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

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

Author
Discussion

Auto810graphy

1,351 posts

91 months

Tuesday 2nd March 2021
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Blakewater said:
Dealers are posting pics of their 21 plate handovers. There are always people who've travelled a long way to buy cars from specific dealers.

This guy has gone from Scotland to Salisbury to buy a brand new 3 Series from this particular dealer. Possibly a Carwow deal or similar or they just undercut nearer dealers by enough margin to warrant the trip.

Has any salesman here had someone travel a long way for a car and why do people do it?

https://twitter.com/Marshall_BMW/status/1366438080...
Normally find it’s the other way with Northern / Scottish dealers being cheaper than down South.


Sheepshanks

32,412 posts

118 months

Tuesday 2nd March 2021
quotequote all
Auto810graphy said:
Normally find it’s the other way with Northern / Scottish dealers being cheaper than down South.
I think the rule is that it's opposite to the way you want it to be!

Apparently CarWow dealers know how far away you are and I've seen it suggested they quote lower the further away they are.

That was certainly my experience with a VW. But a bit of back and forth with one of our local dealers and they matched the price, and then came down more when we visited.

Eyersey1234

2,893 posts

78 months

Friday 12th March 2021
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A question for the new car sales guys. Given that showrooms aren't allowed to open at the moment are you still given sales targets?

Save Ferris

2,683 posts

212 months

Friday 12th March 2021
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Eyersey1234 said:
A question for the new car sales guys. Given that showrooms aren't allowed to open at the moment are you still given sales targets?
Yes!
With new cars, it’s ALL about prospecting existing customers, and finance (PCP) renewals.

mcflurry

9,077 posts

252 months

Monday 15th March 2021
quotequote all
Sheepshanks said:
I think the rule is that it's opposite to the way you want it to be!

Apparently CarWow dealers know how far away you are and I've seen it suggested they quote lower the further away they are.

That was certainly my experience with a VW. But a bit of back and forth with one of our local dealers and they matched the price, and then came down more when we visited.
My BiL was looking at a new VW Tiguan. It was a little over his budget, so he asked for £500 off to seal the deal.
The dealer wouldn't, so he walked away and ordered a Volvo XC60 that afternoon.
That evening, the same VW dealership offered a deal on the same spec Tiguan, through carwow with £2000 off..

Assuming everything else is even, why would a dealer take the £2000 less and pay commission to carwow?

blue_haddock

3,112 posts

66 months

Monday 15th March 2021
quotequote all
Blakewater said:
Dealers are posting pics of their 21 plate handovers. There are always people who've travelled a long way to buy cars from specific dealers.

This guy has gone from Scotland to Salisbury to buy a brand new 3 Series from this particular dealer. Possibly a Carwow deal or similar or they just undercut nearer dealers by enough margin to warrant the trip.

Has any salesman here had someone travel a long way for a car and why do people do it?

https://twitter.com/Marshall_BMW/status/1366438080...
I previously worked for a dealer doing deals via a number of brokers, we would either transport the car to the customer at their cost or the majority would make a day/ weekend out of it to come to collect it from our site in the Midlands.

I had people come from all over the UK including the outer Hebrides, northern ireland and Cornwall.

We would basically give the maximum discount on the vehicle including front end and back end bonuses, this meant that we smashed our targets and then we still had the retail sales via the showroom as well.

We found that many rural dealers knew that the next closet dealer may be 50+ miles away so pretty much would budge an inch on price. People would then go and do some research and realise that 10% discount on a 20k+ motor is worth the trip to collect it.

resolve10

994 posts

44 months

Monday 15th March 2021
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Slightly different question to most of the buying-related questions... would you consider starting a career in car sales in your mid-thirties, coming from a different industry that you had been in since teenage years?

I am about to attend a second interview for a sales executive role at a local franchise dealer (a well-respected brand that I would be excited to work with). I think I stand a good chance of getting offered the role, but I am risk-averse by nature and I'm struggling to get my mind around the thought of such a drastic career change. Ironically, I think that's why my first interview went so well, because I went into it with no pressure or expectation on myself.

