Buying new car in cash

Grumpy_chap

motorguy said:

Thats not what we were discussing though.  We were discussing being qualified out by salespeople based on the clothes you wear.

You werent qualified out.  He just didnt offer you the deal you told him you needed to do the deal before you left.

Mercedes had the most unique method of qualifying customers.

At (one of) their larger flagship retailers last year, I was advised that a charge was made for a test drive.  £300 apparently, which they will refund off the order if you buy...

fred990

Grumpy_chap said:
Mercedes had the most unique method of qualifying customers.

At (one of) their larger flagship retailers last year, I was advised that a charge was made for a test drive.  £300 apparently, which they will refund off the order if you buy...

Bizarre isn't it. 
I quite like the idea of an E Class estate but have never driven one. Paying for a test drive would put a different perspective on the idea.....they might not be as snotty as BMW dealers though! 

motorguy

Grumpy_chap said:

motorguy said:

Thats not what we were discussing though.  We were discussing being qualified out by salespeople based on the clothes you wear.

You werent qualified out.  He just didnt offer you the deal you told him you needed to do the deal before you left.

Mercedes had the most unique method of qualifying customers.

At (one of) their larger flagship retailers last year, I was advised that a charge was made for a test drive.  £300 apparently, which they will refund off the order if you buy...

Lol.  That would be a hard no from me on that.

Mercedes seem to be changing their selling model.  Taking themselves back up market again, higher prices, less discounting, smaller volumes of sales.

Not a big fan of Mercs to be honest.  The AMG models are very good but have got to silly prices.  

zagfles

motorguy said:

zagfles said:

fred990 said:

Even if you're worth a few quid you'll be treated with disdain/contempt at a BMW dealer!

I've yet to work out how to be 'qualified' by these salesmen. 

The top-end market in anything is a strange world. Top end restaurants are notorious for rude staff, and impossibility of getting tables unless you book a month in advance, or know the maitre d. Try to buy a Rolex and you might find you can't even if you have the money https://www.telegraph.co.uk/fashion/style/cant-buy-rolex-not-price/ Similar with top end sports cars, there might be a 5 year waiting list and strict criteria to even get on it.

You'd have thought if demand exceeds supply they'd either increase supply or just jack the price up even further until demand matched supply, usual rule of economics. But that doesn't seem to work at the top end - possibly down to the reason people buy top end products in the first place, ie to show off, to demonstrate their status.

It's probably a bit vulgar for wealth to be the only thing they're showing off about, so there's also the element of how well connected you are, your status with the suppliers of the top-end product. You know the maitre d at Restaurant du Posh so you can get a table tomorrow whereas those without status have to wait a month. You have status with the posh jewellers so you are "allowed" to buy a Rolex. You're not just rich, you're well connected.

Theres a lot of speculators try to buy in to premium cars, trying to make a quick buck flipping the cars.

So its not unreasonable that the dealers want to make sure you're not going to do that, and that you're a known quantity to them.

I'm on Pistonheads and you do hear of people on there who have went in to Porsche to buy some limited edition high end GT3 or whatever (or at least, to speculatively put the deposit down on the waiting list) and to be point blank refused.

Even with regular Porsches like a 911 its quite usual for a year old 911 to cost 10% more than a new one - because the waiting list for a new one is two years.

But why do they care? They're selling a product, why are they bothered what the buyer then does with it? Of course some people will speculate if the second hand price is higher than the new price, but the question is why is the second hand price higher than new, it makes no economic sense in a free market. Except perhaps temporarily when (like now) there are supply bottlenecks. But not long term, as seems to happen in all top-end markets.

If the product is profitable and so popular that there are always waiting lists, then why aren't they expanding, setting up new factories and making more of them? Or if there's some reason they can't, then why aren't they simply raising their prices until demand matches supply?

It's probably like with any top-end product, buyers generally don't buy because it's a great product worth the high price. They buy because they want to be seen as a cut above the rest, having not only the wealth to be able to afford the product but also be "on the list", have status with suppliers of the top-end product/service. The product loses its snob value if too many people have them, or they're too easy to get hold of. So they not only have a price barrier that keeps the plebs out, but also a status barrier. They restrict supply deliberately to keep exclusivity. Tables at top end restaurants, Rolexes, Porsches, diamonds etc. All use the same business model.

motorguy

zagfles said:

motorguy said:

zagfles said:

fred990 said:

Even if you're worth a few quid you'll be treated with disdain/contempt at a BMW dealer!

