lozgti

Everyone seems to be chuntering about second hand values.The response seems to be 'well you could get a new one for £xxx'

Dealers are always talking about tight margins and there is nothing in it for them.How come they can just slash 25-30% off then? They can't be selling at a loss,I just can't believe they would do that.

What are the margins then?40% profit? 50%?

Have we been ripped off for a while? (sure there will be the R & D arguments)

stilover

I hate people stating how tight, or poor they are. There is a famer on who's land we shoot on (Disused quarry) and even if we are a couple day late giving him his annual `rent` he threatens to lock his gates, never let us shoot on his land again.

Why? "I'm only a poor farmer, I'm struggling to make ends meet" He says this to everything and anyone who'll listen to him. Thing is, my gran was an accountant, and did his accounts. The guy is worth Millions.

I have no simpathy for dealers. They've been making loads of money off us for too long. You've just got to see what prices they stick Part-Ex's up for when you know what they gave for the car. (before the credit crunch)

Remeber wanting to offload my Impreza after less than 12 months of ownership. Retail £26k'ish. Best offered was £14k. One dealer had the cheek to even admit he was only interested if he could make a min of £5k off my car.

Matteeboy

I'm actually hoping my local Vauxhall dealer sinks after shocking service a while back.
They need their butts kicking leaving good dealers afloat.

stilover

Yeah, wouldn't mind our local Ford dealer going t1ts up. We were contracted to do the roof & cladding work on their new prestigious showroom.

Due to steelwork tolerances being out, our cladding ended up slightly out of line (no fault of ours) so they refused to pay for the final payment. Didn't pay the steelwork contactor, and various other contractors. All in the hands of our Solicitors now, but they owe us nearly £20k.

TBH we think there was a scheme from the off. We learned that the main contractor was best friends with the owners son, who happens to be MD of the Garage. Ford obviously paid for the work, and we think that without paying the contractors, they've divided the money between the 3 of them. Owner bought an Aston Martin DB9, and now drives a Bentley Cont GT. Son bought a 911 Turbo, and now drives a Cayenne Turbo.

They bought out 2 other Ford garages a few years ago. We'd love them to go bust. What goes around, comes around.

Matteeboy

Similar to our Vx dealer -done really well despite being TERRIBLE.

Our car had engine trouble so took it in (Mrs Matt was 8 months pregnant at the time) in "safe" mode all the way (took ages to get there). Had no courtesy cars available so told us to hire one - we did.

They then refused to refund us AND damaged the car (scraped it) and clearly hadn't planned to tell us. Luckily Mrs Matt spotted it.

Eventually got a tiny bit of money back but the service and attitude was so bad that I considered violence (!).

Many others have had to same. If they sink, I'm going to send them a rather gleeful letter.

ALi-B

iTrader: (1)

Swings and roundabouts; For every dealer operating at a profit, there is one making a loss. Thats why you see them coming and going. Being bought out, sold on wound up etc.

Thing is, when dealing with the public there are those who just lay down or bend over and basically let a dealer charge whatever they like without a hint of complaint, and perfect acceptance of "thats what it costs" be it for a car, parts or services.

Then there are others who are more financially astute and drive for a bargain.

Finally there those people who no matter what think that the dealer is out to rip them off and can't understand the concept that if the dealer didn't make a profit, they would go bust pretty quick. And can't comprehend that this is how a capitalist society works ( )

So obviously how a dealer acts is based on what their expected client base is; Bentley, Rolls and AM dealers generally can charge what they like, there are few competing dealerships so they can also communicate between them to ensure they are selling at the same levels.

As you trickle down to more hum-drum cars, the client base becomes more mixed in terms demanding on price vs value for money. But the dealership will carry on in hope that what the prices they sell at will be accepted by the customer; as long as they can draw in customers and the competing dealership down the road isn't undercutting them by too much, they are ok. Prices can ALWAYS be negotiated later on if need be.

