Large scale dealers and margins on used cars

[Neil_M]

In theory....

Yellow Ibiza - £2400
2 tyres & service - £170
Valet - £40
Fuel - £20
Paint smart repair - £100
Wages,rates,elec etc - £200
Warranty - £250
----------------------------------------------
= £3180
----------------------------------------------
Margin = £620
Negotiation discount - £150
----------------------------------------------
Profit = £470
Vat on profit - £94
----------------------------------------------
Actual Profit £376

I'd have said in reality ..

Yellow Ibiza - £2400
Valet - £40
Wages,rates,elec etc - £200
Warranty - £100
----------------------------------------------
= £2740
----------------------------------------------

 

[KevM]

Only if you dont cost everything to the car Jas!

But yeah, £1400 "mark-up" soon dwindles away to nothing

 

[Jason]

Only if you dont cost everything to the car Jas!

But yeah, £1400 "mark-up" soon dwindles away to nothing

Yea but you can't use the cost of preparing the car as your purchase price for the purpose of calculating your VAT margin.

 

[KevM]

You can get relief of those costs anyway, so it works itself out in a roundabout way

 

[Jason]

You can get relief of those costs anyway, so it works itself out in a roundabout way

Roughly yes lol Wouldn't fancy explaining it to hmrc though lol

 

[KevM]

We have accountants to do that kinda thing!

 

[Jason]

We have accountants to do that kinda thing!

Same but the buck still ends with the person who wrote it lol

 

[Crow555]

I'm beginning to wish I sold the ibiza on myself, lol.

Someone mentioned Carwow a week ago and in my curiosity I set up a profile and put in details for a Fiesta ST-2 and a GT86 Standard (The £25k one with £495 met. paint). The quotes that came back after a day surprised me, I didn't realise you could get so much off a new car (15% was the best on both cars). What surprised me more however was that the finance figure was lower than cash. In some cases, £1k lower.

Sadly carwow didn't have the monthly repayments so no idea what it would equate to in terms of monthly outgoings.

 

[svensktoppen]

Since last year, the FCA put a stop to that.

Missed that, great to know, cheers

Really means Coog has the right strategy then - get it on finance to get the maximum discounts, dealer gets their kickback from the finance, then pay off the loan as quickly as you want/can. Everyone wins.

No dealer wants a cash deal. So we will always lose out on either the cost of the new car, or the price of the trade-in, or both, if showing up with cash...

 

[KevM]

Same but the buck still ends with the person who wrote it lol

The HMRC buck wont be stopping here, thats for sure!

 

[Jason]

The HMRC buck wont be stopping here, thats for sure!

Who do you work for?