Ask a car salesman anything...anything at all.
Discussion
Elroy Blue said:
My last car was bought from a dealer 100 miles away. I’d like to have bought it locally, but £2500 is a big incentive to travel a couple of hours.
Same here. Bought a 2 year old CRV from a Honda dealer in Newcastle, 300 miles from me in Surrey. £2000+ price difference between dealer prices in my area vs the North East. Got it delivered (£1 a mile) to a relative's address in the Midlands.Wouldn't bother with that hassle for a few hundred quid, but £2000 is a big difference. Local Honda dealer does all my servicing and are great to deal with, but I still wouldn't buy a new or newish car from them.
I'd do the same next time I change car. I don't begrudge the dealers in my area charging more - they've got regular (elderly) customers willing to pay their prices, and their overheads are presumably higher.
It's also quite often that the case that your first profit is your best profit and your first loss is your best loss.
It's a commercial decision as ever, but we do often spend too much time imagining the next punter will do a better deal on something with us than the last.
In 20 years, I've seen it happen a couple of times, but it's very much the exception rather than the rule.
It's a commercial decision as ever, but we do often spend too much time imagining the next punter will do a better deal on something with us than the last.
In 20 years, I've seen it happen a couple of times, but it's very much the exception rather than the rule.
ElectricPics said:
The Moose said:
ElectricPics said:
You can take a simplified look at balloon finance as three interconnected inflated balloons. The financed amount is equally split between all three - deposit, payments and final payment. Squeeze one of them and the other two increase in size. Squeeze two of them and the other one increases in size a lot, but the amount of air (money) never changes.
What does change is the amount of interest you pay.
Butter Face said:
Best to just take it in as is IMO. You’re u likely to get £600 more for it without the light on if you spend £600 on it.
Dealer will auction/trade it regardless.
Thanks, didn't acknowledge this a couple of days ago. I'll leave it as is then, or try and youtube how to do it myself Dealer will auction/trade it regardless.
The Moose said:
Simplified to the point of missing the most important part?!
The most important part will be different for everybody.Once you have selected which 3 balloons you are going to use ( i.e. which particular finance scheme and which particular rate of interest ) most customers will accept the final payment balloon offered by the finance company and adjust the size of deposit and monthly payment to suit their preferred budget.
Of course, the bigger deposit that you pay, and the smaller balloon you choose, then the less £ interest you will pay, but chasing a less expensive car would also have the same effect.
Paying the absolute least amount of interest possible is seldom the over riding consideration.
Butter Face said:
CharlesdeGaulle said:
Butter Face said:
Elroy Blue said:
Fast Bug said:
And by matching the price then potentially they would've lost money, I'd rather lose a sale than lose money.
But they lost money because they eventually reduced the price to below what I paid for the other oneMy logic is sound, you’re more likely to sell a car and make money by turning away a loss making deal and waiting for another customer than you are to have to reduce the same car to a level below that of the aforementioned deal at a later date. It’s literally how our business works.
(working on the assumption that mileage, condition, service history are similar).
Wooda80 said:
Paying the absolute least amount of interest possible is seldom the over riding consideration.
Indeed. But customers tend to want lowest deposit, biggest discount, lowest monthly payment, lowest balloon to maximise their theoretical equity position and of course lowest, preferably 0% APR on top. 
xjay1337 said:
The question I would have is assuming both are franchised dealers why is one car £2500 more expensive than a very similar car ?
(working on the assumption that mileage, condition, service history are similar).
Answered on the previous page:(working on the assumption that mileage, condition, service history are similar).
I said:
Monthly write-downs and 90/120/180 day stocking policies are a financial management nightmare and a driver of many of the practices despised by retail customers in the motor trade.
You might have two identical spec, mileage and colour vehicles on the forecourt at the same retail price - one was bought three months ago though and has since incurred prep costs, the other is fresh in. Which one would you rather sell? The fresh one with a little discount has a nice profit in it as it'll have been bought in for a lower price, but commercially you'll want the older one gone first.
