Large scale dealers and margins on used cars

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mike150

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I have sold cat D cars, repainted cars, rusty cars, a car with a faulty sunroof, a leaking boot, even a Fiesta van that had been converted into a car!

In every one the buyer knew of the issue.
 

veron

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And talking of margins on used cars, I know its not a large dealer but when I bought my Golf from Stock Brothers they showed me the trade in docket for the same price I bought it for! Thought that was a bit weird considering new tyres and bit of a pint job done to it.
 

Jason

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And talking of margins on used cars, I know its not a large dealer but when I bought my Golf from Stock Brothers they showed me the trade in docket for the same price I bought it for! Thought that was a bit weird considering new tyres and bit of a pint job done to it.

The profit was already made on the deal
 

RCT

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And talking of margins on used cars, I know its not a large dealer but when I bought my Golf from Stock Brothers they showed me the trade in docket for the same price I bought it for! Thought that was a bit weird considering new tyres and bit of a pint job done to it.

It was probably in stock for over 90 days or more, they had to make it road worthy with the tyres and paint for presentation, so when you enquired and dealt at that price, they were happy to let it go at that, rather than paying to advertise it for more weeks and re clean it. Cash it in free the space up in the yard and put some fresh stock in it's place instead. If thay traded the car they'd stand to loose more, then sell it to you.
BTW it's not uncommon for some dealers to blow up to 4K on ex demo's, but of course Joe Public never believes that. Some you win, some you loose.
 

Coog

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Also got a Leon at the trade price. I thought the guy was BSing until he showed me the paperwork. It had been there for some time I believe.
 

Ghisallo

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It's fun (well not really that fun) to go to Hursts website, find a car for sale you like, put that same car through their helpful little vehicle valuation thing and see what it would roughly get you as a trade in. One car I checked was up for £14988, and they would value it at £11200 trade in. There's £3.5k right there. A crude method of working out a margin I know.
 

Coog

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The price on the trade-in docket/paperwork isn't worth the piece of paper it's written on !!! :party:

Cheers

Ah well. Had it 18 months and sold it for a few quid more than it cost me so I wasn't complaining lol
 

ChrisR

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Also got a Leon at the trade price. I thought the guy was BSing until he showed me the paperwork. It had been there for some time I believe.

I seen my ex demo Leon advertised in Feb 14 and enquired about it but they wouldn't move on the price. (Could of had a new one for roughly the same). Kept watching it then in May 14 they dropped the price by over £3k so I ended up buying it!
 

Coog

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Similar story with me. Between me noticing the car and enquiring about it a day or two later, it had dropped £2k. He said it was because it was there for so long and they wanted the space back.
 

Eager

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Yep, new stock new money so blow it out. Not many small dealers could live with poor cash flow and money held in a few cars for long periods
 

Ghisallo

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Don't know how true it is, but sales guy in hursts said a lot of used stock is financed, if it hasn't sold within a month, they have to start paying interest and so starts to cost them to keep on the lot. As a result he offered a whopping £250 discount on a £18k car that we discovered was previously a hire care.
 

svensktoppen

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The usual conversation goes along the lines of "Just ran an HPI on your car are you aware your car is cat C/D?" Queue shock face of customer followed by "Whats an HPI?" I genuinely don't know if some folk are that green to the whole thing or are were just hoping I wouldn't check!

Come across that as well... You browse for cars, do an HPI, comes up as Cat C/D, ask the seller are they aware, and get a "shocked" response lol, every time :grinning:

Yeah right, no idea, lol :innocent:

That said, have a feeling a lot of people have no idea what an HPI check is, or are too stingy to spend a few ££ on one before parting with thousands or tens of thousands of £££... The world is full of crazy people, it really is.
 

Coog

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People just don't know anything about the process. All too easily suckered in by folk selling previously written off cars cheap and just don't use their head.

Since Christmas I've helped sell a few cars on behalf of friends. One of those few sold had history and they had no idea. And what was worse was that the report was in the service folder lol.
 