The day people stop walking round the showroom is the day they start dropping advertised prices, in hope to get more people traffic.

P1Fanatic

Whilst I agree it looks like dealers have been making a killing if they can still sell so low and make some money, you have to also bear in mind that the manufacturers are also dropping the prices they sell to the dealers in order to get rid of the backlogs of stock they have. So its not just the dealers dropping their cut.

Im sure someone posted a Ford Dealers price list on here once showing cost price and expected mark up. Wasnt that great per unit from what I recall. As for its accuracy well who knows what to believe off t'internet.

Simon

stilover

Just going of memory.

Focus ST2.

Dealer purchase from Ford - £16,500
Dealer sell to customer - £19,500

Prices are approx

RobEvo5

iTrader: (9)

I've personally lost a fortune to dealers over the years and probably kept most of them in business including half the wanabe private dealers in here. And yet despite this I wouldn't fancy being a dealer at the moment, new or second hand. The risk v's reward, effort, profit margin, cash flow equation probably don't make for very good reading if you weighed it all up.

I've probably changed cars more often than most and very possibly more than anyone, and always bought for what I would consider to be a very good price, and even tried my hand at selling privately come time to change, but on balance I have still lost an absolute fortune.

Fair play to dealers IMO, and bloody good luck to them. I don't mind loosing money to them, but what I do like is a bloody good service in exchange with no quibbles if something needs sorting/goes wrong.

zip106

Thing is, you go in for a px price and you get '....well sir, your car at the moment is about £5K under book...'
So how come all the cars on their forecourt are making or are worth, book prices (according to the dealer)?

Hoppy

Dealers are selling at a loss now. They've got to in order to shift stuff that was bought in at the wrong price and is never going to move otherwise, tying up capital.

I just bought an Audi S4 for £19k. I know for a fact it was up for sale last summer for £28k, and has been hanging around the (official) dealership ever since. They have got to have taken some pain on that deal.

But the ever-decreasing bargain prices we're seeing now will come to an end when supply and demand get in line again. New car production has been drastically cut, or even stopped, so that time is coming soon. In the latest edition of CAR mag, in their Sale of the Century article they say that prices could have stopped falling already. Sure enough, the natural spring lift has got to stabilise things at least, so if prices are going to fall significantly further then we might not see that happen until the autumn. Ergo, best to buy now.

CAR mag then goes on to point out that when the economy picks up, whenever that is, since there are so few new cars being sold now, there will be very few good used cars in the future. That will drive prices back up. In other words, if you buy smart now, you could even make a profit in 2010... No, I didn't believe that either.

Richard.

cookstar

iTrader: (6)

My Uncles Vauxhall dealerships are sinking, leaving several members of my family without jobs, and around 100 others out of work. What a stupid thing to hope for.

stilover

Suppose it just depends on said dealership having good or bad service. Worst service I've ever had from a dealer, was a Renault dealership. I wouldn't care less if they went bust. While the best service I've ever had was the Subaru dealership at Richmond. SG Petch. Now, I certainly wouldn't want them to go bust.

In financially tight times, good dealership should survive, as where are you going to take your car for it's service/warranty work?

Matteeboy

If a dealer gives cr4p service, I'm afraid I don't care how many jobs are lost, they deserve to sink.

The directors of this dealership (Ward Vauxhall) left me and my wife (8 months pregnant at the time) stranded, lied to us repeatedly ("we'll pay for your car hire, etc") and tried to get away with damaging the car.

No company should survive when the guys in charge are that bad.

Scotsman

iTrader: (3)

The 25-30% reduction is subsidised by the manufacturer - not the dealer itself. I've got a mate who provides software into dealerships covering exactly this sort of thing.

Hoppy

I don't think this recession is singling out the good dealers from the bad at all. Everyone gets clobbered. And when it comes to buying, nobody really thinks about servicing - you go for the best deal.