That leads to the scenario where a dealer has broadly similar vehicles at different prices, customers invariably want the nice clean fresh condition stock, rather than the otherwise similar but cheaper asking price/more heavily/readily discountable one that's a bit grubbier by now, tyres and battery flat and so on.
Or when two competing dealers (within or outwith the same group) have similar stock at similar price but one is "keen to do a deal" and the other "couldn't be arsed" - they generally know they'll either be expected to price match the other one as they need it gone quicker.
All part of the fun and why there's never a quick, simple answer to "what's the best deal on X, Y or Z". So many contributing factors and variables to weigh up as a seller.
You might have two identical spec, mileage and colour vehicles on the forecourt at the same retail price - one was bought three months ago though and has since incurred prep costs, the other is fresh in. Which one would you rather sell? The fresh one with a little discount has a nice profit in it as it'll have been bought in for a lower price, but commercially you'll want the older one gone first.
That leads to the scenario where a dealer has broadly similar vehicles at different prices, customers invariably want the nice clean fresh condition stock, rather than the otherwise similar but cheaper asking price/more heavily/readily discountable one that's a bit grubbier by now, tyres and battery flat and so on.
Or when two competing dealers (within or outwith the same group) have similar stock at similar price but one is "keen to do a deal" and the other "couldn't be arsed" - they generally know they'll either be expected to price match the other one as they need it gone quicker.
All part of the fun and why there's never a quick, simple answer to "what's the best deal on X, Y or Z". So many contributing factors and variables to weigh up as a seller.
Elroy Blue said:
Fast Bug said:
And by matching the price then potentially they would've lost money, I'd rather lose a sale than lose money.
But they lost money because they eventually reduced the price to below what I paid for the other oneSay a car owes you £9K and you're listing it for £10K. Customer asks you to match a low-priced (for whatever reason) car from elsewhere at £8K. Accept, and you're immediately £1K down. Refuse, and you still have a good chance of selling to someone else for a profit, particularly once the £8K car has been snapped up by someone else.
silentbrown said:
Elroy Blue said:
Fast Bug said:
And by matching the price then potentially they would've lost money, I'd rather lose a sale than lose money.
But they lost money because they eventually reduced the price to below what I paid for the other oneSay a car owes you £9K and you're listing it for £10K. Customer asks you to match a low-priced (for whatever reason) car from elsewhere at £8K. Accept, and you're immediately £1K down. Refuse, and you still have a good chance of selling to someone else for a profit, particularly once the £8K car has been snapped up by someone else.
DanL said:
silentbrown said:
Elroy Blue said:
Fast Bug said:
And by matching the price then potentially they would've lost money, I'd rather lose a sale than lose money.
But they lost money because they eventually reduced the price to below what I paid for the other oneSay a car owes you £9K and you're listing it for £10K. Customer asks you to match a low-priced (for whatever reason) car from elsewhere at £8K. Accept, and you're immediately £1K down. Refuse, and you still have a good chance of selling to someone else for a profit, particularly once the £8K car has been snapped up by someone else.
The corollary to the opposite argument is that dealers should accept any offer, for fear that no subsequent offer would be as good.
Obviously, occasionally that's true. But mostly, it isn't.
And the times it isn't have to pay for the times it is.
Wooda80 said:
The Moose said:
Simplified to the point of missing the most important part?!
The most important part will be different for everybody.Once you have selected which 3 balloons you are going to use ( i.e. which particular finance scheme and which particular rate of interest ) most customers will accept the final payment balloon offered by the finance company and adjust the size of deposit and monthly payment to suit their preferred budget.
Of course, the bigger deposit that you pay, and the smaller balloon you choose, then the less £ interest you will pay, but chasing a less expensive car would also have the same effect.
Paying the absolute least amount of interest possible is seldom the over riding consideration.
The Moose said:
The most important part should be how to get from where you're at to disposing of the car in x years for the least amount of money possible, while still being within your financial bounds. Interest plays a good part in that calculation (excluding 0% obviously).
Sounds like a nice theory but in reality unless you know exactly when you intend to dispose of the car, stick rigidly to that plan, and somehow know for certain exactly what the disposal value of your car will be, then you can never know the answer to that question at the point of purchase.It's the classic "Oh, I'd hoped it would be worth more than that" come trade in time.
