dealer margins

tissot

Active Member
Jan 3, 2007
152
1
york
looking to buy another new fr tdi and wondered if anyone knew roughly what the dealer margins are

got a great deal 2.5 yrs ago but times change

thanks in advance
 

CupraR1

The Future's Orange
Dec 27, 2005
169
0
Preston
Preston dealer could not match the price of the Harrogate dealer so ordered from Harrogate and had a great drive back with my new car
 

Al

Active Member
Aug 29, 2005
7,331
9
Irfan should have a good idea as he used to sell them. In my experience, margins vary depending where in the UK you live. The local stealer here seems to think they can get away with 10-20% premiums over anywhere else in the country though which is why I went to London to buy my car.
 
Depends entirely on what campaign is running at any given time and on what models.

There is a lot of rubbish spouted by people about margins but essentially you have to be happy with what you're paying and with the service you're receiving. There have been dealers (and continue to be) dealers who desperately undercut the market and chase registrations with unsustainable discounting, good for the customer in the short term but essentially bad in terms of maintaining a dealership network for warranty work, servicing etc and also harmful to future residuals. We all know what happens to the dealers who go the route of silly discounts, ask Irfan!

On the other hand there are some fantastic discounts available on FR Tdi's at the moment as SEAT UK have put some big support behind them, that's a different scenario to dealers trying to cut each others throats as the deal is open to every dealer.


On the other hand,
 

CupraR1

The Future's Orange
Dec 27, 2005
169
0
Preston
RIP dealers. The sooner this country outlaw’s price fixing across all retailing the better it will be for everyone. I get the bit about warrant work etc, but you have paid for most of it with the £70 - £100 for an hours labour the dealers charge, do they pay the mechanic £100 per hour? I think not lol.
 
RIP dealers. The sooner this country outlaw’s price fixing across all retailing the better it will be for everyone. I get the bit about warrant work etc, but you have paid for most of it with the £70 - £100 for an hours labour the dealers charge, do they pay the mechanic £100 per hour? I think not lol.

Of course they do and I suppose Tesco pay the checkout girl 50p for every 50p tin of beans she sells! Ever run a business?

Firstly, price fixing was outlawed years ago under Bloc Exemption legislation, prior to this several dealers had been prosecuted for forming "price cartels". VAG were fined One Billion (yes Billion) Euros for breach of Bloc Exemption rules about 9 or 10 years ago.

I have to say that the naivety and misconceptions of the general public concerning the motor trade are astounding.

A one man band plumber will charge you £50 to £75 for a call out and the first 15-30 minutes of his time, his overheads? A 5 year old Vauxhall Combi van and a phone line! A main dealer will charge £65 upwards (we charge £65) per hour, for every technician employed there will be on average at least one and a half people employed behind the scenes in admin, service reception, a car cleaner etc therefore out of a every hour at £65 you have 2 and a half peoples wages plus the overheads of running a dealership (mortgage, rates, utilities, insurance, stocking and bank charges, etc etc) that has to comply with an extensive manufacturers "compliance standard".

A company called ASE (also known as Trevor Jones Accountancy) are the world's leading automotive industry accountants, they analyse the efficiency and profitability of every main dealership in the UK ranging from Proton to Rolls Royce, their latest figure show that the average main dealer in the UK is making 0.6% net profit against turnover, that equates to £6,000 for every million pounds.

It is the lowest figure of any major industry in the country.
 

jezyg

Active Member
Feb 21, 2003
2,323
21
Derby
There is a much bigger issue within the car industry and that is inconsistency. You only have to look at the Vauxhall and Ford price lists and see the discounts that are offered to see were peoples expectations come from. The motor industry is poor at managing people's expectations, with an almost dog eat dog approach with expectations from the manufacturer to the dealer.

No one would dream of going into a supermarket and asking for discount on a tin of beans? However a customer may be rewarded for loyalty via cash back or points for buying said tin of beans.