I've yet to work out how to be 'qualified' by these salesmen. 

The top-end market in anything is a strange world. Top end restaurants are notorious for rude staff, and impossibility of getting tables unless you book a month in advance, or know the maitre d. Try to buy a Rolex and you might find you can't even if you have the money https://www.telegraph.co.uk/fashion/style/cant-buy-rolex-not-price/ Similar with top end sports cars, there might be a 5 year waiting list and strict criteria to even get on it.

You'd have thought if demand exceeds supply they'd either increase supply or just jack the price up even further until demand matched supply, usual rule of economics. But that doesn't seem to work at the top end - possibly down to the reason people buy top end products in the first place, ie to show off, to demonstrate their status.

It's probably a bit vulgar for wealth to be the only thing they're showing off about, so there's also the element of how well connected you are, your status with the suppliers of the top-end product. You know the maitre d at Restaurant du Posh so you can get a table tomorrow whereas those without status have to wait a month. You have status with the posh jewellers so you are "allowed" to buy a Rolex. You're not just rich, you're well connected.

Theres a lot of speculators try to buy in to premium cars, trying to make a quick buck flipping the cars.

So its not unreasonable that the dealers want to make sure you're not going to do that, and that you're a known quantity to them.

I'm on Pistonheads and you do hear of people on there who have went in to Porsche to buy some limited edition high end GT3 or whatever (or at least, to speculatively put the deposit down on the waiting list) and to be point blank refused.

Even with regular Porsches like a 911 its quite usual for a year old 911 to cost 10% more than a new one - because the waiting list for a new one is two years.

But why do they care? They're selling a product, why are they bothered what the buyer then does with it? Of course some people will speculate if the second hand price is higher than the new price, but the question is why is the second hand price higher than new, it makes no economic sense in a free market. Except perhaps temporarily when (like now) there are supply bottlenecks. But not long term, as seems to happen in all top-end markets.

If the product is profitable and so popular that there are always waiting lists, then why aren't they expanding, setting up new factories and making more of them? Or if there's some reason they can't, then why aren't they simply raising their prices until demand matches supply?

Because the speculator will likely never come back - they'll want a quick buck and move on.  If they cultivate long term relationships then they make profit every time, not just once.

With a two year waiting list on a new car, and theres only a tiny supply of 1 year old cars (as owners will have waited 2 years to own it, so are unlikely to sell that soon).  For example if you wanted to buy a 2022 911 Carerra tomorrow, theres only 8 for sale across the entire country, according to Autotrader.  And theres people who will pay more than list price for a year old one, knowing the depreciation will be relatively low over the long term anyway.

RE: why not make more?  Because theres a tipping point.  Make too many and exclusivity is lost, you have to start to discount, residuals start to fall, etc.  Its easier to make high profit on fewer cars than to chase volume and lose margin.  Plus Porsche are part of a much bigger group.  They dont want / need to be a volume seller.  Theres Audi, VW, etc for that.

motorguy

zagfles said:

It's probably like with any top-end product, buyers generally don't buy because it's a great product worth the high price. They buy because they want to be seen as a cut above the rest, having not only the wealth to be able to afford the product but also be "on the list", have status with suppliers of the top-end product/service. The product loses its snob value if too many people have them, or they're too easy to get hold of. So they not only have a price barrier that keeps the plebs out, but also a status barrier. They restrict supply deliberately to keep exclusivity. Tables at top end restaurants, Rolexes, Porsches, diamonds etc. All use the same business model.

The likes of a Porsche 911 IS a cut above the rest.  And if you have money - real money - why would you not want the best?

And yes maybe there is a pleb / status barrier for tables at top end restaurants, rolexes, Porsches, diamonds etc but thats how it is.  If i was incredibly successful and extraordinarily wealthy i wouldnt want to be seated near riff raff who turned up in the same car as i did.  Whats the point of money if its not to buy you exclusivity?

zagfles

motorguy said:

zagfles said:

motorguy said:

zagfles said:

fred990 said:

Even if you're worth a few quid you'll be treated with disdain/contempt at a BMW dealer!

I've yet to work out how to be 'qualified' by these salesmen. 

