Fair or Foul? Ford Dealer Offers Opt-OE Parts for OE Prices

Published in Texas Automotive – Thomas Greco Publishing

“Quality means doing it right when no one is looking.” Henry Ford’s famous quote speaks to a level of integrity that many aspire to achieve…many, but not all.

Over the past couple of months, David Osburn (David McDavid Ford Collision Center; Fort Worth) noticed something odd related to parts pricing. “Insurers began writing estimates that called for opt-OE parts from [a Central Texas Ford dealership] due to the lower price, but when I called the dealership to order the part, I was told that my cost would be the same as for an OE part, even though the MSRP for the opt-OE part is significantly less than MSRP for a new OE part. Well, that doesn’t make a lot of sense – if I’m buying a less expensive part, I should be paying less! How could my cost be the same?”

Osburn reached out to several different people associated with the dealership and was appalled when he was repeatedly told that the dealer does not actually have or sell opt-OE parts. “They claim it is just a marketing ‘strategy,’ though it seems more like a marketing scheme,” Osburn recounts. “They’re lowering the MSRP, but my cost is the same, so they’re cutting into my profitability. This dealership is reducing the list price by a few percentage points, claiming it’s because they’re selling an opt-OE part, but there’s no difference in the price they want to charge me. They are cutting into my profit.”

As a Board member of ABAT, Osburn takes this situation extremely seriously because it doesn’t just impact his shop; it also impacts independent shops that are being pushed toward these opt-OE parts. “They are cutting what little profits exist for these small businesses that are starving and struggling to stay open. Meanwhile, I hear that they’ve had to rent another warehouse to stock their $30 million in inventory. They are rolling in money that they’ve essentially taken right out of shop owners’ pockets.”

Arguing with insurers about the parts being written proved unfruitful, so Osburn filed a complaint with CCC. “They chose not to make any changes and not to remove the dealer as a vendor,” he reports. 

Osburn reached out to the parts manager regarding the “fabricated list” prices. “What you are doing is deceptive and should not be allowed,” Osburn wrote. “You are lowering the list price on OEM parts and taking profits away from repair shops. Many of those shops are already struggling to survive, and you are putting another nail in their coffin.” They never answered.

Texas Automotive also reached out to the parts manager to request his perspective on this situation. We asked the following questions:

•  Does your dealership’s parts department sell opt-OE parts? 

•  If not, why are you listing opt-OE parts on your CCC vendor profile?

•  If yes, why are you charging shops standard OEM prices on opt-OE parts?

•  Do you understand how this situation is impacting collision shops by reducing their markup on parts & negatively impacting their profitability? 

•  How do you justify this seemingly deceptive practice?

•  Is Ford aware of this practice?

No response was received, but another shop owner shared his experience with the same dealership’s supposed opt-OE parts. “I spoke with my parts salesperson and complained about the practices of their dealership with opt-OE parts,” explained Brian Brunson (Auto Tech Services Collision; Mansfield). “He inquired with their management and was told that this is a Ford program that FMCO pushes down to the larger dealers only to sell returned inventory and/or factory blemished parts.

“I’ve ordered parts from them on this program before that had a lower list price, but my cost was the same as buying new OEM parts (NOT opt-OE parts),” he continued. “These parts were also delivered here by a third-party vendor that were picked up at the Dallas Ford parts depot. The dealer never touched these parts. It appears that this is either a Ford program, or this dealership is simply messing up the market for all other dealers and those shops that are having to purchase these parts. I think we need an answer from Ford!”

Texas Automotive attempted to gauge Ford Motor Company’s stance on this situation. After explaining the scenario described above, we questioned if Ford has knowledge of such practices. We also asked about Ford’s stance on opt-OE parts. 

“Ford Motor Company does not own or operate its dealerships or control dealer pricing. Dealers are responsible for their own prices on products that they sell,” wrote Cathleen O’Hare, manager of Ford Dealer Communications.

Brunson recently had a similar experience with a local GM dealership. “Something smells here! Maybe it’s time for shops to boycott buying from these suppliers since our cost isn’t changing,” he suggests. “No reason to feed the beast!”

Has your shop experienced a similar situation with a local dealership or parts supplier? We’d love to hear from you! Share your story by emailing [email protected].