Ask a car salesman anything...anything at all (Vol. 2).

Ask a car salesman anything...anything at all (Vol. 2).

Author
Discussion

robsco

7,085 posts

140 months

Sunday 24th January
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Countdown said:
How do dealerships decide what price to put on a used car? Is there some central pricing guide? Do you look at what other franchise dealers are charging?

Just curious because I've been window shopping for Mercedes GLCs and I've seen an 65-plate with more mileage on sale for more than a 16-plate with lower mileage (and better trim level). Not by much (about £1k)
Normally a dealer would use CAP as a guide to value a car as a part exchange. You’d then use CAP Clean as a base point from which to price the car on the forecourt. Naturally some cars are not as desirable as others, so this is a guide only.

For instance, an Audi main dealer may pay CAP Clean for an Audi part exchange and then, as a franchise dealer, be able to price from that. A non franchise dealer cannot do the same, he needs to be able to beat the Audi dealer on price if he wants to sell his car; therefore he either trims his margin from the Clean figure, or needs to buy the car for less. Of course, you would always look at what other cars are advertised for when pricing up a used car.

Pricing cars correctly isn’t an art, you’ve just got to have a fair knowledge of which cars are desirable and which cars aren’t, something that comes from experience. And of course, even then, you’re not always guaranteed to get it right!

dontfollowme

1,023 posts

197 months

Sunday 24th January
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Is this last week of Jan going to help me secure a decent deal on an approved used VW? It's 2015 plate if that makes any difference.

Bemmer

828 posts

166 months

Sunday 24th January
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robsco said:
Normally a dealer would use CAP as a guide to value a car as a part exchange. You’d then use CAP Clean as a base point from which to price the car on the forecourt. Naturally some cars are not as desirable as others, so this is a guide only.

For instance, an Audi main dealer may pay CAP Clean for an Audi part exchange and then, as a franchise dealer, be able to price from that. A non franchise dealer cannot do the same, he needs to be able to beat the Audi dealer on price if he wants to sell his car; therefore he either trims his margin from the Clean figure, or needs to buy the car for less. Of course, you would always look at what other cars are advertised for when pricing up a used car.

Pricing cars correctly isn’t an art, you’ve just got to have a fair knowledge of which cars are desirable and which cars aren’t, something that comes from experience. And of course, even then, you’re not always guaranteed to get it right!
Cap is used more for buying and referenced throughout the trade and Auctions. Selling is more reliant on Autotrader now especially for pricing stock retailing upto £50K.The price bands,Low,great,good,fair and high means the retailer really has no choice but to follow the market to which they dictate,Love it or Hate it Autotrader has the monopoly and the dealers can't ignore it so it doesn't matter what Cap says you can retail at it's what Autotrader tells you what you can ask for it.

buyer&seller

540 posts

142 months

Sunday 24th January
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Bemmer said:
Cap is used more for buying and referenced throughout the trade and Auctions. Selling is more reliant on Autotrader now especially for pricing stock retailing upto £50K.The price bands,Low,great,good,fair and high means the retailer really has no choice but to follow the market to which they dictate,Love it or Hate it Autotrader has the monopoly and the dealers can't ignore it so it doesn't matter what Cap says you can retail at it's what Autotrader tells you what you can ask for it.
True enough, but when I was using Autotrader to advertise I'd use their retail price and work my margin back from there, so ignoring the CAP trade figure too, although I wasn't doing huge numbers.

robsco

7,085 posts

140 months

Sunday 24th January
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Bemmer said:
Cap is used more for buying
The art of selling is in the buying.

NMNeil

1,567 posts

14 months

Monday 25th January
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robsco said:
The art of selling is in the buying.
Like the old saying "Buy junk, but sell antiques"

catfood12

1,088 posts

106 months

Monday 25th January
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dontfollowme said:
Is this last week of Jan going to help me secure a decent deal on an approved used VW? It's 2015 plate if that makes any difference.
Likewise. I'm stalking an approved used VW, 20/2020, Ex-Demo, nice spec, 5.5K miles. They've had it on since November, dropped it about £1K in all in three increments. It will soon be on the 90 day stock book. What will happen? They obvs got an allowance for a demo reg, it did have 4K when first advertised, now 5.5K, so someone is still tooling about in it. Do they drop until it sells, put in back into the network or trade it ?

Showrooms closed, numbers must be down. When do I stick or twist ?

