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Ford Motor Co. has dusted off some old tricks in order to help boost sales by way of old-school stair-step incentives. So far the ploy seems to be working. Ford was able to grow sales by 6% in April, which was much better than the 3.7% loss the brand recorded in March. New product like the Mustang, Edge and F-150 certainly help, but the allure of added profits undoubtedly pushed dealers harder as well.

Stair-step incentives – or programs in which the manufacturer retroactively pays a bonus for each vehicle sold within certain volume thresholds – can help stimulate sales, but they also come with some serious side-effects. 

For starters, larger dealerships have a competitive advantage over their smaller counterparts simply because of their scale and overall footprint. This means they can radically lower market prices for all local dealers when chasing stair-step payouts. In addition, dealers who push aggressively to meet month-end quotas don’t always hit their targets. The result? Thinner profit margins without the bonus payout to show for it.

Customer satisfaction is also at risk. The hidden nature of stair-step incentives causes confusion across dealerships in the same market and carrying the same brand; worse yet, substantial differences in actual prices paid can leave consumers feeling poorly about a given dealer and/or brand.

Ford’s most recent stab at a stair-step program illustrates the pricing differences that come with these incentives.

Ford implemented its new stair-step program, dubbed the Volume Growth Bonus Program, across its model lineup in March, however some Super Duty trucks and high-performance models don’t qualify. If a dealer achieves 80% of their sales target Ford is giving the dealer a $200 bonus per unit, $400 for the full target and $600 for going 10% beyond. It’s expected that this program will run through at least June.

So what does this mean exactly for consumers? Well, if you live near a high-volume dealer there are great deals to be had.

Shoppers in the D.C. Metro area can find some pretty crazy deals advertised right now on popular 2015 models. Two of the best deals currently advertised are redesigned 2015 F-150s with up to $10,000 off the MSRP, and 2015 Mustangs with up to $6,500 off. However, these advertised prices are best case scenarios including all possible incentives and exclude freight, tax, tags and dealer processing fees. Even lower-volume D.C. Metro dealers have advertised sale prices of up to $7,000 off 2015 F-150s and roughly $5,000 off 2015 Mustangs, excluding freight, tax, tags and dealer processing fees.

Under Ford’s stair-step program the high-volume dealer is able to meet or exceed its sales targets, which allows them to lower the sales prices of its vehicles and still make money, as a result the lower-volume dealer just can’t compete.