For context, currently earn about £30k (all salaried). Salary on offer for car sales role will be £18-20k with (I'm told) a realistic £35-40k available. Would welcome any feedback from anyone in the trade on whether this is realistic and any other thoughts on making the leap?


PartsMonkey

315 posts

136 months

Monday 15th March 2021
quotequote all
Blakewater said:
Dealers are posting pics of their 21 plate handovers. There are always people who've travelled a long way to buy cars from specific dealers.

This guy has gone from Scotland to Salisbury to buy a brand new 3 Series from this particular dealer. Possibly a Carwow deal or similar or they just undercut nearer dealers by enough margin to warrant the trip.

Has any salesman here had someone travel a long way for a car and why do people do it?

https://twitter.com/Marshall_BMW/status/1366438080...
The worst/best was a customer who lived in Buckinghamshire went to Scotland (Inverness I think) to buy her Freelander because it was £400 cheaper than buying it for the dealer I worked in that was less than 10 miles from her house. She spent more getting there and back than she saved. I think she did it as a point of principle. Or maybe to spite us.

spikeyhead

17,192 posts

196 months

Monday 15th March 2021
quotequote all
PartsMonkey said:
Blakewater said:
Dealers are posting pics of their 21 plate handovers. There are always people who've travelled a long way to buy cars from specific dealers.

This guy has gone from Scotland to Salisbury to buy a brand new 3 Series from this particular dealer. Possibly a Carwow deal or similar or they just undercut nearer dealers by enough margin to warrant the trip.

Has any salesman here had someone travel a long way for a car and why do people do it?

https://twitter.com/Marshall_BMW/status/1366438080...
The worst/best was a customer who lived in Buckinghamshire went to Scotland (Inverness I think) to buy her Freelander because it was £400 cheaper than buying it for the dealer I worked in that was less than 10 miles from her house. She spent more getting there and back than she saved. I think she did it as a point of principle. Or maybe to spite us.
Proof that humans are emotional beings that can be rational, rather than the other way round.

Buster73

5,033 posts

152 months

Thursday 18th March 2021
quotequote all
PartsMonkey said:
The worst/best was a customer who lived in Buckinghamshire went to Scotland (Inverness I think) to buy her Freelander because it was £400 cheaper than buying it for the dealer I worked in that was less than 10 miles from her house. She spent more getting there and back than she saved. I think she did it as a point of principle. Or maybe to spite us.
Reminds me of a guy I used to work with , told us he was going straight from work to look for some cheap wallpaper, we said surely you buy what you want not just a cheap one.

A few weeks later he let slip that the cheap wallpaper he bought wasn’t enough and when he went back for more there was none left with the same batch number and he ended up stripping the first lot off and replaced it with a similar style.

There’s nowt as queer as folk.

Sheepshanks

32,412 posts

118 months

Thursday 18th March 2021
quotequote all
mcflurry said:
My BiL was looking at a new VW Tiguan. It was a little over his budget, so he asked for £500 off to seal the deal.
The dealer wouldn't, so he walked away and ordered a Volvo XC60 that afternoon.
That evening, the same VW dealership offered a deal on the same spec Tiguan, through carwow with £2000 off..

Assuming everything else is even, why would a dealer take the £2000 less and pay commission to carwow?
When was that? We got £6K off wife's Tiguan, inc £2750 PCP deposit contribution which I took and then withdrew from the PCP.

nickfrog

20,824 posts

216 months

Thursday 18th March 2021
quotequote all
mcflurry said:
My BiL was looking at a new VW Tiguan. It was a little over his budget, so he asked for £500 off to seal the deal.
The dealer wouldn't, so he walked away and ordered a Volvo XC60 that afternoon.
That evening, the same VW dealership offered a deal on the same spec Tiguan, through carwow with £2000 off..

