Ask a car salesman anything...anything at all.

[4941cc]

xjay1337 said:

I often wonder what , for example , a VW dealer would "buy" a £30,000 RRP car at.
I've always imagined it's around 75-80% of the total RRP.

Miles out. Usually consigned to the dealer at list price minus the front end margin. Usually 7-8% with a similar amount that can be retrospectively credited back from the manufacturer for jumping through various hoops, up to around 14-15% max.

Fleet deals usually attract extra manufacturer margin, on the basis that people are ordering multiple units at a time. That can take things to 20%. Ford and Vauxhall were 27% around ten years ago.

The other things like deposit contribution and fixed amounts come from manufacturer incentives, not out of dealer margin and come from marketing strategy to manage stock levels of particular models, greater support for runout models, none for newly introduced or high demand models.

Factory gate price might be 30% of the RRP, but then a margin gets added to the manufacturer. That is the profit that OEMs make and reinvest in new model development, marketing etc. The manufacturer then consigns it to the national agent in the country of sale, that's usually around 60% of RRP, that agent then consigns it to the selling dealer at the above 92-93% figure and the dealer earns back their profit - or doesn't...

[4941cc]

Theguy5 said:

So do you as a dealership buy the cars when they are ordered, or just act as a middle man between manufacturer and customer and the dealership gets ‘commision’ from the manufacturer when they sell a car?

The dealership only pays for new vehicles when they are registered to the customer, or to the business themselves. Until that point they normally pay a daily stocking charge, calculated as a percentage of the new list price, for a maximum of usually 180 days in stock, by which time it must be either retailed or self-registered (so the manufacturer always gets their money within 6 months of build). However long it takes the dealer to shift it after that is no longer the manufacturer's concern. Registrations and reportable market share are all they care about.

If unsold and not self-registered, the manufacturer invoices the dealer for the vehicle and they have to pay for it.

[Fast Bug]

Ford and Vauxhall fleet terms are far higher than that for any kind of sensible volume. BMW offer more than that on core models at the drop of a hat for smaller opportunities

[Sheepshanks]

4941cc said:

Miles out. Usually consigned to the dealer at list price minus the front end margin. Usually 7-8% with a similar amount that can be retrospectively credited back from the manufacturer for jumping through various hoops, up to around 14-15% max.

Fleet deals usually attract extra manufacturer margin, on the basis that people are ordering multiple units at a time. That can take things to 20%. Ford and Vauxhall were 27% around ten years ago.

The other things like deposit contribution and fixed amounts come from manufacturer incentives, not out of dealer margin and come from marketing strategy to manage stock levels of particular models, greater support for runout models, none for newly introduced or high demand models.

Factory gate price might be 30% of the RRP, but then a margin gets added to the manufacturer. That is the profit that OEMs make and reinvest in new model development, marketing etc. The manufacturer then consigns it to the national agent in the country of sale, that's usually around 60% of RRP, that agent then consigns it to the selling dealer at the above 92-93% figure and the dealer earns back their profit - or doesn't...

What kind of discount levels do pac/pack? - cars bought as a job lot - come in at?

Little Mitsubishi dealer near us bought 30 Colts and they were being advertised at 40% off list, and a Golf we bought was apparently bought in the same way - caused a bit of a kerfuffle as they couldn't sell us the one we'd test driven and agreed a price on as it wasn't one of the pack cars so they fetched one from another group dealership.

[Fast Bug]

Again, how long is a piece of string. It varies from manufacturer to manufacturer, targets and how many units are taken. At Renault we once got a huge amount of support to take 5 Renault Fluence, but that doesn't mean that the support would be the same for a Honda dealer taking 10 Jazz, or a Vauxhall dealer taking 100 Combos.

It all depends how badly the manufacturer wants to shift the units

[Blakewater]

Is there a big profit in optional extras and does that break down in a similar way at each part of the factory to dealer process?

Is there any incentive for dealers to sell better specced cars?

[4941cc]

Blakewater said:

Is there a big profit in optional extras and does that break down in a similar way at each part of the factory to dealer process?

%age breakdown the same as the base vehicle usually.

Blakewater said:

Is there any incentive for dealers to sell better specced cars?

Only insofar as it makes it easier to retail for that dealer at the end of term, plus a tiny bit of incremental profit up front.

Mostly not really bothered with now as it's more than likely getting handed back for the finance company to remarket as it's not worth the GFV anyway, so odds are it won't be retailed again at the supplying dealer.

Seems daft to me, but there we go.

[lornemalvo]

When buying a used car, is there a definitive way to find out whether the list price when new exceeded 40k, invoking the extra tax imposed by our greedy Government? Obviously the list price of new cars can be looked up, but a 2 year old car with a less than obvious list of optional extras is a different matter. I'm deliberately ignoring the option of asking the seller or selling dealer, because I understand some people have been stung by a tax bill they did not expect to have to pay for a few years after buying the car. It's not possible to contact the previous owner because dealers cite the bullst data protection laws, which prevent Joe Public from finding out anything about anyone, although companies seem able to sell our data to others for marketing purposes.

[4941cc]

lornemalvo said:

When buying a used car, is there a definitive way to find out whether the list price when new exceeded 40k, invoking the extra tax imposed by our greedy Government?

Not particularly, short of contacting the supplying dealer and asking them for the original P11D figure when new (list price irrespective of discount and not including £55 first registration fee and 1st year's VED).

