Dealer Mark-ups
Discussion
I've always been interested to know on how much mark up dealers put on their cars. I have had some experience of this first hand when I sold my 996 C4 back to the OPC and had lost £10K in around 6 months. They put my car up for sale at around £6K more than I had gotten for it. (I had bought it for £54K, sold it for £44K and they put it in their show room for £50K - that was the then AFN). Anyway, they gave me the standard rubbish of preparing the car, but the reality was it required nothing, since I'd only driven it 1000 miles. Anyway, the point of the post is that I've come across a markup which is truely eye-watering...
I'm on the market for a 993TT. I've seen a few, but happened across one just before December 35K miles, mostly OPC work (it had a some work done on it by a specialist), midnight blue etc. Because of my work schedule before Xmas, I couldn't get to see it, and when I spoke to the private seller he'd told me that someone was coming to see it, and had offered him money etc. I told the gentleman that if he didn't sell it, then ring me and I'd come up and buy it with cash after giving it the once over. I didn't hear from him, and assumed the sale had gone through.
Then, last week, I got speaking to a dealer in North London. He had just got a 993 TT, with 35K miles, and it had had work done at Lancasters in Cambridge. It sounded just like the other car. I asked him where he'd got it from, and he told me it had been privately sold to him. I then suggested this was the same car I had enquired about though the autotrader. Quickly the salesman said he had gotten his facts wrong and he'd purchased it through the Audi dealer network.
I called the seller of the 993TT, and yes he had sold it a few days before to this london based dealer. But the truely eye-watering fact is, it was for sale in the Auto-trader at £44,995, sold for £44K, and it's up for sale at (nothing was required on the car, since it had been serviced under the private owner) wait for it...
£57,995
And I though OPCs had a good margin...I'm in the wrong business
>> Edited by aerostar on Sunday 15th January 16:15
I'm on the market for a 993TT. I've seen a few, but happened across one just before December 35K miles, mostly OPC work (it had a some work done on it by a specialist), midnight blue etc. Because of my work schedule before Xmas, I couldn't get to see it, and when I spoke to the private seller he'd told me that someone was coming to see it, and had offered him money etc. I told the gentleman that if he didn't sell it, then ring me and I'd come up and buy it with cash after giving it the once over. I didn't hear from him, and assumed the sale had gone through.
Then, last week, I got speaking to a dealer in North London. He had just got a 993 TT, with 35K miles, and it had had work done at Lancasters in Cambridge. It sounded just like the other car. I asked him where he'd got it from, and he told me it had been privately sold to him. I then suggested this was the same car I had enquired about though the autotrader. Quickly the salesman said he had gotten his facts wrong and he'd purchased it through the Audi dealer network.
I called the seller of the 993TT, and yes he had sold it a few days before to this london based dealer. But the truely eye-watering fact is, it was for sale in the Auto-trader at £44,995, sold for £44K, and it's up for sale at (nothing was required on the car, since it had been serviced under the private owner) wait for it...
£57,995
And I though OPCs had a good margin...I'm in the wrong business
>> Edited by aerostar on Sunday 15th January 16:15
I dont get your point. Do you think that the dealer (if he is able to sell a car for say 10K profit)should not sell it for that and stick to a mximum fixed profit of say 3-4K! Or should he voluntarily offer more than the asking price to the seller?
I dont know if you are simply curious or envious or jealous. The last two are sins - remember!
It is a small matter of supply and demand I think.
>> Edited by targa on Sunday 15th January 21:03
I dont know if you are simply curious or envious or jealous. The last two are sins - remember!
It is a small matter of supply and demand I think.
>> Edited by targa on Sunday 15th January 21:03
If its too expensive DO NOT BUY IT...........go find another car.........if the dealer makes the profit fine, he spotted an oppertunity and took it, backed with his cash, thing is its very unlikely he will retain anything like that margin, puzzling the other guy who owned it stuggled to get the lower figure though, thought TTs were like gold dust!
The main reason the dealers can get away with such big margins is very simple...the majority of porsche buyers(especially of newer models have) no cash,therefore a nice slug of porsche finance helps ease the purchase irrespective of price.i have bought numerous late 911's and never paid a cheque to the owner..always to the finance company...£500 per month for 10 years looks cheap to drive a 911 for a lot of people!!
>> Edited by kayc on Monday 16th January 08:49
>> Edited by kayc on Monday 16th January 08:49
ha ha, I read this and thought that could only be one dealer, took a quick look on their website and sure enough - these guys are a laugh a minute. Assume their quoted figure is a starting point negotiable south by 5-10k
too many funny stories to share but can't w/o flouting PH rules
>> Edited by Adam B on Monday 16th January 23:59
too many funny stories to share but can't w/o flouting PH rules
>> Edited by Adam B on Monday 16th January 23:59
Did you sell the car or let a dealer borrow it ?
Firstly can I say not currently part of our own stock at 911virgin towers.
I think in this instance the issue isn`t really with what the dealer gave you for the car assuming they paid £44k, rather with how much they are asking for it, if they think they can get £14k or so more than we`ve just sold a lovely 993 TT for then fair play to them.
Margins are always an emotive subject. From our side of the fence we never know exactly how much a car is worth until it sells. There are some cars we buy with trepidation and they sell the next day, others that we know will sell instantly and they are still there 6 months or more down the line.
