20% off a new car? Really?

20% off a new car? Really?

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Discussion

Ari

Original Poster:

19,348 posts

216 months

Monday 10th November 2014
quotequote all
Should I be filing this under 'too good to be true', or are these kinds of discounts really available?

http://www.orangewheels.co.uk/enquiries/c2b1c0/enq...


Earthdweller

13,592 posts

127 months

Monday 10th November 2014
quotequote all
Simply ... And in one word .... Yes

Chris Hinds

482 posts

166 months

Monday 10th November 2014
quotequote all
Easy enough on the right car... I got 17% off at a main dealer! albeit BMW not Merc, so yes good deal but not much more than you can get anyway

Ari

Original Poster:

19,348 posts

216 months

Monday 10th November 2014
quotequote all
Fair enough, thanks. So what is this type of company's angle? It doesn't appear that they supply the car so are they after trying to wangle an introductory commission from the dealer or somesuch?


IanCress

4,409 posts

167 months

Monday 10th November 2014
quotequote all
Drive the deal can knock over a grand off that price.

thelawnet

1,539 posts

156 months

Monday 10th November 2014
quotequote all
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%. This allows them to boast of 'free' finance and other such tricks.

Sometimes when a car is new/in demand it will sell at/close to list, but when it's old and due a refresh, the price can be cut. Or if rival cars are selling better. Vw will give only £700 off a base Up!, but £15k off a Pheaton.

Hungrymc

6,673 posts

138 months

Monday 10th November 2014
quotequote all
thelawnet said:
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%. This allows them to boast of 'free' finance and other such tricks.

Sometimes when a car is new/in demand it will sell at/close to list, but when it's old and due a refresh, the price can be cut. Or if rival cars are selling better. Vw will give only £700 off a base Up!, but £15k off a Pheaton.
And some will be at the full retail price (and without much reduction on a nearly new one)

CarlT

3,423 posts

248 months

Monday 10th November 2014
quotequote all
thelawnet said:
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%. This allows them to boast of 'free' finance and other such tricks.

Sometimes when a car is new/in demand it will sell at/close to list, but when it's old and due a refresh, the price can be cut. Or if rival cars are selling better. Vw will give only £700 off a base Up!, but £15k off a Pheaton.
There is a big difference between inflating a price and having a margin. 25% is very rare to have on cars. You can be assured that Tesco and the like have lots more than 25% margin in tins of beans etc.

unrepentant

21,272 posts

257 months

Monday 10th November 2014
quotequote all
thelawnet said:
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%.
Really? Can you name those brands because I'm looking for a new car and I'd really like to know which ones are inflated by 25% so that I can do the best deal for myself. You sound like you're a well informed individual so help a brother out and give me the inside scoop on these brands.

Breath well and truly baited in anticipation.

Tribal Chestnut

2,997 posts

183 months

Monday 10th November 2014
quotequote all
unrepentant said:
Really? Can you name those brands because I'm looking for a new car and I'd really like to know which ones are inflated by 25% so that I can do the best deal for myself. You sound like you're a well informed individual so help a brother out and give me the inside scoop on these brands.

Breath well and truly baited in anticipation.
If 25℅ is the dealer's gross margin, I feel it is unfair to say a price is 'inflated' by this amount.

WTFWT

841 posts

224 months

Monday 10th November 2014
quotequote all
Last week, my Mum took delivery of a new BMW 335d touring x drive that she bought through drive the deal. Saved over £11k on list price - about 25% off.

john banks

275 posts

191 months

Monday 10th November 2014
quotequote all
£20k off a new big Audi is quite easy. I bought one at 6 months old for £25k off and a year old for £35k off list.

That the six month old one was then traded in for £1k less at 12 months was gratifying given the bath it could have been.

Edited by john banks on Monday 10th November 22:15

Dan Friel

3,639 posts

279 months

Monday 10th November 2014
quotequote all
Buying a fiesta red edition through drive the deal.. Paying 78% of list and that includes some full price options.

Roo

11,503 posts

208 months

Monday 10th November 2014
quotequote all
thelawnet said:
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%. This allows them to boast of 'free' finance and other such tricks.

Sometimes when a car is new/in demand it will sell at/close to list, but when it's old and due a refresh, the price can be cut. Or if rival cars are selling better. Vw will give only £700 off a base Up!, but £15k off a Pheaton.
Righto.

Normal dealer margin is roughly 9% with 4-5% back end bonus.

If a manufacturer decides to offer a deal on a car to move some stock it is expected that the dealers will pass all that bonus on. Leaving them with only their margin, most of which they will have to give away in order to do the deal.

To suggest that the list price has 25% margin in it is laughable.

Ari

Original Poster:

19,348 posts

216 months

Monday 10th November 2014
quotequote all
john banks said:
£20k off a new big Audi is quite easy. I bought one at 6 months old for £25k off and a year old for £35k off list.

That the six month old one was then traded in for £1k less at 12 months was gratifying given the bath it could have been.

Edited by john banks on Monday 10th November 22:15
I'm perhaps missing something here, but aren't those examples both secondhand cars ?

Fast Bug

11,718 posts

162 months

Monday 10th November 2014
quotequote all
There's margin in options...

Sheepshanks

32,804 posts

120 months

Monday 10th November 2014
quotequote all
unrepentant said:
thelawnet said:
Car list prices have a lot of margin in. For some brands its normal to inflate the price by 25%.
Really? Can you name those brands because I'm looking for a new car and I'd really like to know which ones are inflated by 25% so that I can do the best deal for myself. You sound like you're a well informed individual so help a brother out and give me the inside scoop on these brands.

Breath well and truly baited in anticipation.
There's typically slightly more than 50% gross margin in a car.

timberman

1,284 posts

216 months

Monday 10th November 2014
quotequote all
we got roughly 20% off list price on my wifes Vw through drive the deal.

when we approched the local dealers to see if they would match it or get somewhere near, they didn't even seem interested in trying.

Roo

11,503 posts

208 months

Monday 10th November 2014
quotequote all
Sheepshanks said:
There's typically slightly more than 50% gross margin in a car.
Just assuming for one minute that that figure is correct, it may be or it may be not, what is the net figure after taking into account all the overheads?

Fast Bug

11,718 posts

162 months

Monday 10th November 2014
quotequote all
timberman said:
we got roughly 20% off list price on my wifes Vw through drive the deal.

when we approched the local dealers to see if they would match it or get somewhere near, they didn't even seem interested in trying.
If a dealer is no where near target they probably won't want to do the deal as it could lose them money. If the dealer has hit, or is near to target then they'l do the deal as they'll get back end bonus monies for hitting target