You're not asking for anybody's personal information or even what the vehicle was actually sold for, so there shouldn't be any GDPR issues in effect.

Some manufacturer's like BMW, Mercedes and VAG all have a database with that screen on, so from the reg or VIN should be able to tell you easily enough. Others don't.

[Fast Bug]

I think you can check how much VED is on the DVLA website, you just need the reg number

[Wooda80]

It's printed in the Notes section on the front page of the V5 " This vehicle is subject to an additional rate of Vehicle Excise Duty until <date> as the original list price was in excess of £40000"

[BFleming]

Fast Bug said:

I think you can check how much VED is on the DVLA website, you just need the reg number

Unfortunately not - you need the V5 document number. Bizarre, isn't it?

[Theguy5]

Options has become a trigger of mine recently. It seems that things that seemed to be coming standard on certain cars have now disappeared into ‘packs’, can’t believe the amount of ‘premium’ cars you see driving round with halogen lights and cloth seats.

Want electric seats? Sure! All you have to do is order the premium interior pack that includes extra colours on your ambient lighting, super duper soft leather seats and LED map lights, that will be £3k please.

Want upgraded alloys? Sure! That’s part of the ‘shadow pack’, this includes a boat load of rubbish you probably won’t even notice! £6k please!

[Fast Bug]

Theguy5 said:

Options has become a trigger of mine recently. It seems that things that seemed to be coming standard on certain cars have now disappeared into ‘packs’, can’t believe the amount of ‘premium’ cars you see driving round with halogen lights and cloth seats.

Want electric seats? Sure! All you have to do is order the premium interior pack that includes extra colours on your ambient lighting, super duper soft leather seats and LED map lights, that will be £3k please.

Want upgraded alloys? Sure! That’s part of the ‘shadow pack’, this includes a boat load of rubbish you probably won’t even notice! £6k please!

It's easier for them all to be bundled up in packs as that means less vehicles to put through WLTP testing.

[Sheepshanks]

4941cc said:

Blakewater said:

Is there any incentive for dealers to sell better specced cars?

Only insofar as it makes it easier to retail for that dealer at the end of term, plus a tiny bit of incremental profit up front.

Mostly not really bothered with now as it's more than likely getting handed back for the finance company to remarket as it's not worth the GFV anyway, so odds are it won't be retailed again at the supplying dealer.

Seems daft to me, but there we go.

Are you saying that people don't really bother adding options so much now?

If so, that seems like good news to me - adding stuff that mostly you think should be included anyway has always been frustrating. I thought SEAT's 'easymove' thing was brilliant when daughter's Ateca even had metallic included. But reading the Ateca forum, some owners are really pissed about not being able to minutely customise their cars.

[Eyersey1234]

Would a dealer still have to pay a stocking charge on a customers factory build order from when it arrived at the garage to when it was registered?

[Blakewater]

Is there a point at which a dealer is obliged to take and retain in stock a customer ordered car if a customer factory orders a car and then cancels the order?

A friend of mine bought an Audi TT saying the dealer gave him a good deal because it was a cancelled customer order.

[nickfrog]

4941cc said:

The manufacturer then consigns it to the national agent in the country of sale, that's usually around 60% of RRP

When a national agent like VW UK then sells on to their captive finance house VW FS, do they mark the price up with a nominal inter-company margin, perhaps 5%?

Or do VW FS buy direct from the factory at the same typical 60% of RRP ? Cheers.

[HTP99]

Blakewater said:

Is there a point at which a dealer is obliged to take and retain in stock a customer ordered car if a customer factory orders a car and then cancels the order?

A friend of mine bought an Audi TT saying the dealer gave him a good deal because it was a cancelled customer order.

Generally once a car is ordered (with us), it is ours, even before it's built, we can leave it in general view though for someone to grab if they want and in the case of my colleague mucking up an order on a chassis cab and ordering the wrong kind so the conversion couldn't be fitted but it was already delivered to the converters, we can speak to someone who will actively let all dealers know that it is available should anyone be after one.

Problem with this chassis cab muck up, it currently must be registered by 31st August due to the new emissions regs coming in to force from September, we have applied to have it put on derogation but this may not happen.

Edited by HTP99 on Friday 19th July 10:05

[Fast Bug]

nickfrog said:

When a national agent like VW UK then sells on to their captive finance house VW FS, do they mark the price up with a nominal inter-company margin, perhaps 5%?

Or do VW FS buy direct from the factory at the same typical 60% of RRP ? Cheers.

VWFS (or any leasing company for that matter) will have their own terms in place, their nominated dealer will then apply those terms when the vehicle is ordered.

Also with all manufacturers I've worked for, vehicles are consigned at list price less basic dealer margin which is typically around 7% or so

HTP99 said:

Generally once a car is ordered (with us), it is ours, even before it's built, we can leave it in general view though for someone to grab if they want and in the case of my colleague mucking up an order on a chassis cab and ordering the wrong kind so the conversion couldn't be fitted but it was already delivered to the converters, we can speak to someone who will actively let all dealers know that it is available should anyone be after one.

Problem with this chassis cab muck up, it currently must be registered by 31st August due to the new emissions regs coming in to force from September, we have applied to have it put on derogation but this may not happen.

Edited by HTP99 on Friday 19th July 10:05

Can you not get it converted? At least then it can be registered if need be. We've done this with a load of chassis cabs just in case with can't get derogation on them