The car industry needs to either fix realistic prices and offer no discount, which would have the knock on effect of improving residuals. Or keep with the silly discount and customers like me will go for the silly deal to save ££££ and then go back to the dealer who offers the best after sale service. I have no issue travelling hundred of miles for the best deal if the saving's outweigh the travelling cost's.

Car manufactures are doing what we all know food manufactures have been doing for years, in making a product smaller without telling anyone a bit like the slow downgrading of car specification's for the same price or in some cases increasing discounts....madness.
 

Al

Active Member
Aug 29, 2005
7,331
9
Of course they do and I suppose Tesco pay the checkout girl 50p for every 50p tin of beans she sells! Ever run a business?

Firstly, price fixing was outlawed years ago under Bloc Exemption legislation, prior to this several dealers had been prosecuted for forming "price cartels". VAG were fined One Billion (yes Billion) Euros for breach of Bloc Exemption rules about 9 or 10 years ago.

I have to say that the naivety and misconceptions of the general public concerning the motor trade are astounding.

A one man band plumber will charge you £50 to £75 for a call out and the first 15-30 minutes of his time, his overheads? A 5 year old Vauxhall Combi van and a phone line! A main dealer will charge £65 upwards (we charge £65) per hour, for every technician employed there will be on average at least one and a half people employed behind the scenes in admin, service reception, a car cleaner etc therefore out of a every hour at £65 you have 2 and a half peoples wages plus the overheads of running a dealership (mortgage, rates, utilities, insurance, stocking and bank charges, etc etc) that has to comply with an extensive manufacturers "compliance standard".

A company called ASE (also known as Trevor Jones Accountancy) are the world's leading automotive industry accountants, they analyse the efficiency and profitability of every main dealership in the UK ranging from Proton to Rolls Royce, their latest figure show that the average main dealer in the UK is making 0.6% net profit against turnover, that equates to £6,000 for every million pounds.

It is the lowest figure of any major industry in the country.

Interesting.

Without starting a debate about it, Plumbers and other "specialists" like Slaters can get away with charging what they like because they are providing a service people are willing (read have to) pay for.

For example when a tap bursts its seals and is flooding a house and the one underneath it, or if slates blow off a roof in a storm and the bedroom of the 5 month old kit is getting wet, the immediate call out fee becomes worth it. I don't remember the last time I decided to get my car serviced and they were able to accept it on the day I called. I also don't remember calling a plumber and being able to see him in the same month never mind the same week.

There are so many garages able to service a car with OEM parts (main dealers and independent) and provide a receipt to cover the essentials required by a warranty that people can easily book their car in and have the oil and filters changed in the same week, or have repairs etc done.

Working through a main dealer may look good in the log book, but realistically, how much more is a car worth with a FMDSH than a FSH after 3 years when the warranty is out? Very little if anything at all. With that being said, are the costs required to have a flash showroom and all the necessary overheads really worth it? If a main dealer disappears because they went bust, then I will buy a car from another manufacturer if I need to and so will other people.

The car industry is a dog eat dog business and it is ludicrous to compare it to the likes of a Plumber. There is so much choice out there for consumers, and they are pushed harder in some cases than dealers making what ever % - and really do consumers care about a car dealerships margins? I know I don't, and I am happy to travel to wherever there is a deal to be had and take advantage of and there are more and more people like me every day. The people who don't know about cars are the ones providing the bread and butter for main dealers as they are happy to turn up, pay up and shut up because they don't know any different.

As above, car manufacturers would be better off running dealerships themselves if what you have said is a true representation of things - there is no way in hell any business in the industry I am in would get away with 0.6% regardless of anything - they would pull out and go in to something that is actually worthwhile.
 