The top-end market in anything is a strange world. Top end restaurants are notorious for rude staff, and impossibility of getting tables unless you book a month in advance, or know the maitre d. Try to buy a Rolex and you might find you can't even if you have the money https://www.telegraph.co.uk/fashion/style/cant-buy-rolex-not-price/ Similar with top end sports cars, there might be a 5 year waiting list and strict criteria to even get on it.

You'd have thought if demand exceeds supply they'd either increase supply or just jack the price up even further until demand matched supply, usual rule of economics. But that doesn't seem to work at the top end - possibly down to the reason people buy top end products in the first place, ie to show off, to demonstrate their status.

It's probably a bit vulgar for wealth to be the only thing they're showing off about, so there's also the element of how well connected you are, your status with the suppliers of the top-end product. You know the maitre d at Restaurant du Posh so you can get a table tomorrow whereas those without status have to wait a month. You have status with the posh jewellers so you are "allowed" to buy a Rolex. You're not just rich, you're well connected.

Theres a lot of speculators try to buy in to premium cars, trying to make a quick buck flipping the cars.

So its not unreasonable that the dealers want to make sure you're not going to do that, and that you're a known quantity to them.

I'm on Pistonheads and you do hear of people on there who have went in to Porsche to buy some limited edition high end GT3 or whatever (or at least, to speculatively put the deposit down on the waiting list) and to be point blank refused.

Even with regular Porsches like a 911 its quite usual for a year old 911 to cost 10% more than a new one - because the waiting list for a new one is two years.

But why do they care? They're selling a product, why are they bothered what the buyer then does with it? Of course some people will speculate if the second hand price is higher than the new price, but the question is why is the second hand price higher than new, it makes no economic sense in a free market. Except perhaps temporarily when (like now) there are supply bottlenecks. But not long term, as seems to happen in all top-end markets.

If the product is profitable and so popular that there are always waiting lists, then why aren't they expanding, setting up new factories and making more of them? Or if there's some reason they can't, then why aren't they simply raising their prices until demand matches supply?

Because the speculator will likely never come back - they'll want a quick buck and move on.  If they cultivate long term relationships then they make profit every time, not just once.

Why not? If the situation stays the same ie second hand prices higher, the speculator will likely want a repeat, and again, and again. Could be a better long term customer than the posers

With a two year waiting list on a new car, and theres only a tiny supply of 1 year old cars (as owners will have waited 2 years to own it, so are unlikely to sell that soon).  For example if you wanted to buy a 2022 911 Carerra tomorrow, theres only 8 for sale across the entire country, according to Autotrader.  And theres people who will pay more than list price for a year old one, knowing the depreciation will be relatively low over the long term anyway.

RE: why not make more?  Because theres a tipping point.  Make too many and exclusivity is lost, you have to start to discount, residuals start to fall, etc.  Its easier to make high profit on fewer cars than to chase volume and lose margin.  Plus Porsche are part of a much bigger group.  They dont want / need to be a volume seller.  Theres Audi, VW, etc for that.

There is a tipping point, where supply and demand match. That's how markets usually work. Expensive cars (or watches etc) will never be high volume simply because most people can't afford them, but top-end there seems to be additional deliberate barriers to ownership to make the product hard to get hold of even you can afford it.

I guess even top end products lose their snob value if lottery winners or people who've come into a big inheritance buy them

motorguy

zagfles said:

motorguy said:

zagfles said:

motorguy said:

zagfles said:

fred990 said:

Even if you're worth a few quid you'll be treated with disdain/contempt at a BMW dealer!

I've yet to work out how to be 'qualified' by these salesmen. 

The top-end market in anything is a strange world. Top end restaurants are notorious for rude staff, and impossibility of getting tables unless you book a month in advance, or know the maitre d. Try to buy a Rolex and you might find you can't even if you have the money https://www.telegraph.co.uk/fashion/style/cant-buy-rolex-not-price/ Similar with top end sports cars, there might be a 5 year waiting list and strict criteria to even get on it.

You'd have thought if demand exceeds supply they'd either increase supply or just jack the price up even further until demand matched supply, usual rule of economics. But that doesn't seem to work at the top end - possibly down to the reason people buy top end products in the first place, ie to show off, to demonstrate their status.

