Haggling on Ex-demo

Wanderingwidget

Having not bought a car for a while, I had seen a 6 month old Skoda Kodiaq, road tested it and thought if the price was right I would buy it. To my surprise the dealer not only offered me rock bottom price on my car, but would not lower price on Skoda, so I walked. Having done some research google tells me dealers are making between 10 and 20 % markup on used cars, so could not understand why they would not haggle on price. Am I wrong here? In fact they went as far as saying they would not be making any money on the car which I cannot believe. I was a cash buyer so maybe they were hoping to make addition money on finance. 

Does this sound right? Are dealer margins really so low now? Cant believe there was no negotiation. 

Thanks for any info

jimjames

Some dealers don't negotiate and prices are fixed. Others do. Depends if the price was reasonable.

If finance helps give a deal then worth taking it out and paying off within 14 days by withdrawing from the contract. Means you get all the incentives and can use your cash to clear the balance.

Isthisforreal99

What makes you think Google is correct in this instance? Have you found a comparable car any cheaper on auto-trader for example.

Gone are the days when you could negotiate a decent discount, now reliant in dealer contributions, 'free' servicing to sweeten the deal.

Stubod

Yes you are wrong / out of date. 

The last couple of cars I bought the dealers would not haggle. Very much " the price is the price". (You may get a set of mats thrown in if you are lucky??)

..and cash is no longer an insentive, in fact they would prefer you to do finance....

 

Grumpy_chap

Wanderingwidget said:

Having not bought a car for a while, I had seen a 6 month old Skoda Kodiaq, road tested it and thought if the price was right I would buy it. To my surprise the dealer not only offered me rock bottom price on my car, but would not lower price on Skoda, so I walked. Having done some research google tells me dealers are making between 10 and 20 % markup on used cars, so could not understand why they would not haggle on price. Am I wrong here? In fact they went as far as saying they would not be making any money on the car which I cannot believe. I was a cash buyer so maybe they were hoping to make addition money on finance. 

Does this sound right? Are dealer margins really so low now? Cant believe there was no negotiation. 

Thanks for any info

Well, 10% to 20% mark-up is not really a massive amount if that mark-up has to cover the costs of operating the showroom, preparing the car (mechanically and presentationally), honouring the risks that a used car carries, etc.

The Dealer probably was hoping to make money on finance.

There is always negotiation.  Negotiation may not always result in a deal.

Aretnap

Wanderingwidget said:

Having done some research google tells me dealers are making between 10 and 20 % markup on used cars, so could not understand why they would not haggle on price. 

Assuming that's true*

(1) 10-20% is not a huge markup, and out of that 10-20% they presumably have to pay rent on the site, staff costs, advertising bills etc etc, and more importantly 

(2) The supply of decent second hand cars for a dealer to sell is not infinite, and cars may be harder to find than customers. So it's a fallacy to assume that because a dealer paid £10,000 to but a car it's always in his interests to sell it to you for £10,500 - if he does that he's missing out on the opportunity to sell it to the next customer for £11,000, or perhaps even £12,000. It's definitely not the case that selling for anything over the price he paid represents a clear win for him.

* Just because Google says something doesn't make it true. 

Goudy

An ex demo isn't the same as far as the dealer is concerned as another used car on their lot.

Any other used car would have been traded in or bought at the auctions and marked up with their profit.

A ex demo has been bought from the manufacturer/importer new and ran by them for 6 months or more.
They can actually be a bit of a loss to them at certain times.

Obviously the don't buy at retail price, but they will have had to have still had to pay for it, paid for registration and it's first years tax and VAT just to show potential customers that model.

Now when it comes to moving it on, they are going to want as much as that investment back as they can as that normal profit on another used car isn't there anymore.

Back in 2020 when I bought my car, the dealer sold the demo I test drove to someone else as I waited for mine to be built.
The other customer was in the dealership at the same time as me and told me he paid full retail with some free servicing as he didn't want to wait 12 weeks or more.

I waited 12 weeks and got mine brand new with a £4500 discount.

Have you done any further research and priced up a brand new car on somewhere like Carwow or Drive the Deal?

WellKnownSid

As Goudy says, they didn't go to the auction to source this car - this was bought at a cost which the dealer will now want to recover.

"Demo" can also mean a lot of things.  Many will also have been used as loan cars and ragged around by the apprentices & staff driving it to HQ for training on the other side of the country.  Some will have been used as parts mules if they needed to get hold of a part PDQ without the customer having to wait - yes, I've been that customer!

ButterCheese

Wanderingwidget said:

To my surprise the dealer not only offered me rock bottom price on my car, but would not lower price on Skoda

This should come as no surprise.  Dealers are in the business of paying under the odds for cars, so that they can sell them at inflated prices.  The only way to avoid this is to sell privately and buy privately.  If you buy from a dealer then you are paying up to 40% extra for a short, limited warranty and a hassle-free transaction. That comes at a cost which many are willing to pay. The alternative is to do all of the advertising, hosting the viewing, dealing with timewasters etc etc and buying/selling 2 cars.  Less hassle but more return

Herzlos

The way people buy cars has changed and with it discounts have largely gone away. 

Only a few years ago, people would visit a forecourt to see what was in stock and the dealer would add £1k to the sticker and haggle you down.

Now everyone goes on Autotrader and sorts price low->high, so if you don't price competitively you end up far down the listings. As I understand it, most people have chosen a car now before even visiting so it's more of a formality. 

The end result being that there's no illusion of a good deal now, and dealers have less room to haggle. If you don't want to buy the car at the sticker price, someone else will. 

daveyjp

Trade in values very much depend on what the dealer will do with the traded vehicle.

If they can move it on through their forecourt you should get a better deal than if they will be moving it on, either through their trade contacts, or worse scenario auction.

As there is now so much info on car prices and values at buyers fingertips and buyers will buy from anywhere, the days of spending hours in dealerships negotiating prices are long gone.

I traded and bought a replacement car 10 days ago.The trade in value in was within a few hundred of what I expected (the dealer is keeping it to trade on) and the new vehicle was a lower price than main dealers within 100 miles.  The cost to change was agreed in 5 minutes.