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ISTR that Ford did something like this, many years ago. The supply invoice was in a folder on the windscreen and the price paid was £100 above that invoice price
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Cost price? Being a cynic it is just the usual sticker price minus a bit more than normal. Actual cost price would be under £5k for the bits...
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I don't think I'd like to buy a Renault, even for a quid.
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>>I don't think I'd like to buy a Renault, even for a quid<<
They can't all be wrong uns though bt, just a minority, the majority are perfectly good jamjars.
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Absolutely. This practice should be banned as the dealer invoice price is totally meaningless.
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I don't mind how motor manufacturers put across their offers, if there's a worthwhile saving to be had, I'm interested.
Though, not in a Renault, I'm afraid.
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Anyone know what the actual savings are, versus list price?
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Perhaps we should have a dedicated thread to share information we have regarding new car offers. It could be a useful tool.
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All new car offers are in this month's 'What Car' magazine as a special feature.Worth a look if your thinking of buying at the moment.
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Not yet, Videodoctor. I'll probably start looking early next year. But thanks, anyway.
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Good idea Clk any help for a new car buyer is welcome.
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>> Anyone know what the actual savings are, versus list price?
Just had a look on drivethedeal and you can get 19% off list on a Megane through them. So for 'cost price' I guess you'd be looking for a saving of at least 20%?
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...Anyone know what the actual savings are, versus list price?...
The dealer margin is generally 17.5 per cent.
Bear in mind that is deducted from the basic price of the car, car tax (now abolished I think) and VAT is added afterwards.
HMRC watch the discount closely, because the more it is, the less VAT they get.
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>> ...Anyone know what the actual savings are, versus list price?...
>>
>> The dealer margin is generally 17.5 per cent.
So you might be better going to a broker anyway. The dtd margins must be quite small then.
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...The dtd margins must be quite small then...
They certainly will be.
Having said that, 17.5 is the starting point, there's the opportunity to earn target-dependent bonus, depending on the whim of the manufacturer/importer.
'Register 20 Focuses this month and we will give you an extra £200 on each one', that sort of thing.
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"These cars are priced keenly to clear space for the new 13-registrations due over the next few weeks.
I'm not sure I'd want a car with unlucky 13 on the number plate.
;-)
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>> I'm not sure I'd want a car with unlucky 13 on the number plate.
>> ;-)
>>
I read somewhere recently that DVLA were going to allow an alternative registration number, I think it is 63 but I am not sure, and it may have been journalistic speculation.
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"13 Reg" are 6 months away
It's "62 Reg" in 20 days time
Mike R made the same mistake in his article in the Telegraph
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I was bjorn on the 13th, and I'm still ere.
:}
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>> ......... and I'm still ere.
I'm saying nothing!
;-)
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>> I was bjorn on the 13th, and I'm still ere.
>>
>> :}
>>
Same 'ere, and my birthday was on a Friday this year :-)
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>>and my birthday was on a Friday this year :-)<<
We even lived in a number 13 about 4 properties ago (called Kittiwake) but I don't suffer from Triskaidekaphobia.
(or Hexakosioihexekontahexaphobia)
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>> I was bjorn on the 13th, and I'm still ere.
>>
>> :}
What, all of you?
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>>What, all of you?<<
Minus a few billion brain cells I left behind in the 60's, 3 teeth, and some 10's of 1000's of hairs!
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>> I'm not sure I'd want a car with unlucky 13 on the number plate.
>> ;-)
>>
That and a Renault badge would be just asking for trouble. ;-)
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Like everything else its just a sales technique. I don't really know why it offends some people, but equally I have no idea why it influences others.
It always surprises me that someone who will not pay £20,000 for a car, will pay £21,000 if they're told its list price was £30,000.
Nonetheless, it works.
As for getting annoyed, surely you assess whether or not that car is worth £20k to you? Does it matter how they calculate it?
And of course they are still making a profit at the end of the day. THEY ARE IN A BUSINESS. Some of it will be in discounts or bonuses, some of it will be in upselling and future sales, some of it will be in sales and service, and some of it will be in the avoidance of costs such as financing.
Would you be happier paying that price if you knew they were losing money? Because you'd be a fool.
I worked at a company some years ago, a major corporate, that would not deal with a supplier unless he could prove he was making an approriate profit. That way you have a sustainable level of service and quality.
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You make a good point £20k to some people is a fortune to others peanuts.One of my neighbours spend lost of money on holidays every year.The washing machine is twenty years and falling to bits but they keep spending on repairs.Instead of buying a new one.People are strange creatures.