It's probably a bit vulgar for wealth to be the only thing they're showing off about, so there's also the element of how well connected you are, your status with the suppliers of the top-end product. You know the maitre d at Restaurant du Posh so you can get a table tomorrow whereas those without status have to wait a month. You have status with the posh jewellers so you are "allowed" to buy a Rolex. You're not just rich, you're well connected.

Theres a lot of speculators try to buy in to premium cars, trying to make a quick buck flipping the cars.

So its not unreasonable that the dealers want to make sure you're not going to do that, and that you're a known quantity to them.

I'm on Pistonheads and you do hear of people on there who have went in to Porsche to buy some limited edition high end GT3 or whatever (or at least, to speculatively put the deposit down on the waiting list) and to be point blank refused.

Even with regular Porsches like a 911 its quite usual for a year old 911 to cost 10% more than a new one - because the waiting list for a new one is two years.

But why do they care? They're selling a product, why are they bothered what the buyer then does with it? Of course some people will speculate if the second hand price is higher than the new price, but the question is why is the second hand price higher than new, it makes no economic sense in a free market. Except perhaps temporarily when (like now) there are supply bottlenecks. But not long term, as seems to happen in all top-end markets.

If the product is profitable and so popular that there are always waiting lists, then why aren't they expanding, setting up new factories and making more of them? Or if there's some reason they can't, then why aren't they simply raising their prices until demand matches supply?

Because the speculator will likely never come back - they'll want a quick buck and move on.  If they cultivate long term relationships then they make profit every time, not just once.

Why not? If the situation stays the same ie second hand prices higher, the speculator will likely want a repeat, and again, and again. Could be a better long term customer than the posers

With a two year waiting list on a new car, and theres only a tiny supply of 1 year old cars (as owners will have waited 2 years to own it, so are unlikely to sell that soon).  For example if you wanted to buy a 2022 911 Carerra tomorrow, theres only 8 for sale across the entire country, according to Autotrader.  And theres people who will pay more than list price for a year old one, knowing the depreciation will be relatively low over the long term anyway.

RE: why not make more?  Because theres a tipping point.  Make too many and exclusivity is lost, you have to start to discount, residuals start to fall, etc.  Its easier to make high profit on fewer cars than to chase volume and lose margin.  Plus Porsche are part of a much bigger group.  They dont want / need to be a volume seller.  Theres Audi, VW, etc for that.

There is a tipping point, where supply and demand match. That's how markets usually work. Expensive cars (or watches etc) will never be high volume simply because most people can't afford them, but top-end there seems to be additional deliberate barriers to ownership to make the product hard to get hold of even you can afford it.

I guess even top end products lose their snob value if lottery winners or people who've come into a big inheritance buy them

Yes, absolutely to all of that.  You cant stop a lottery winner going in and buying a new or used Ferrari or Porsche (i'll be first there when my numbers come up), but they're the exception not the rule.  Perhaps a speculator may come back a second time, but almost certainly they wont, and why would you risk peeing off loyal customers to give a speculator a slot on a very short list?

Clearly Porsche know their market much better than you or i, and as such have trodden the fine line of supply / demand / exclusivity for quite a number of decades and been very very successful, so its hard to criticise their approach.

zagfles

motorguy said:

zagfles said:

It's probably like with any top-end product, buyers generally don't buy because it's a great product worth the high price. They buy because they want to be seen as a cut above the rest, having not only the wealth to be able to afford the product but also be "on the list", have status with suppliers of the top-end product/service. The product loses its snob value if too many people have them, or they're too easy to get hold of. So they not only have a price barrier that keeps the plebs out, but also a status barrier. They restrict supply deliberately to keep exclusivity. Tables at top end restaurants, Rolexes, Porsches, diamonds etc. All use the same business model.

The likes of a Porsche 911 IS a cut above the rest.  And if you have money - real money - why would you not want the best?

And yes maybe there is a pleb / status barrier for tables at top end restaurants, rolexes, Porsches, diamonds etc but thats how it is.  If i was incredibly successful and extraordinarily wealthy i wouldnt want to be seated near riff raff who turned up in the same car as i did.  Whats the point of money if its not to buy you exclusivity?

Personally if I was filthy rich I'd probably get a private jet, or take a trip into space. I'm not interested in status symbols, I wouldn't feel the need to be "exclusive", or feel I'm better than the "riff raff". I'd buy products/experiences which I'd enjoy for what they are, not what I think they say about me or think they set me apart from the plebs.