RickyB

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All these margins getting discussed but once VAT and Tax taken out of £1000 margin your left with just over £500...
Better margins for the retailer in many other industries like the pub(£80 keg turns into £400) or clothes often have 300% mark up or any food products in Tescos. Dont like it, dont buy it :-#
 

suckindiesel

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Again, a cross section of RMS users does not represent the non car enthusiast 'general public' who make up the vast majority of road users. Most people wouldnt dream of buying and selling privately, and they do not necessarily look after their cars that well or sell them for genuine reasons. I wasted a day last week looking into cars with incorrect mileage and categorys against them.
 

Audi_TTS

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But what use is 0% to them ? Why wouldn't they just take the full amount there and then rather than have to wait 2 years.

its a bit like a DFS sofa at 0% - The sofa is worth £700 you pay £1000 at 0% finance - really you're paying £1000 for an £700 sofa - So rather than the car dealer discount £50/500 they make it look like they are doing you a favour with 0% and they get kick back from the finance company so they win either way. When you see a deal advertised at 0% over 4 years i'll eat my plums off if you get any more discount and if you do you wont get the 0% - It'l be subject to T&C's - IE you pays the full whack.

Also on dealerships making £ - Id a cousin working for Audi Service a couple of yrs back and he told me what their monthly target was... I honestly cant remember so no point guessing but it was a waaweee moment. Defo hundreds of thousands a month. Thats where they make the money. The cars just a honey trap. look now at finance deals especially the last 6 months. most are quoting with maintenance included. Again thats just so you cant wangle discount and designed to make you think youre getting a great deal with tyres service etc thrown in for 3 years. But most deals are advertised about 8k miles per year. Thats 24k miles in 3 and probably on average 1 set of tyres and 1 service. I'll bet its a duff deal. I'll eat someone elses plums if wrong.

If youre ever going to buy a car CASH from a dealer negotiate on the basis youre going to HP the life out of it. PCP with small deposit. Then get agreed discount and wammy the mucker with a debit card for the full whack.... Watch the dealer melt....

used cars no different only they can also sell you duff warranty extensions :worried:
 

Audi_TTS

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Margins arent as big as you'd think as mentioned above finance and aftersales products are where the money is.

As @m00k stated, every car that is going out needs to be serviced, tyres replaced if required, brakes ball joints, paintwork/repairs etc etc

Don't get me wrong theres a pile of dealers that just lick a bit of polish round a car and hoover it, but they are the ones with a bad rep and end up with large numbers of cars coming back.
Surly when they take the car in on trade they give you a balls price for it citing it needs tyres etc so they have the margin they want as they know the price it'll sell for. its not like they pay a price and then look at it and think.. sh*t this things needs tyres and brakes! thats me fooked!
 

Chris_702

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If youre ever going to buy a car CASH from a dealer negotiate on the basis youre going to HP the life out of it. PCP with small deposit. Then get agreed discount and wammy the mucker with a debit card for the full whack.... Watch the dealer melt....

Doesn't work. When a deal is agreed between a customer and dealer and it involves discount due to them taking finance etc - if the customer pulls out a debit card to pay the 'agreed price' the deal is cancelled and you re-enter negotiations.
 

Audi_TTS

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All these margins getting discussed but once VAT and Tax taken out of £1000 margin your left with just over £500...
Better margins for the retailer in many other industries like the pub(£80 keg turns into £400) or clothes often have 300% mark up or any food products in Tescos. Dont like it, dont buy it :-#

Im pretty sure you do not charge VAT on used cars as they are taxed VAT when new and you cant pay VAT on the same item twice. there's ovvo tax on profits but when your making profits after all costs then that's grand.
 

Audi_TTS

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Doesn't work. When a deal is agreed between a customer and dealer and it involves discount due to them taking finance etc - if the customer pulls out a debit card to pay the 'agreed price' the deal is cancelled and you re-enter negotiations.

kinda thought that might be the case - I guess they only way the dealer would bend is if there was still a margin..
 
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