What is a realistic offer for an Fcar at a dealer?

It's difficult to say, like all of us, dealers buy some cars well and over pay for others (never mine so far though...).

My father in law bought a Bentley Arnage through Jack Barclay for £72k and it was retailed 6 months later at £68k after haggling, at the time he was gutted about the £72k offer (he did pay £99k 18 months earlier) - dealers don't always make huge profits, it depends on the car and the market.

I'd say most of them work to make between 10% and 15% per car as a rule but again, you need to know if it's on SOR (Sale or Return) or whether they've bought it with their own cash.

I'd aim to get £5k of those cars though.

 

Sorry, should have checked the above mail! My father in law sold his Arnage for £72k and JB took a £4k loss when they eventually retailed the car 6 months later. Sorry for typo.

James

 

It all depends on how motivated the dealer is and how much it's got in the car your looking at, you can always up your offer but it's really hard to drop it!

 

Hi,

From Exp(plus source who works at one) this is what I know..
£57K list price car...is brought for £47K max..huge margins.

how is it broken down.
1) 1K servicing costs/camblets/brakes
2) 1K tyres costs/Alloy refurbs
3) 1K misc costs i.e stone chips/valeting etc/road tax
4) 2K warranty.
5) 5K profit of which % is comision for salesperson/storage etc..

if the car required all of the above(1-4) then haggling price is hard, as they are relucant to reduce price which involves eating into their profit, but they will if they have to.

If the car comes in, requiring very little attention, then you have the ability to haggle 2K of the price quite easily.

Bear in mind it's always best to buy at the end of the month, as they are desperate to makes sure they have sold the required amount of units.

Sytner reduce the price of their cars every every 6 months(£1500 on F cars)..part of there policy.
Independant work on similar schemes, so you can expect to haggle a fair bit, as it it money tied up, as far as they are concerned.

Hope that helps, not saying that i'm right...just my view.

 

Good Luck - you appear to be an equal to the slipperiest of salesmen

The results of a PPI may also give you ammunition to haggle over the price - also make sure they don't strip items of value from the car to maximise their profits. i.e. check that handbooks, tools, covers, spare tyre etc are all included in the sale

 

It also depends on how realistic the original price is.

When I bought my 355, I haggled off £2K from a independent. When I sold my 355 privately, buyer haggled off £3K from the price. You can argue that I over-priced it in the first place though... ?

 

When I brought my first Porsche...i got mugged to say the least..saleperson saw me coming, and had my trousers down around my ankles..
Best i got was a one porsche mug..lol and 500 off a car that was overpriced in the first place.

After that I learn't..

Brought my first Ferrari...and I got 2K of list price, including 6 mugs!!! car covers and free first service/full tank of fuel/1 years road tax.
I was desperate, but I waited until end of month, and with 4 days left, salesperson contiuned to ring me, I just said i cant afford that price..after numerous calls, he reached the price I was willing to pay for it..


2nd ferrari...did same again, and i worked even better, brought the car on a finance package 4% fixed, Ferrari normally give 5% variable and 6% fixed..
Dec/Jan lean months..they normally bend over backwards to geta sale..I brought it end of Dec.

 

you forgot


6) Advertising
7) Cost of showroom
8) Admin costs
9) Insurance
10) Stock finanace costs


and of course you get taxed and have to pay VAT on the whole margin not just what your left with at the end....huge margins, not really around 2-5% at most for an investment that may take anywhere from a week to six months to mature!

 

costs of advesting are Tiny...They have one yearly cost for which they can advestise as many as they want.
insurance...is not per car basis..it's per stock value..

They have the very best accountants to fiddle figures..so VAT is negated by the fact, unforseen circumstances creep in the outgoing costs.

What about current sales of F430's...isn't that at huge profits?
I know someone who traded one in, and it was sold(no work needed to be done on it) for 8K more than they paided..

How about 360's...buying at 55K or less and selling at 65K.
Recent 360 spider..brought of my mate for 88K retailed and sold at 95K..only needed warranty on it.

I have worked in the top end car sales industry(accounts mostly), so I know a tad bit about what goes on.

 

6) Advertising
7) Cost of showroom
8) Admin costs
9) Insurance
10) Stock finanace costs


All covered in Misc costs...

 

Not for £1k!, even if your figures are correct (don't know about main dealers but not for a specialist!) it's only a 8% profit on a fairly large outlay with quite a big risk

 

and of course you get taxed and have to pay VAT on the whole margin not just what your left with at the end....huge margins, not really around 2-5% at most for an investment that may take anywhere from a week to six months to mature![/QUOTE]

if we work on the basis of 5% profit..
Lets say they buy at 55K and sell at 65K..5% of the sale would mean £500 made...cant see that being the case at all..

Working on the figure they would have to shift 500 vehicles a year to make 500K..I doubt very much they do..on average they shift between 10 and 20 cars a month(over estimate).

Lets say they do a realistic 150 cars sales a year, thats 10 a month..roughly 2 a week, which isnt bad.

Minus salemen salary lets say they employ 5 @ 20K min thats 100K gone.
Sales Director and other Directors..150K.
Other Staff(admin etc.) - 50K.
Misc costs 20K.

What does that leave? bankruptcy..

Working on 5K margin per car sale..150 cars sold..750K made.
Dealership operating at profit.

 

You forgot to add servicing, parts and finance revenue

 

oh and 8.7% is YOUR figure for profit

 

That still dont add up..

If you buy that car at 55 and sell at 65...your only making £800, that again doesnt add up.

Last year a reputable super car dealership shifted 95 2nd hand/new cars.
They would be crying if it was 8% profit amount(76K earned)..instead they reported another a good turnover..hows that possible then?

You can locate annual profits for organistaions at your library/internet, do the maths yourself..

Like i said..only my opinion.

 

and as you seemed to miss it my point was, yes a well run dealership can make a healthy profit..........but not a BIG FAT profit........they're also factoring in their other costs and the capital needed to ensure they don't go bankrupt next time the market dips

 

did i say 8.7? didnt think so.
You seem an educated guy..prove me wrong some with maths according to your 8% profit margin..

 

It may not add up but they were your figures from your example

For most dealers and specialists the sale of cars isnt their largest profit centre.......Servicing and parts is

 

Fair enough...may be "huge" was the wrong word to use in this context.
But my theory is backed by my figures.
2-5 % just dont compute.

 

I agree...
What about dealships who soley deal with super car sales?? quite few spring to mind..

 

only going by market rate..2000 modena is worth 55K to dealer..if he sells at less than 65...then 2-5% is looking even more bankruptcy than before.

Give me other figures to work with.

 

very roughly

car purchased at 50K
car sold at 60k

so 10k "profit" or 20%

minus

Costs to retail 5k or 10%

Equals a Profit of 5K (you with me so far!) or 10%

minus vat/corp tax, lets be really generous and say their sooooper dooooooper accountant is a genius and they only pay 13% of that on VAT & tax that leaves them with

8.7% or 10% if their ken dodd or lester pigott!

Still not a fantastic return on their investment given the effort and risk involved........which is why they make money on the servicing, the sales is normaly a good way of getting new customers and sticking a little bit more money in the bank for the next rainy day (think back to how exotic sales were in the early 90's!)


I can only really coment on my own company and by proxy the chain of Toyota dealerships one of my investors used to own / run

Its all about volume at the end of the day both on the sales floor and in the workshop