Is haggling to be expected on a dealer's price (used cars)?

[irocfan]

daemon said:

20% gross margin is relatively low in most businesses

You're going to wreck the place when you find out the gross margin on a takeaway food..

and whatever you do don't look at the profit margin of popcorn in cinemas!!!!

andymc said:

Welshbeef said:

Has anyone ever tried haggling st a food super market? Same logic they ring all the food and bits through the till. Then give you the price and you then ask for the discounted price.
Clearly the cashier says no so you say can you get HR manager if they don't move at all you walk away but to them they have a trolley full of stuff which an employee now needs to put back on shelf and that isn't free.

I've never done it but seen some on the Money saving e pert site who have

can't think of anything more demeaning

TBH I've flicked on to MSE a few times and each time I come away thinking "there's more to life than just trying to screw the last 1p out of someone". I suspect if you do a search you'll find tales on there of 'hypermilers' who turn their engines off going downhill as it saves money....

[HTP99]

Woman yesterday had been in my colleagues diary for a couple of months, she was after a specific model and engine at a specific price; the lower end, finally we had one at the price that she told us that she wanted to pay, in the correct spec and the car is immaculate, she didn't buy it though as she wanted £500 off because "all dealers do that".

2 month wait for the right car at the right price, surely they fact that it has taken 2 months for one to appear would have given her the idea that the market isn't exactly awash with what she wants; oh well, her loss, it will sell and it will sell for the full money.

[Shoegrip]

HTP99 said:

Woman yesterday had been in my colleagues diary for a couple of months, she was after a specific model and engine at a specific price; the lower end, finally we had one at the price that she told us that she wanted to pay, in the correct spec and the car is immaculate, she didn't buy it though as she wanted £500 off because "all dealers do that".

2 month wait for the right car at the right price, surely they fact that it has taken 2 months for one to appear would have given her the idea that the market isn't exactly awash with what she wants; oh well, her loss, it will sell and it will sell for the full money.

Strikes me that she either doesn't really want the car and/or doesn't know the market.

[ajcj]

Butter Face said:

Klippie said:

£10 profit on £55 I find that obscene, ....... greed that's all its is.

OBSCENE

May I suggest you never, ever buy anything ever again.

18% gross margin? I work for a similar business. Running a spares supply operation will incur costs of somewhere between 20% and 30% of turnover, assuming they run secondary distribution; if it's counter only, between 17% and 23% - that's to EBITDA level, makes no assumption regarding cost of capital. £10 margin in that kind of operation is losing money. So not obscene, not greedy, more like unsustainably low margins.... Too many people only understand price, not value.

[HorneyMX5]

Bought my latest MX5 from a used car dealer. Stickered up at £5500. Took it for a drive and looked at the history. Car was average priced compared to others within 100 mile radius. Offered £5000 and eventually met in the middle at £5250 with both sides happy. All done in an hour and collected the next day.

[itcaptainslow]

Welshbeef said:

itcaptainslow said:

If you're a service manager then you're utterly mad-you'd turn down potentially £100-£150 in labour sales, the main food & drink of a service department, versus profit that probably goes to the parts department on oil? When I was a SM we got the profit on the oil but it was labour hours and labour sales that were the main drivers of bottom line and thus paid my bonus.

I'd most certainly take the job on but check the customer's supplied oil is correct and then put disclaimers all over the service checksheet and invoice stating the customer supplied their own.

Surely it depends.

If he has idle labour yes if he has a full book then no. If he has a monopoly he be mad to do so too.

I can see your point but it could also be short sighted-you are potentially losing a customer for life or capturing and building a relationship with a new one.

[Shakermaker]

blearyeyedboy said:

Serious question, how far is reasonable to get accessories thrown in on a used car, say £15k, in lieu of a discount?

Mats and flaps?
Towbar?
Roof rack?
Respray of the car?

How far do dealers go?

I'm seriously looking for the first time in several years, and I realise the landscape has changed since finance has become king (and my preference is to pay cash...)

I'm far less confident in a showroom than I was five years ago.

Edited by blearyeyedboy on Sunday 9th October 20:55

"Mats and flaps" is doable for sure.

Towbar - probably not. They aren't cheap, and they take time to install properly. I asked how much a towbar was for my Superb last time I was at the dealer - £700 fitted and wired in. OK, that's dealer price, but I can't see many giving that away for free on a used car. Cheaper to buy a used car with a towbar on if I ever need it.

But it all depends on the car and the dealer.

When we bought the wife's Corsa, it was the lowest-mileage for its age that we could find in our area, and still priced quite keenly. We offered £250 below the sticker price, but asked if he would agree to put a fresh set of mats in the car (I could see them on the rack in his showroom as he was a little independent Vx dealer), and a full tank of fuel. He did, and then also without prompting, offered to put 6 months tax onto the car as well at his cost.
Clearly at that point, I thought I should have asked for more money off, but yet, we still got the cheapest Corsa that I could see advertised anywhere within 50 miles of our house. The dealer must have got it for an absolute bargain himself.

[blearyeyedboy]

Shakermaker said:

"Mats and flaps" is doable for sure.