Assuming everything else is even, why would a dealer take the £2000 less and pay commission to carwow?
Because they needed to draw the customer to them against other dealerships whereas your BiL was already there (presumably). It sounds a little short sighted from the dealer although your BiL should have come in with some leverage and they would have probably got £2,000 off...

mcflurry

9,077 posts

252 months

Tuesday 23rd March 2021
quotequote all
nickfrog said:
mcflurry said:
My BiL was looking at a new VW Tiguan. It was a little over his budget, so he asked for £500 off to seal the deal.
The dealer wouldn't, so he walked away and ordered a Volvo XC60 that afternoon.
That evening, the same VW dealership offered a deal on the same spec Tiguan, through carwow with £2000 off..

Assuming everything else is even, why would a dealer take the £2000 less and pay commission to carwow?
Because they needed to draw the customer to them against other dealerships whereas your BiL was already there (presumably). It sounds a little short sighted from the dealer although your BiL should have come in with some leverage and they would have probably got £2,000 off...
Sheepshanks said:
When was that? We got £6K off wife's Tiguan, inc £2750 PCP deposit contribution which I took and then withdrew from the PCP.
He's not the world's best negotiator, and wanted to pay cash (debit card), plus he is allergic to the PCP withdrawal thing..
It's a 17 plate so about 4 years ago..
The VW garage also 'lost' a potential sale when he updated the Volvo last year, as he refused to entertain one in the shortlist..



911pleb

375 posts

60 months

Tuesday 23rd March 2021
quotequote all
I guess this is a margin and haggling question.

There was I car I rather liked for sale privately on AT. For reasons that are unimportant, the car sold before I was in a position to buy it.

Thing is, its now popped up at a dealership (main brand, not indy) with an huge markup on it.

I hear dealers all over the place, including this thread saying that the margins are super tight and they barely have £300 to play with, yet this car was up for 27.5k and the dealer is now advertising it at 35k.

I assume the dealer probably paid less than 27.5k for it, so the margin is likely around 9-10k.

Thats just plain cheeky imo. 1500-2000 maybe I could stomach, but 10k!?

Knowing these figures, im obviously reluctant to pay 35k for it. How should I approach the dealer in this case? Of course I have more 'protection' than I would a private sale, but 10k worth? No way.

Its also the most expensive car on AT at the moment too, so its overpriced imo regardless.

I guess they can always wait for someone who didn't see the original advert to come along and tell me to do one, but I really want it.

Thoughts?

valiant

10,016 posts

159 months

Tuesday 23rd March 2021
quotequote all
Warranty?
Business overheads?
Prep?

Business will charge what it thinks a punter will pay. If this is too high, it will be reduced within time.

Why let a car go for £30k when someone may pay £35k?

robsco

7,817 posts

175 months

Tuesday 23rd March 2021
quotequote all
911pleb said:
I guess this is a margin and haggling question.

There was I car I rather liked for sale privately on AT. For reasons that are unimportant, the car sold before I was in a position to buy it.

Thing is, its now popped up at a dealership (main brand, not indy) with an huge markup on it.

I hear dealers all over the place, including this thread saying that the margins are super tight and they barely have £300 to play with, yet this car was up for 27.5k and the dealer is now advertising it at 35k.

I assume the dealer probably paid less than 27.5k for it, so the margin is likely around 9-10k.

Thats just plain cheeky imo. 1500-2000 maybe I could stomach, but 10k!?

Knowing these figures, im obviously reluctant to pay 35k for it. How should I approach the dealer in this case? Of course I have more 'protection' than I would a private sale, but 10k worth? No way.

Its also the most expensive car on AT at the moment too, so its overpriced imo regardless.

I guess they can always wait for someone who didn't see the original advert to come along and tell me to do one, but I really want it.

Thoughts?
What’s the car?

You pay 20% VAT on the gross margin (before costs not after). Then you pay to prepare the car by way of service, MOT, cosmetics, tyres. Then you pay a warranty company to cover it. You may discount the car a little. Then you pay a salesman a commission. Then you have to pay everybody’s wages and pay for the big building you’re operating from. And all just in time to pay tax on the profits!

911pleb

375 posts

60 months

Tuesday 23rd March 2021
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Its a boxster.

I guess I'm just bitter that I missed it.