CupraR1

The Future's Orange
Dec 27, 2005
169
0
Preston
Gary you are so out of touch with reality and your knowledge of retailing is wide of the mark. If you have worked in car sales through your career this would explain why. Jezyg is spot on and I am sure a lot of other people would agree. I will give you a few examples. I go to buy a new car; the garage will make around 20% on the new sale around 20% on my trade in (then make me feel better by giving me an extra grand to make the deal). The garage will then have me by the short and curlies, they will charge you a “Fixed” price for servicing and use an adequate oil filter etc. I am sure if you went to a local garage that you trusted and specified the oil filter etc. it would be a lot cheaper but you wouldn’t have your warranty. As for the 0.6% profit I know a car salesman and he brought home 6k for March of this year so maybe the new car sales needs a real shake up. Most people on here call them the “Stealers” maybe someone should start a poll and find out what customers really want and do not get from dealers.
 

CupraR1

The Future's Orange
Dec 27, 2005
169
0
Preston
[ Ever run a business?

Sorry yes where I work takes 1.7 million per week and I am responsible for 170k pre week and I know the products I sell cannot be bought in Europe for less money, this is because my company goes out of its way to smash price fixing. Gary I hope you understand this isn’t against you as I know you are well respected on here but the dealers need to move with the times and get a grip on reality. Top and bottom is I can buy the same car in another country for less dosh = price fixing.

Steve
 
Jun 7, 2006
2,983
0
Norfolk, Norwich
TheStigg4fc08a55d510b.jpg
 
Gary you are so out of touch with reality and your knowledge of retailing is wide of the mark. If you have worked in car sales through your career this would explain why. Jezyg is spot on and I am sure a lot of other people would agree. I will give you a few examples. I go to buy a new car; the garage will make around 20% on the new sale around 20% on my trade in (then make me feel better by giving me an extra grand to make the deal). The garage will then have me by the short and curlies, they will charge you a “Fixed” price for servicing and use an adequate oil filter etc. I am sure if you went to a local garage that you trusted and specified the oil filter etc. it would be a lot cheaper but you wouldn’t have your warranty. As for the 0.6% profit I know a car salesman and he brought home 6k for March of this year so maybe the new car sales needs a real shake up. Most people on here call them the “Stealers” maybe someone should start a poll and find out what customers really want and do not get from dealers.

No I don't take your view personally, in fact I find it quite amusing. I have a mere 35 years in various types of retailing varying from footwear to timeshare but more years in the motor trade than I care to remember. This business is like no other retail environment in the world and that's why I commented on the naivety of outsiders particularly those in other forms of retail who really think they know best and base their assumptions on parameters that are more in keeping with Neverland than they are in the motor trade. As we're a family (I'm the son-in-law of the owner) owned business I get to see exactly what goes on in the business and the motor trade as a whole.

But hey, if you think I'm wide of the mark based on your extensive (?) experience of the motor industry try the link below, you can of course say that ASE Trevor Jones Accounting are also so out of touch with reality and that their knowledge couldn't possibly compete with your own, I mean, they only operate in 34 countries in 29 different languages specialising solely in the motor industry, perhaps they're even lying!!!!!!!!!!!!:lol:

http://www.ase-global.com/downloads/ASE-Driving-force-24.pdf
 

Jarre

Active Member
Dec 9, 2011
5,365
11
Stockton-On-Tees
Wow this is getting a bit mad isnt it.

Bottom line is a dealer operates to make profit. If they dont make a profit, they close, simple.

If you arent happy with what one dealer offers, go somewhere else and play them off, then youre sure to get the best deal. But yes, they can take the wee wee on their prices.

My dad got offered £20k for his 2011 330d couple recently. A BAD condition one books at £24k trade on. How can they justify this? They had no answer, they tried to take the mick, now he refuses to deal with them.

He also traded in his 2002 boxster, got £6k for it, we spotted it at a local dealer for £10k. Now that is overpriced, but thats a decent profit for someone...

At the end of the day, they make profit, thats what any business is out there for, so you do need to let them have some money :p just get them down as far as they go, until they refuse any more extras. Then walk away say you'll think about it and the chances are they'll ring you back and give you something else, thats if they want the deal. If they dont contact you back, they dont want a deal, and therefore don't deserve one...