I definitely wouldn't buy a Porsche, Rolex, diamonds, or try to chat up the maitre d of the nearest michelin star restaurant

zagfles

motorguy said:

zagfles said:

motorguy said:

zagfles said:

motorguy said:

zagfles said:

fred990 said:

Even if you're worth a few quid you'll be treated with disdain/contempt at a BMW dealer!

I've yet to work out how to be 'qualified' by these salesmen. 

The top-end market in anything is a strange world. Top end restaurants are notorious for rude staff, and impossibility of getting tables unless you book a month in advance, or know the maitre d. Try to buy a Rolex and you might find you can't even if you have the money https://www.telegraph.co.uk/fashion/style/cant-buy-rolex-not-price/ Similar with top end sports cars, there might be a 5 year waiting list and strict criteria to even get on it.

You'd have thought if demand exceeds supply they'd either increase supply or just jack the price up even further until demand matched supply, usual rule of economics. But that doesn't seem to work at the top end - possibly down to the reason people buy top end products in the first place, ie to show off, to demonstrate their status.

It's probably a bit vulgar for wealth to be the only thing they're showing off about, so there's also the element of how well connected you are, your status with the suppliers of the top-end product. You know the maitre d at Restaurant du Posh so you can get a table tomorrow whereas those without status have to wait a month. You have status with the posh jewellers so you are "allowed" to buy a Rolex. You're not just rich, you're well connected.

Theres a lot of speculators try to buy in to premium cars, trying to make a quick buck flipping the cars.

So its not unreasonable that the dealers want to make sure you're not going to do that, and that you're a known quantity to them.

I'm on Pistonheads and you do hear of people on there who have went in to Porsche to buy some limited edition high end GT3 or whatever (or at least, to speculatively put the deposit down on the waiting list) and to be point blank refused.

Even with regular Porsches like a 911 its quite usual for a year old 911 to cost 10% more than a new one - because the waiting list for a new one is two years.

But why do they care? They're selling a product, why are they bothered what the buyer then does with it? Of course some people will speculate if the second hand price is higher than the new price, but the question is why is the second hand price higher than new, it makes no economic sense in a free market. Except perhaps temporarily when (like now) there are supply bottlenecks. But not long term, as seems to happen in all top-end markets.

If the product is profitable and so popular that there are always waiting lists, then why aren't they expanding, setting up new factories and making more of them? Or if there's some reason they can't, then why aren't they simply raising their prices until demand matches supply?

Because the speculator will likely never come back - they'll want a quick buck and move on.  If they cultivate long term relationships then they make profit every time, not just once.

Why not? If the situation stays the same ie second hand prices higher, the speculator will likely want a repeat, and again, and again. Could be a better long term customer than the posers

With a two year waiting list on a new car, and theres only a tiny supply of 1 year old cars (as owners will have waited 2 years to own it, so are unlikely to sell that soon).  For example if you wanted to buy a 2022 911 Carerra tomorrow, theres only 8 for sale across the entire country, according to Autotrader.  And theres people who will pay more than list price for a year old one, knowing the depreciation will be relatively low over the long term anyway.

RE: why not make more?  Because theres a tipping point.  Make too many and exclusivity is lost, you have to start to discount, residuals start to fall, etc.  Its easier to make high profit on fewer cars than to chase volume and lose margin.  Plus Porsche are part of a much bigger group.  They dont want / need to be a volume seller.  Theres Audi, VW, etc for that.

There is a tipping point, where supply and demand match. That's how markets usually work. Expensive cars (or watches etc) will never be high volume simply because most people can't afford them, but top-end there seems to be additional deliberate barriers to ownership to make the product hard to get hold of even you can afford it.

I guess even top end products lose their snob value if lottery winners or people who've come into a big inheritance buy them

Yes, absolutely to all of that.  You cant stop a lottery winner going in and buying a new or used Ferrari or Porsche (i'll be first there when my numbers come up), but they're the exception not the rule.  Perhaps a speculator may come back a second time, but almost certainly they wont, and why would you risk peeing off loyal customers to give a speculator a slot on a very short list?

Clearly Porsche know their market much better than you or i, and as such have trodden the fine line of supply / demand / exclusivity for quite a number of decades and been very very successful, so its hard to criticise their approach.

If second hand prices stay above new, why wouldn't a speculator be a repeat customer??

Of course they know their market. That's the point.