If you can save a grand or two by travelling for the right car, then you surely will. The internet makes it so easy to search the country on a daily basis, which is what I did, and I have bought two bargain cars since December, both from dealers almost 100 miles away.

The ones that are suffereing these days are the sellers, be they manufacturers, dealers, or ultimately, punters. Manufacturers and dealers can reconfigure their business in line with the new market and, if they're brave, survive. Consumers are left with cars bought in the last year that are worth massively less than they paid, and which they now cannot afford to change. This will have unknown knock-on effects later this year and next. This recession thing has a few more surprises for us yet.

Richard.

Spec'c'57

iTrader: (1)

No disrespect for your uncle's BUT certain others need burning down yes our issue's ARE still ongoing a year later and TBH are unsure IF we will ever get anywhere.

Boro

iTrader: (1)

If i had several million to invest, it certainly wouldnt be in car sales and that isnt just since the recession. For years its been hard work for dealers.

Dealers probably make more profit from their Service/Parts dept than selling cars. Our Nissan sale dept on paper probably made a loss every year and it was only the sales, parts, bodyshop that made the company profitable overall.

But without new cars sales, you wouldnt have the other sides of the business.

Its a bit like a petrol station. You make very little money from selling petrol, but the shop will make up for it.

As for the prices offered on p/x compared to the advertised price when it goes up for sale. Bear this in mind:-

You get offered £10k for your px but it goes up for £12.5k. £2.5k profit? Thats how joe public would have us see it. But break that down.

£12.5k, but then mr know-it-all comes in with his car which in the real world is worth £7k, but he "thinks" its worth £9k!!!

The dealer will try to strike a deal that he's happy with, so takes money from the £2.5k to bump up the px price, this doesnt mean its worth the extra and will be "written back" to the true value on the paperwork.

Its robbing peter to pay paul. You might have noticed sometimes, your invoice figures are different to the figures banded about by the salesman. Its a complicated VAT thing.

Spec'c'57

iTrader: (1)

maybe im off to the wrong dealers BUT 17k increases to 23 /24k....

Matteeboy

Sold my R32 to a dealer for £17k, then sold it for £21.5k.

It needed to go and TBH, I was happy to have payment I knew wouldn't bounce.

I have found Ford dealers the worst for offering silly p/x prices though.

I got offered £8.5k for my 18k mile £18k (list price) Astra when I considered a Focus ST!!

stilover

I don't think most people would have an issue with those figures. However, the issue I have with certain dealers is when there is a huge gap between P/X and resale figures. Example.

Old man had a 2006 RS4. 7000 miles. Immaculate condition. Wanted to P/X for a brand new R8. Dealer offered £37k for his RS4, when he had older higher mileage ones sat on his forecourt up for £49k.

OK, some bloke drives in and gets his P/x bumped up with taking a knock on the sticker price of the RS4. Dealer would still look to make £9-10k on that RS4.

This was way before the credit crunch started.

Tidgy

% offers like that will come from the manufacturer, most dealers are franchises so they get the cars at set price.

any major offer like that will be set by the head office.

p.s. my girlfriend is a sale admin at a dealer and 95% of the time there isn't huge amounts in it for them, espeicaly at the min

Boro

iTrader: (1)

The more prestige cars will get hit alot harder. They depreciate at a silly rate, if the dealer doesnt shift it within the first 8 weeks, theres a potential for the value to drop £1000's.

Also, joe public px's a car, lets say an RS4. If the car has a fault and he doesnt tell the dealer or infact know of the fault, this is where it can get expensive. He can just walk away, dealer takes full responsibility for the condition of the sold car AND for the condition of the px.

So if it end up needing a new ecu, etc, the dealer has to pay.

Its a massive gamble taking in a high-end px, especially worse if youre not a dealer for that make.

Then theres VAT, 15% of the profit is gone before you even start.