Towbar - probably not. They aren't cheap, and they take time to install properly. I asked how much a towbar was for my Superb last time I was at the dealer - £700 fitted and wired in. OK, that's dealer price, but I can't see many giving that away for free on a used car. Cheaper to buy a used car with a towbar on if I ever need it.

But it all depends on the car and the dealer.

Thanks. I'm not actually after a towbar (just using it as an example) but I am surprised how pricy they are when wired in.

I've found my most recent dealer experiences more hard nosed and "take it or leave it" than when I last properly looked 6 years ago. It's not wrong, just not what I'm used to. I left feeling unsure of myself and to rethink what I'm doing...

[darren f]

blearyeyedboy said:

I'm seriously looking for the first time in several years, and I realise the landscape has changed since finance has become king (and my preference is to pay cash...)

I'm far less confident in a showroom than I was five years ago.

Yep, you and me both. We have been looking to change, either new or low mileage used. A couple of main dealers we have spoken with thus far have been very keen to quote new (inevitably via a PCP) but have been very reticent to discuss any great discount or deals on used. And this is on a £28-30k budget purchase, even after explaining I can make it a cash sale if they prefer. Reading this thread would suggest there is very little margin in such a car on thieir forecourt which is kind of supported by the salesman's usual offer to 'sort a finance deal to suit you' to get the car shifted at the screen price.

Alternatively, keeping an eye on BMW Website prices on used 3-series (one of the options being considered) it is often the case that a car that doesn't shift for 3 or 4 weeks gets reduced by £3-£4K on the screen price, correct me if I'm wrong but there must be that amount of margin there to start with, so why the reluctance to deal in the first instance? Thinking about it, these are probably 'management cars' already in the dealer network so the situation may be different but I'm a bit 'old school' and have trouble understanding the reluctance to do any form of negotiation with somebody looking to spend £30k or so.

[daemon]

darren f said:

...even after explaining I can make it a cash sale if they prefer.

They dont want a cash sale. Minimal profit for them.

darren f said:

Alternatively, keeping an eye on BMW Website prices on used 3-series (one of the options being considered) it is often the case that a car that doesn't shift for 3 or 4 weeks gets reduced by £3-£4K on the screen price, correct me if I'm wrong but there must be that amount of margin there to start with, so why the reluctance to deal in the first instance?

I would suspect they dont have a 4 week stock, but a 3 month stock and you're seeing them after midway through and at the end of their term. At that point they'll blow the car out pretty much at cost price and restock with another car they can make money on.

They wont discount heavily up front because its not worth their while to be selling at that price all of the time.

Some years ago i looked at a 335d Coupe, on at £28,500. The way the figures worked out my max price was £27,000 so i pitched at that but they wouldnt move, so i walked. I went on to buy a 535d from another main dealer. I got a call two weeks later asking if i was still interested as the sales manager was releasing the car at £27,000. I said i'd got sorted, but i kept an eye on the car. A matter of weeks later after dropping to £27K, they dropped to £26K and it eventually sold.

They will hold on to a car for the price they want, until such times as the sales manager decides its time to blow it out. You could be in the right place at the right time...

[blearyeyedboy]

^ I'm shopping with half of your budget, but it's fascinating to see, even while it sucks the enthusiasm out of me.

While waiting to get the money in place, I've been watching and waiting to see what shifts quickly and what doesn't. In practice, I think I'll simply hover until some dealer lowers their price and then go in. It's probably more successful than trying to haggle for myself, to be honest. Now I've got the money in place, I find it's hard to find what I want to. The advantage I have is that I'm in no mad rush, so I can wait for a car/deal I'm happy with.

Slightly off topic, my lack of enthusiasm isn't all about bargaining though. I had some joker on the phone of one dealer say he couldn't guarantee that anyone would be free to talk to me if I came in this weekend just past, so I didn't bother driving 40 miles to see that car. I'm not driving a fair distance to be told that no one can be arsed to see me. I'm feeling more than a little cheesed off with finding such dealers, though I'm sure that there are people with different attitudes out there.

[David87]

There seems to be huge money in selling used cars. I know of two different people with used dealerships local to me and they appear to be absolutely rolling in it.

[anonymous-user]

David87 said:

There seems to be huge money in selling used cars. I know of two different people with used dealerships local to me and they appear to be absolutely rolling in it.

Don't you believe it - it's hard keeping bread on the table from what I've heard;)

I would however tend to agree - whenever I've picked up a used car from a small trader's house, it's inevitably a grand affair complete with stone lions etc.

Thanks for the contributions - the search for my lad's dream car goes on...!

[daemon]

280E said:

David87 said:

There seems to be huge money in selling used cars. I know of two different people with used dealerships local to me and they appear to be absolutely rolling in it.

Don't you believe it - it's hard keeping bread on the table from what I've heard;)

I would however tend to agree - whenever I've picked up a used car from a small trader's house, it's inevitably a grand affair complete with stone lions etc.

Thanks for the contributions - the search for my lad's dream car goes on...!

Most of the small traders i see about are the "meet you at tescos" types, buying at auction one night and taking "a days pay" at it and moving on to their next victim, sorry, customer.