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I bought a Citroen Picasso back in 2003 for less than cost. The sales manager was a nice bloke and the deal was over the phone.
I mentioned to him that the local dealers could not get near his price, and one accused me of lying as it was less than their cost price. He told me they were selling at a loss as it was near the end of the month or quarter (cant remember which) and they were close to getting a big fat volume bonus from Citroen. Said it was a substantial 5 figure sum so it was better to shift a few at a loss and get the kickback
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>>I bought a Citroen Picasso back in 2003 for less than cost
Depends what you mean as "cost". I suspect you mean the original invoice price the dealer agreed to. However that is not the whole story.
A car can be regarded as a profit & loss centre.
The balance sheet of that car consists of the following; (not complete)
Invoice from manufacturer
Finance costs
Cleaning and maintenance
Storage
Depreciation and/or detioration
Sales preparation (including repairs & servicing on used vehicles)
The revenue for that car will be;
Sale price
Future servicing, warranty, maintenance revenue
Volume or retrospective discounts
Add-ons of future recurrence
The garage has bought that car. The purchase price is set. That is now fixed and is the price which most punters believe is the cost price of that vehicle. However, all the other items represent part of the cost of that vehicle and are time-based. So, for example, if storage is £100 per week, then the dealer is better to seel it for £90 less this week rather than keep it for a further week.
From a revenue point of view, if that car will come back for servicing, then that profit margin will be part of the P&L for that car.
Two types of dealers, those that make a profit and those that go out of business. Firstly, you need to make sure your dealer is making profit if you have any intention of continuing the business relationship.
Secondly, just because you cant see where he's making it, doesn't mean he isn't.
And lastly, its all irrelevant. Work out the actual total cost of ownership of that vehicle to you, including direct cost, indirect cost and opportunity cost, and whether or not that represents value to you. You can't, or shouldn't, make a buying decision based upon whether or not the dealer is giving you a discount.
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The dealer was likely standing to make far more in volume bonus and could easily absorb a loss on a single car to boost this.
When I bought my Forester XT in 2008 several factors were at play:
The car was the last of that model run
It was in tax-band L (then £400/yr)
The world's finances had collapsed and car sales were flatlining
The Yen was getting stronger
I paid just over £14k for a "£23k list" car - presumably because the importer couldn't get rid of them.
2 and a half years and 20thou miles later I was given £12k trade-in against a Shogun that was £29k (£38k list) from an internet broker.
A year and half later I was given £26k trade-in for the Shogun.
Imagine if I had paid near list for these cars - I'd have lost well over 20 grand in depreciation over 4 years vs. just over 5 grand.
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>> Imagine if I had paid near list for these cars - I'd have lost well over 20 grand in depreciation over 4 years vs. just over 5 grand.
I can only dream of hefty depreciation. God what a bunch of tycoons you guys are.
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Last time I was going to buy an expensive car I had depreciation thoughts. It occurred to me that over the last 7 or 8 years I had spent an average of £1,200 per month in depreciation, never mind the cost of running the things.
So, over the last 3 years or so I've had many cars, all costing around £1,000 each to buy. Every time anything significant happens, I get rid of them. And I've had some really lovely luxury cars, all fairly daft financially (old, originally expensive, luxury cars, prone to expensive failures and repairs) but safe because I'm only spending £1,000 and you can get £200 scrap for them. And in fact I've had no significant failures. Although one car did have aircon, ECU, lights and central locking all fail in a week, but I still got £700 for it.
I've found it fun and liberating. I doubt I'll ever go back to spending significant dosh on a car again.
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>>
>> I've found it fun and liberating. I doubt I'll ever go back to spending significant
>> dosh on a car again.
>>
If you look on Autotrader for >10 year old cars with under 80k miles, there are some serious big cars going dirt cheap. Lots of people selling due to financial pressures.
Buying a new car is a luxury I have only done once, and never will again. Depreciation was £500pa for 17 years..
Not clever.
I fancy a 75k miles Lexus GS300 fsh the lot...
www.autotrader.co.uk/search/used/cars/lexus/gs/postcode/st87dr/radius/1500/price-to/2000/maximum-mileage/up_to_80000_miles/sort/default/price-from/1000/onesearchad/used%2Cnearlynew%2Cnew
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I recommend cars around 10 - 12 years and 100k - 120k miles. Its the bracket that works for me.
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Buy a new car at cost price - Meldrew
