncos when others have seen his at stoplights and grocery stores. He even has allowed fans to drive his SUV.
“I’ve put 9,000 miles on my vehicle because it’s a joy to drive every day,” Pond told the Free Press on Tuesday.
“Ford did their homework and took everything wrong with the Jeep and made it better, from road noise to comfort. It’s like riding a luxury vehicle you can climb a mountain in," he said. "The willingness of some buyers to go out and pay cash over MSRP is absolutely a testament to Ford listening to customers.”