They need to realise that in these times, any deal is a deal, and youd think they would do the best they could to sell a car! NO. My local seat dealer didnt. I went in, a 17 year old, and enquired about a car i'd seen in barnsley, he said he could get it up, and he'd ring me back the day after. No reply after a week... I went to barnsley myself and bought the car there instead.
I then rang up the dealer and asked again, he said it had gone, i told him i knew, because i'd bought it. Silence. He didnt know what to say!
Just because i'm 17 and buying a 2010 1.2tsi i dont expect to be treated like **** and they dont deserve my business.

Rant over haha!
 
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Nath.

The Gentlemans Express
Jan 1, 2006
8,620
16
EASTLEIGH, HAMPSHIRE
No I don't take your view personally, in fact I find it quite amusing. I have a mere 35 years in various types of retailing varying from footwear to timeshare but more years in the motor trade than I care to remember. This business is like no other retail environment in the world and that's why I commented on the naivety of outsiders particularly those in other forms of retail who really think they know best and base their assumptions on parameters that are more in keeping with Neverland than they are in the motor trade. As we're a family (I'm the son-in-law of the owner) owned business I get to see exactly what goes on in the business and the motor trade as a whole.

But hey, if you think I'm wide of the mark based on your extensive (?) experience of the motor industry try the link below, you can of course say that ASE Trevor Jones Accounting are also so out of touch with reality and that their knowledge couldn't possibly compete with your own, I mean, they only operate in 34 countries in 29 different languages specialising solely in the motor industry, perhaps they're even lying!!!!!!!!!!!!:lol:

http://www.ase-global.com/downloads/ASE-Driving-force-24.pdf

Stealers make plenty of money. The make it on the car sales, they make it on the servicing and they make it on the parts.

They only end up out of pocket if someone cocks up.

If they didn't have profit left after their overheads they wouldn't continue trading. How long has your family motor trade business been going and making money?
 

Subc

Active Member
May 12, 2008
426
5
Scotland
Its amazing the difference, Best price finder in my opinion is to: Google the model your after, either advertised On Line at that or someone spreading the happiness of their "Steal" in either this fine forum or another. Works for me eg FR+ 170 £17995, 1.6 Diesel SE Copa £14895 OTR Cheap as chips LOL..
 
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LeonCR

Active Member
Oct 22, 2009
2,389
2
Right this is getting silly, its not as bad as Gary makes out and at the same time its not anywhere near as good as some people are making out

There can be a big discrepancy in new car prices for a multitude of reasons, from offers to how old the car is

A dealer will sometimes do a massive discount too get out of a car they have had for a while ( Happened in my case )

I can categorically say there is never a 20% margin on new cars, I would say if your getting the discounts that i used to be able to offer than you are getting a good deal.

To the people who have PM'd me sorry but after having a think about this I am not going to let on any information further than this message

This is all my opinion
 

robdf2

Yellow is the best
Feb 21, 2006
3,605
2
location , location
I cant comment on car margins but the servicing side of things is way overpriced.

The main dealer i use to get my car serviced is £125 + vat an hour !
Through fixed servicing and warranty work they probably dont make much of a margin , but what happens when your warrenty expires?

Trust me this dealer is minted , makes an absolute arm and a leg out of people.
I was in there collecting my car , and an oldish guy came in to pick up his 2004 leon from an mot and got handed a bill for nearly £600 , the guy on the service desk said because you have a full history with us we have taken a 10% discount from your bill

if that was my car i would have cried.

I wouldnt have used them in the first place tbh.

Car sales and servicing in this country hasnt got a good name because of the years joe public was ripped off.

In some cases you do get people who care about selling a car Irfan for one but most salesman are only interested in your cash the same with service departments , leave your car with us sir we will have a look , couldnt find anything wrong but that will be £60 for plugging my lap top in blah !

buying a car and having it serviced is about striking up a relationship between the customer and the dealership , but in all honesty i have never come across that yet.
 
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