Fast Bug

11,579 posts

160 months

Tuesday 23rd March 2021
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A big chunk of that margin can very quickly get eaten up preparing a Boxster for sale

robsco

7,817 posts

175 months

Tuesday 23rd March 2021
quotequote all
Definitely, a service can easily run into £6-700, plus a couple of tyres and some small cosmetic works, you’re already into £1000. A lot of dealers trawl private sales to buy cars for stock these days. You don’t pay an auction house extortionate fees, and if the car isn’t right on arrival, you just turn back and get the train back home.

papa3

1,407 posts

186 months

Tuesday 23rd March 2021
quotequote all
911pleb said:
I guess this is a margin and haggling question.

There was I car I rather liked for sale privately on AT. For reasons that are unimportant, the car sold before I was in a position to buy it.

Thing is, its now popped up at a dealership (main brand, not indy) with an huge markup on it.

I hear dealers all over the place, including this thread saying that the margins are super tight and they barely have £300 to play with, yet this car was up for 27.5k and the dealer is now advertising it at 35k.

I assume the dealer probably paid less than 27.5k for it, so the margin is likely around 9-10k.

Thats just plain cheeky imo. 1500-2000 maybe I could stomach, but 10k!?

Knowing these figures, im obviously reluctant to pay 35k for it. How should I approach the dealer in this case? Of course I have more 'protection' than I would a private sale, but 10k worth? No way.

Its also the most expensive car on AT at the moment too, so its overpriced imo regardless.

I guess they can always wait for someone who didn't see the original advert to come along and tell me to do one, but I really want it.

Thoughts?
The likelihood is the dealer paid close to asking, knowing what price the car could realise. Lets call it £27,000. Asking price £35,000 gives a gross margin of. £8,000

The VAT man likes his cut and operates a margin scheme for car dealers. Margin now £6,666.

Main dealer will have a warranty to supply. On something from Porsche this will cost £700-1000. For the sake of lazy maths margin left £6,000.

Workshop prep. Even the cleanest car in a main dealer workshop will cost £300-500 for pre sales. Add in a service and 2 tyres on a Porsche, that becomes £1000. Margin left £5,000. Hope it doesn't need discs and pads.

Discount/over allowance. Even when playing hard nosed, most deals will end up with a discount or gesture to close a deal. Margin remaining £4,500.

Sales Exec commission. I'm not familiar with Porsche but call it £250, this is a bit of a guess. Margin left £4,250

Valet cost. Again, not based on Porsche experience. £150 to allow for a valet plus re clean. Margin left £4,100.

Stocking charges. Many dealers use stocking lines (like a big overdraft) to fund the stock and improve cashflow. Assuming a fast turn £250 list and remove with a bit if interest. £3,850 Margin left.

Advertising cost. Generally budgeted at £100-150 per car (volume site, not Porsche) £3,700 left.

Those are the broad stroke direct costs. Then there is the overhead.

Sales exec, Sales Admin, Reception, Sales Manager, Dealer Principal and Accountant all need paid.

Rent/Mortgage, rates, heat and light, systems, subscriptions, training, insurance, fuel, good will, legal fees.

What about liability? You say you don't see £10k of value in the protection of buying from a dealer? What if it's a dud? In a Private sale you are fked. Literally zero protection. From a dealer you have the deck stacked in your favour. 12 months warranty is largely standard for approved used car schemes and that's before you consider the statutory rights granted by CCA, CCR et al. That protection could be worth your entire spend.

You also have a building full of highly (expensively) trained techs, on demand parts supply and all the tools and diagnostic equipment needed to maintain your chosen vehicle.

That building by the way cost A LOT to build and the guy who paid for it would like a few £££ back.

And finally, the vast majority of cars sold DO NOT have an £8,000 mark up.

Ultimately what the dealer paid doesn't come into the equation. He paid for an asset and you get to decide if it warrants, to you, the price he is asking.

For a comparison a franchised dealer at the top of his game will make 2% net. Most make 1% and plenty don't even do that. Have a think about the margin Tesco lift from you on a loaf of bread, then complain about the dealer.