Fast Bug

9,251 posts

125 months

Monday 25th January
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Only the dealers concerned can answer that. Not all dealers have the same policies in place, some will sit on stock until it's sold, some will trade it out at 90 days, some at 180. There are no hard and fast rules with used cars sadly.

dontfollowme

1,023 posts

197 months

Monday 25th January
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Thanks Fast Bug. I usually buy privately so it will be interesting to see how this plays out.

Fast Bug

9,251 posts

125 months

Monday 25th January
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It's worth asking the question if you can pay for it before the end of the month. It might just push someone to target smile

jason61c

4,166 posts

138 months

Monday 25th January
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What do car dealers think of ‘carwow’?

One local dealer offered to match a price and another said they couldn’t match it, why would one do it and not another?

Both on brand new cars. I can’t see the logic of not trying to get near a price when we live in a global/national market now anyway.

Car in question was a Landcrusier.

Fast Bug

9,251 posts

125 months

Monday 25th January
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jason61c said:
What do car dealers think of ‘carwow’?

One local dealer offered to match a price and another said they couldn’t match it, why would one do it and not another?

Both on brand new cars. I can’t see the logic of not trying to get near a price when we live in a global/national market now anyway.

Car in question was a Landcrusier.
Quite often dealers will advertise loss making deals on Carwow, and then pay carwow for that lead making an even bigger loss. From time to time you might sell something at a loss, but why would you if you don't have to?

spikeyhead

12,387 posts

161 months

Monday 25th January
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Fast Bug said:
jason61c said:
What do car dealers think of ‘carwow’?

One local dealer offered to match a price and another said they couldn’t match it, why would one do it and not another?

Both on brand new cars. I can’t see the logic of not trying to get near a price when we live in a global/national market now anyway.

Car in question was a Landcrusier.
Quite often dealers will advertise loss making deals on Carwow, and then pay carwow for that lead making an even bigger loss. From time to time you might sell something at a loss, but why would you if you don't have to?
If it means you make the quota to get the manufacturers kickback for selling enough cars to be a "good dealer" then that loss making sale can make a lot of money

rehab71

3,359 posts

154 months

Monday 25th January
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jason61c said:
What do car dealers think of ‘carwow’?

One local dealer offered to match a price and another said they couldn’t match it, why would one do it and not another?

Both on brand new cars. I can’t see the logic of not trying to get near a price when we live in a global/national market now anyway.

Car in question was a Landcrusier.
Honestly? - s!

rehab71

3,359 posts

154 months

Monday 25th January
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[quote=buyer&seller]
Bemmer said:
Cap is used more for buying and referenced throughout the trade and Auctions. Selling is more reliant on Autotrader now especially for pricing stock retailing upto £50K.The price bands,Low,great,good,fair and high means the retailer really has no choice but to follow the market to which they dictate,Love it or Hate it Autotrader has the monopoly and the dealers can't ignore it so it doesn't matter what Cap says you can retail at it's what Autotrader tells you what you can ask for it.
True enough, but when I was using Autotrader to advertise I'd use their retail price and work my margin back from there, so ignoring the CAP trade figure too, although I wasn't doing huge numbers.
That's what I do when buying from Motab as they're so expensive, had some good wins with them

dontfollowme

1,023 posts

197 months

Monday 25th January
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Fast Bug said:
It's worth asking the question if you can pay for it before the end of the month. It might just push someone to target smile
Good idea but I'm more than likely not taking the finance. I didn't dismiss it entirely. I hope all the rapport building doesn't go to waste wink

jason61c

4,166 posts

138 months

Monday 25th January
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rehab71 said:
Honestly? - s!
I've just realised that when you quote someone it shows the work PH have hidden smile

What makes you say that? does it not help speed up sales, push buyers who to know what they want?

Fast Bug

9,251 posts

125 months

Monday 25th January
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Why sell at a loss if you don't need to? If another dealer wants to sell a vehicle at a loss, then thats their perogative. It doesn't mean that others have to do the same

ToastMan76

271 posts

37 months

Monday 25th January
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Fast Bug said:
Why sell at a loss if you don't need to? If another dealer wants to sell a vehicle at a loss, then thats their perogative. It doesn't mean that others have to do the same
Simple - rebates & bonuses. Selling a car for a 1k loss may mean hitting a volume target and bringing in 10k of back end margin from the manufacturer. These figures can sometimes be hugely inflated too so dealers may order a ton of cars for showroom with no customer orders to hit rebates, then push them out cheap - especially true with special clearance models with ‘night packs’ that are using up manufacturers last components before the line gets swapped to a new model!

Fast Bug

9,251 posts

125 months

Tuesday 26th January
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I'm fully aware of how bonus schemes and volume revates are structured. My question still remains though, why sell something at a loss if you don't have to?