Some people will indeed start out from your premise of " I want to buy a <year> <make> <model> <mileage>, now what's the cheapest way" , which if you have the funds spare and you don't put a value on preserving your capital would often be to pay cash.
Other people will start from " I want to spend £x or I want to spend £y per month. Now what's the best car I can get" and as long as the car falls within their budget then any capital spent is a sunk cost and any value at disposal time is a bonus.
Do salesmen have a nosy at what is in for service and MOT and use that as a starting point for new business? My car came from a dealer over 100 miles away, simply because they had the spec I wanted, but I have always used the local dealer for servicing. I've been surprised that I've not had a call saying "can we supply your car next time, you don't have to go all the way to XYZ".
RicksAlfas said:
Do salesmen have a nosy at what is in for service and MOT and use that as a starting point for new business? My car came from a dealer over 100 miles away, simply because they had the spec I wanted, but I have always used the local dealer for servicing. I've been surprised that I've not had a call saying "can we supply your car next time, you don't have to go all the way to XYZ".
Yes. The service drive should be a good source of business. RicksAlfas said:
Do salesmen have a nosy at what is in for service and MOT and use that as a starting point for new business? My car came from a dealer over 100 miles away, simply because they had the spec I wanted, but I have always used the local dealer for servicing. I've been surprised that I've not had a call saying "can we supply your car next time, you don't have to go all the way to XYZ".
Used to speak to service customers all the time, if they were sitting waiting, invite them over for a chat, it's worth the 5 mins or so minutes and sometimes an appointment made for them to come back when I had more time, normally worth 4-5 deals a month?Wooda80 said:
The Moose said:
The most important part should be how to get from where you're at to disposing of the car in x years for the least amount of money possible, while still being within your financial bounds. Interest plays a good part in that calculation (excluding 0% obviously).
Sounds like a nice theory but in reality unless you know exactly when you intend to dispose of the car, stick rigidly to that plan, and somehow know for certain exactly what the disposal value of your car will be, then you can never know the answer to that question at the point of purchase.Also, x years really can be x years! When I bought my 996, I was happy to buy it as I got a great deal and knew that if I sold it in 6 months or 6 years I was likely going to do ok out of my ownership. At the same time, my old man just got a 760Li and he knew that the chances are he'd get screwed on the price come resale time...at any point. He just wanted the car.
If a consumer just goes in wanting a new shiny toy and they don't give a crap about anything else, then yes - they are likely going to get financially screwed on way or another. That's why I said should.
Also, you can get a pretty good idea of what the disposal value of a car for most things is going to be. When buying a car, I certainly take a look at what I think it'll be worth in 1/2/5 years to see what's likely to happen to the value.
Wooda80 said:
Some people will indeed start out from your premise of " I want to buy a <year> <make> <model> <mileage>, now what's the cheapest way" , which if you have the funds spare and you don't put a value on preserving your capital would often be to pay cash.
Other people will start from " I want to spend £x or I want to spend £y per month. Now what's the best car I can get" and as long as the car falls within their budget then any capital spent is a sunk cost and any value at disposal time is a bonus.
I don't put a value on preserving my capital - I put a value on preserving my asset base (of which a vehicle forms one part of). More worried about net worth than cash in the bank (if that makes sense).Other people will start from " I want to spend £x or I want to spend £y per month. Now what's the best car I can get" and as long as the car falls within their budget then any capital spent is a sunk cost and any value at disposal time is a bonus.
The second way is a fine way to think if the purchase price is a small %age of your net worth.
Anyone else's month being a bit weird?
Personally my month has been great (said every PH'er ever) but as a dealer we have been struggling in what is usually a strong month.
Lack of stock due to those above worried about the guide drop this month and good weather for Scotland has seen footfall at a real low.
Is it the same down south ?
Personally my month has been great (said every PH'er ever) but as a dealer we have been struggling in what is usually a strong month.
Lack of stock due to those above worried about the guide drop this month and good weather for Scotland has seen footfall at a real low.
Is it the same down south ?
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