Used cars are not like, say financial products which can`t go wrong, or new items that can be returned to the manufacturer should a fault arise, we`re on our own and have to factor in money to repair / maintain and cover them once sold.
The other thing to remember is that as dealers we are competing on slightly unequal terms with other cars offered for sale by either the private man or "part time" (non vat registered) dealers. We have to graciously hand over 17.5% of gross profit made on the sale of a car before we think about anything else, wages, adverts, building costs, taxes etc.
Luckily old Porsches are complicated enough to ensure what the part time dealer gains in Vat / tax savings they usually lose when the thing turns out to be a bit of a pup !!
Food donations are always welcome should you feel the need to support your local independant specialist.
Henry
Firstly can I say not currently part of our own stock at 911virgin towers.
I think in this instance the issue isn`t really with what the dealer gave you for the car assuming they paid £44k, rather with how much they are asking for it, if they think they can get £14k or so more than we`ve just sold a lovely 993 TT for then fair play to them.
Margins are always an emotive subject. From our side of the fence we never know exactly how much a car is worth until it sells. There are some cars we buy with trepidation and they sell the next day, others that we know will sell instantly and they are still there 6 months or more down the line.
Used cars are not like, say financial products which can`t go wrong, or new items that can be returned to the manufacturer should a fault arise, we`re on our own and have to factor in money to repair / maintain and cover them once sold.
The other thing to remember is that as dealers we are competing on slightly unequal terms with other cars offered for sale by either the private man or "part time" (non vat registered) dealers. We have to graciously hand over 17.5% of gross profit made on the sale of a car before we think about anything else, wages, adverts, building costs, taxes etc.
Luckily old Porsches are complicated enough to ensure what the part time dealer gains in Vat / tax savings they usually lose when the thing turns out to be a bit of a pup !!
Food donations are always welcome should you feel the need to support your local independant specialist.
Henry
It's primarily the OPC's that take the biscuit on this issue......
Factor in the 111 point check... Put right everything that's wrong.....Replace any tyres under 3mm.....Put a new warranty on the car - even if one already exists....Paint the front of the car....
And that's before they factor in the cost of the new Multi Million pound show rooms - 'salesmens' salaries - massive stock holdings etc etc......
Unfortunately they're turning the brand into a commodity - but have the monopoloy, especially on the higher end cars.
I've tried to sell a couple of 60k+ Porsches privately, but have always ended up hitting the 'dealer' bid - which incidentally is always the same, as the OPC's are too lilly livered to underwrite the price of a car for themselves.....
>> Edited by mbutchers on Tuesday 17th January 13:48
Factor in the 111 point check... Put right everything that's wrong.....Replace any tyres under 3mm.....Put a new warranty on the car - even if one already exists....Paint the front of the car....
And that's before they factor in the cost of the new Multi Million pound show rooms - 'salesmens' salaries - massive stock holdings etc etc......
Unfortunately they're turning the brand into a commodity - but have the monopoloy, especially on the higher end cars.
I've tried to sell a couple of 60k+ Porsches privately, but have always ended up hitting the 'dealer' bid - which incidentally is always the same, as the OPC's are too lilly livered to underwrite the price of a car for themselves.....
>> Edited by mbutchers on Tuesday 17th January 13:48
I agree with mbutchers,the main dealers are having a laugh..i tried to sell a mint 2700 mile 04 gt3 to my main dealer 8 months old and got a 61k bid....at the same time they had a 9000 mile 03 car for sale at 69k and had the nerve to stand in front of me telling me why.Profit is why,what do you think they paid for the 03 gt3? my guess 56k...When i bought it,it was the best car ever made by porsche(not my opinion)and when i wanted to sell it...".the 997 is knocking prices sir".How much does that showroom cost?Someone has to pay for it...!
There is another far more likely scenario. The `03 car was being borrowed from it`s owner by the dealers who were trying to sell it on his behalf. It was the car`s owner who dictated the asking price. They bid to buy your car based on what they though it worth for a cheque.
You would be amazed how often the main dealers sell cars on customer`s behalf rather than stick their hands in their pockets and actually buy them on spec.
We constantly come up against "I`ve been bid X by the main dealers", which when pushed becomes "The main dealers said they would take the car, ask Y and providing it makes the money return me X".
To some extent you lot make a rod for your own backs, when you buy off the MD you want a perfect car with every blemish sorted. If you have it a couple of months and put a couple of small chips on the front of the car don`t be surprised to be kicked for their rectification if you want to sell it.
Besides, when you buy off the MD you`re also getting a good dollop of hand holding should anything go wrong in the first few months, (like the wheels falling off for instance
)
Henry
You would be amazed how often the main dealers sell cars on customer`s behalf rather than stick their hands in their pockets and actually buy them on spec.
We constantly come up against "I`ve been bid X by the main dealers", which when pushed becomes "The main dealers said they would take the car, ask Y and providing it makes the money return me X".
To some extent you lot make a rod for your own backs, when you buy off the MD you want a perfect car with every blemish sorted. If you have it a couple of months and put a couple of small chips on the front of the car don`t be surprised to be kicked for their rectification if you want to sell it.
Besides, when you buy off the MD you`re also getting a good dollop of hand holding should anything go wrong in the first few months, (like the wheels falling off for instance
) Henry
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