ripped off?

andrewf75

Billy_Bullocks wrote: »

If they were to get £3500 it is a rather large mark up.

yep my feelings exactly. But it's way above the suggested value of the car so if they get that, fair play to them!

motorguy

Billy_Bullocks wrote: »

If they were to get £3500 it is a rather large mark up.

As a percentage, yes.

However

(a) its unlikely they'll get the asking price.
(b) theres a myriad of costs involved.

If they walk away with £300 clear they'll be doing very well.

DoaM

They bought for £2000. Let's say they actually sell for £3000 then that is 33.3% GM (gross margin) based on the bare purchase cost.

From that GM they then need to take away any costs incurred (e.g. overheads, sales guy's commission, warranty, tax, etc.) so the actual profit will be quite a bit less.

I'd expect such a business to be aiming for 10-15% net profit.

waamo

If it needed any work done on it like new brake pads or a battery they are making next to nothing.

mr_accountant

Few months ago car traded in for 2300

Saw on autotrader a month later for 3800

Car was worth around 2700-3200 around these parts, if anyone paid anywhere near asking price they must be stupid

Sure I could get more if I sold it myself but not worth the hassle and risk, plus the cost of change was good.

takman

gilbert_and_sullivan wrote: »

If you did a trade in, its the price to change that matters not how it's made up.

mr_accountant wrote: »

Sure I could get more if I sold it myself but not worth the hassle and risk, plus the cost of change was good.

Basing your decision to buy a new car on the "price to change" alone is a very bad idea and is likely to end up with you getting a bad deal.


If you see a car for £20,000 and the dealer says it will only cost you £15,000 to change then without any other information you may think its a good deal. But if your current car is worth £7000 trade in then its a pretty poor deal.


When negotiating a salesman will like to use figures like the "price to change" as a good way to avoid seperate negotiations for the sale price of the car and the trade in price which is likely to result in a worse deal for the salesman.

gilbert_and_sullivan

takman wrote: »

Basing your decision to buy a new car on the "price to change" alone is a very bad idea and is likely to end up with you getting a bad deal.


If you see a car for £20,000 and the dealer says it will only cost you £15,000 to change then without any other information you may think its a good deal. But if your current car is worth £7000 trade in then its a pretty poor deal.


When negotiating a salesman will like to use figures like the "price to change" as a good way to avoid seperate negotiations for the sale price of the car and the trade in price which is likely to result in a worse deal for the salesman.

Whats the difference.

You trade in your car to buy new car, the cheque you write is the cost to change.
Or you sell your car privately and buy a new one as cheaply as possible, the difference between the two figures is the cost to change.

A cost to change of say £7000 is going to be £7000 however you work it out, if the dealer can save a bit of tax by juggling the figures either way its no skin of the customers nose, its still £7000 CTC, if the dealer can match the CTC of other, more involved for the customer, ways of car changing, then the customer wins too.

The only people who could lose are the usual suspect conmen lurking around buying/selling media, the car dealer is better equipped to foil these low lifes than the general car punter.

takman

gilbert_and_sullivan wrote: »

Whats the difference.

You trade in your car to buy new car, the cheque you write is the cost to change.
Or you sell your car privately and buy a new one as cheaply as possible, the difference between the two figures is the cost to change.

A cost to change of say £7000 is going to be £7000 however you work it out, if the dealer can save a bit of tax by juggling the figures either way its no skin of the customers nose, its still £7000 CTC, if the dealer can match the CTC of other, more involved for the customer, ways of car changing, then the customer wins too.

The only people who could lose are the usual suspect conmen lurking around buying/selling media, the car dealer is better equipped to foil these low lifes than the general car punter.

If you walk into a dealership and want to buy a new car for £20,000 and they say the cost to change is only £5,000 then you don't know how much they are giving you for your car or how much they are discounting the car you are buying.

gilbert_and_sullivan wrote: »

If you did a trade in, its the price to change that matters not how it's made up.

So if you only know the cost to change then you can't shop around and work out if its better to sell your car privately. Discussing the cost to change is locking you into trading in your car and not being able to compare how much you would get for your car elsewhere.


So how do you compare the price you are trading your car in for with how much you can get for it privetly if you don't know what they are offering?.


In the example above you may assume that they are offering £5,000 for your car because that is the cost to change which you may decide is a fair price.
But in reality they may be willing to discount their car to £19,000 so that means your only actually getting £4,000 which would not be a very good price.

DoaM

But what does it matter? Ultimately, how much it costs you to change is ALL that matters ... HOW that is made up is irrelevant. You can easily get quotes from various places, including working out a private sale, but in the end it's the difference that matters - how much you need to find to get the end product you're looking for.

motorguy

gilbert_and_sullivan wrote: »

Whats the difference.

You trade in your car to buy new car, the cheque you write is the cost to change.
Or you sell your car privately and buy a new one as cheaply as possible, the difference between the two figures is the cost to change.

A cost to change of say £7000 is going to be £7000 however you work it out, if the dealer can save a bit of tax by juggling the figures either way its no skin of the customers nose, its still £7000 CTC, if the dealer can match the CTC of other, more involved for the customer, ways of car changing, then the customer wins too.

The only people who could lose are the usual suspect conmen lurking around buying/selling media, the car dealer is better equipped to foil these low lifes than the general car punter.

I dont agree.

The way to get the best deal is to :-

• Negotiate discount on the car you are buying
• THEN get the best price on your trade in (and use whatever means necessary to find that - other garages willing to buy it for stock, WBAC, private sale, etc)
• THEN negotiate the rate on the finance (if finance is required)

Working on a "cost to change" or "monthly payments" is a bad idea

For example, say WBAC (or another trade buyer) value a car at £15,000. If i go to a dealer for a £20K car and he tells me the "cost to change" is £5,000, i might well be happy with that as in my mind I'm getting the £15K i was expecting for my car.

BUT, the dealer might have had £1,000 discount up his sleeve, so if i'd negotiated that discount off first, and my "cost to change" from him was £5,000 i'd have known to buy his car at £19,000 and to sell my own car to the other trader for £15,000 and be £1,000 better off.

OR his car might be the cheapest in the country, but hes (Currently) giving you a naff price for your trade in - a "cost to change" doesnt show that.

Likewise - and even more simply - I might be happy enough with a cost to change of £5K because thats my budget, but not know i can squeeze the dealer for more.

Summarising -

• Do your homework on the car you're buying - if its new, check the brokers for the best price. Ask the dealer to price match to get your business or use the broker.
• Know the value of your car. Check online valuations, ring other dealers and ask to speak to the "used car buyer", check WBAC, etc.
• Know the finance rates that are available. Check the online loans checkers for the best rate. If the dealers finance has a higher APR, ask him to pricematch or use the online finance.

Working on a "cost to change" only or even worse a "monthly payment cost" only and you're flying blind to be honest.