Im not in the trade anymore, but dealers have it hard. Obviously they like to make as much money as possible, dont we all. But its nowhere near as easy or as profitable as the general public thinks.

Too much emphasis is placed on the selling price and the px price, but these are really the only two things that most customers see and understand (or atleast, think they understand).

Boro

iTrader: (1)

Just as an aside. Has anyone ever heard of underwriting?

Basically, where the dealer doesnt want to keep the px, so offers it to other dealers at trade price. Alot of this is based on trust between known dealers so that the dealer taking/buying the px, knows its going to be exactly as described and not turn up needing repairs/big service when it was described at ready to sell, etc.

Ive done quite alot of this, even after leaving the trade. Mainly as favours for mates who've had a bad px offer.

Its surprising how much extra you can get, even for everyday cars. Usually £500-£1000 but high-end stuff could be £1000's, especially now.

^Qwerty^

In December and early January, I was looking for an RS4. I went to the local garages: Hull, Doncaster and York, and none of them would shift on price, and were offering me really crap deals. Two of them showed me a spread sheet which detailed the stock, and also the stock of the other garages, since they are all in the Gilder group. This spread sheet also had a price on it, which they told me was the price they paid for the car.
Whilst some people may fall for it, I find it hard to believe that any dealer would pay £38k for an RS4, more so, as it had just landed in their stock list. In the end, I bought from an independant, and paid quite a few £k less. So would anyone know if these big groups have a profit figure on which they are not allowed to drop below?

Boro

iTrader: (1)

Most dealers have something called an Over Age Stocklist. Basically, cars which have been instock longer than a set period, some dealers set this quite low (30days), others goto upto (90days) before they really start getting desperate.

Alot of dealers will simply cut their loses somewhere between the two and try dropping the price substantially or ship ip to auction or have it underwritten by another dealer.

Its sometimes better to make a small loss than keep it in stock for too long and lose big on depreciation. All depends on the car tho.

cookstar

iTrader: (6)

Fair enough things need to be improved, BUT how about all the people that have no say in how things are run and just work there. including the admin girls, mechanics, technicians, etc. My Step father worked there as the Financial Director, his and my mothers house is now at risk. And you don't care about any of these just because you had bad service once. What a nice chap you are.

Spooky Mulder

...and it does not take a long search of the internet to get offered a Focus ST2 for £16,500 either. £19,500 might be list but not what you should pay...

RJM25R

iTrader: (1)

If you don't want the security of HPI clear, FSH all checkable, approved warranty and someone to sue if it all goes wrong, don't buy from a dealer!

Save money and buy a bargain at the auction! Of course, nobody sends cars to the block because they've got something seriously wrong do they? ? ?

And I can tell you some serious horror stories about customers who've lost money on so-called @Internet Bargains@ including one about a guy who paid a 2 grand deposit for an R32 and the company folded. Bye bye money!

With the overheads concerned, many badly run garages will be going under.

Funny how everyone goes on about the profits that dealerships allegedly make though, and yet none of you ask for a discount anywhere else when you spend your money! Asda make far more money than ANY dealership in the world, but you'll pay their prices without batting an eyelid!

Same when all the chavs pay 150 for Nike air max or whatever!

Just bear in mind though, that when I sell a car, 15% goes to the government, plus they get the money from the road tax, tax from the fuel, tax from my commission, tax from the mechanics wages, tax from the insurance products etc etc etc. I pay 40% tax AND company car tax too! IF our dealer went bust tomorrow, the government will be looking to recoup that lost tax from YOU!

Sweet dreams!

Spooky Mulder

Clearly comments from a dealer.

My post about searching the internet was for a price from full main dealers through broker sites such as Autoebid. The cars are supplied by a main franchised dealer and the cash is paid to the main franchise dealer.

So you get all the benefits you describe and non of the hassle.

And given your comments on auctions - I wonder where many, many dealers including main franchise players get their stock? Care to enlighten us?