Some do ok at it, but they tend to be well established over the long term, and have a lot of money behind them.

[David87]

So do they have to have the money in the bank to buy their stock outright or is it financed somehow?

[steve-5snwi]

Both, ideally buy with cash otherwise stocking can take any profit out of a car and there is a loading fee. So if you assume a car has £1000 profit, you spend £200 on it then you have it on stocking, let's say £25 loading fee then interest charges of £100 per month we are now down to £675, then you have staff, building, fuel and insurance to cover. The Vat man takes roughly £170 per £1000 profit (regardless of costs incurred) that's now £505 profit without the overheads. That's assuming it sells quickly and you haven't spent £100 collecting it.

[Klippie]

Rich_W said:

The EXACT same Oil? Or similar?

What car, What oil please

Porsche Cayman 3.4, Exactly the same Mobil 1 New Life 0w-40 8 litres

As to turning me away...don't think so considering what they charge for a service the oil cost to them is nothing, I'd walk away no problem though.

I annoys me that car dealers tend to look on their customers as some sort of cash cow and expect you to present your wallet to be raped whenever you walk through the doors.

[darren f]

blearyeyedboy said:

^ I'm shopping with half of your budget, but it's fascinating to see, even while it sucks the enthusiasm out of me.........

Slightly off topic, my lack of enthusiasm isn't all about bargaining though. I had some joker on the phone of one dealer say he couldn't guarantee that anyone would be free to talk to me if I came in this weekend just past, so I didn't bother driving 40 miles to see that car. I'm not driving a fair distance to be told that no one can be arsed to see me. I'm feeling more than a little cheesed off with finding such dealers, though I'm sure that there are people with different attitudes out there.

Indeed, it's pretty soul destroying isn't it? Similar to yourself, but I'm now quite wary of main dealer salesmen saying they are interested in a deal in the initial enquiry call only to find all that is on offer is some tweaking of the finance deal on the full screen price. There is no willingness to work with the customer to compromise on the margin they have in the car (evidenced in the later price drops) to get the sale, the attitude is "why not just finance it?".

And this is assuming they are even interested in selling a used car on the forecourt, our budget is such that they'd rather sell us new- I can only assume the margins / commissions on the finance are better.

Also similar to yourself, we've kind of reached stalemate in our search, I've walked away from a couple of nicely specced cars that I considered to be 'over the odds' price wise- but main dealers no longer have any interest in 'talking turkey' with customers that actually have the means to pay, yet want a good deal. The PCP / finance genie is well and truly out of the bottle.

Edited by darren f on Tuesday 11th October 00:12

[Welshbeef]

darren f said:

Indeed, it's pretty soul destroying isn't it? Similar to yourself, but I'm now quite wary of main dealer salesmen saying they are interested in a deal in the initial enquiry call only to find all that is on offer is some tweaking of the finance deal on the full screen price. There is no willingness to work with the customer to compromise on the margin they have in the car (evidenced in the later price drops) to get the sale, the attitude is "why not just finance it?".

And this is assuming they are even interested in selling a used car on the forecourt, our budget is such that they'd rather sell us new- I can only assume the margins / commissions on the finance are better.

Also similar to yourself, we've kind of reached stalemate in our search, I've walked away from a couple of nicely specced cars that I considered to be 'over the odds' price wise- but main dealers no longer have any interest in 'talking turkey' with customers that actually have the means to pay, yet want a good deal. The PCP / finance genie is well and truly out of the bottle.

Edited by darren f on Tuesday 11th October 00:12

Another way is to go down the finance route then cancel it /pay it off in full after 1minths payment. Could get you the net discount you are after. But yes on the drop is how nearly all cars are sold these days firstly there is double margin in it car margin finance margin plus it then gets the person into a repurchase cycle - some will some won't but it's a reason to get you back into the showroom and an opportunity to sell.

Even yesterday a person at work has a perfectly good car nothing wrong with it - she took it in for a service and told be the dealer had said for £30/less plus deposit she could get a new one!!!So I asked her what hers was worth£10k the one she was after £32k. She had spent over the last 3 years £20k+ on PCP incl deposit.
So I asked why consider change what's wrong with it - nothing I love it. Ok so think if it this was in 18 months if you keep your car and let's say you carry on paying the £555.55pcm cost you have been paying you will own it outright and it will certainly not be worth zero by that time a 6 year old car. Thereafter all else being equal it's a net payrise of £6.7k.
She thought about it andis now going ahead with keeping it and possibly in another 3 years time give it to her son - a great solution and a prime example of sales man guff and pcp dark magic get a new car it's cheaper...yes bullst.

[JimmyConwayNW]

If the car is already priced well and is a good honest example then why try to haggle money off.

10 used cars sold at my place since Friday. 1 got a discount of £200 as I have had the car in for ages with no interest.

If the phone is ringing or the emails are coming in combined with healthy viewing stats across the advertising platforms I am confident it can achieve the price we have advertised for.

I make sure our cars are all serviced and MOT tested, where's refurbed etc all ready to go leaving very little that can be picked at.