Dealer profit margins - Alf
Test drove a new Toyota Yaris 1.0 and a Skoda Fabia 1.4 today. Same 68 BHP output for both but the Yaris wins hands down. The Skoda interior is a big let down. Silly little switches that you're afraid to touch in case they break etc. Can any one tell me whether the headlights on a Yaris are any good?

We are inundated with fast talking TV presenters-cum-car dealers telling us that we should be able to knock shedloads of cash off the price of a brand new car at a dealer just by asking the right questions and looking well hard, blah, blah.

I can't reconcile this with the letter from Toyota Uk that my local dealer showed me. It states that there is a 2% profit margin on the pre-tax price for a 3 -door Yaris and a 4% margin for a 5 door meaning that the lowest he could go for a cash buy on a Yaris 5 door GS manual with mettalic is £8,647 i.e. a £300 discount from list. Referring to the letter he said he could not move on the price any further.

Could the letter be a salesman ploy or are we getting a load of carp from TV land? On the other hand how can these salesmen afford to put bread on the table if that's all they're making?

Any one had an experience from buying from Car supermarkets, good or bad?

Alf
Re: Dealer profit margins - Mark
Hi Alf

I have bought my last 3 cars from "supermarkets", the last one being a passat from FOW.

In general as long as you carefully compare the spec to make sure it is the same as UK then you can compare the price shown against UK list on a realistic basis (more applies if new than S/H). Once you have like for like you can make up your mind.

The Passat was nearly £3k cheaper than best offer I had from a VAG dealer and was new on registration.

In general PX prices offered by these sites are a waste of time I have always sold the outgoing car via autotrader (AT website was v.good).

It is also worth bearing in mind that supermarket finance, insurance and warranties are often not the best value but you can ask if they will match better rates from elsewhere.

Also if you do buy check the docs very carefully, I initally got various docs relating to 2 different motors but was able to sort this out reasonably easily.
There have been a number of previous posts about supermarkets if you search, with both good and bad experiences being listed.

as ever

Mark
Re: Dealer profit margins - martin
going over to Belgium or getting hold of a company that does the importing for you and saves the hassel will save you a packet if new is what you want. Really, I have seen £4500 difference on a Golf between here and Belgium, so i cannot understand why anyone would buy a new car in the UK!!!!

This area demands much research if you want to buy and as you probably realise there are some catches such as waiting lists. But i have some friedns who brought a 306 and saved massively on any UK prices, so it can be done, but with caution and patience.
Re: Dealer profit margins - Mark
Hi Martin

I did look long and hard at importing and I know I could have saved more, but the supermarket had the model I wanted in stock and it was mine within 5 days of seeing it (time taken to process reg at local DVLA office). Most import sites wanted about 2-3 months or longer at the time for a Passat as it was when the new 2001 model came out.

On reflection the little bit more I paid was worth it for being able to have it when I wanted it as it were.

as ever

Mark
Re: Dealer profit margins - Andrew T
I'm not sure you can ever make worthwhile generalisations about prices at car supermarkets. I compared a PX deal at Fords of Winsford (FOW) with the same swop at a nearby Peugeot dealer (Crewe) and found little difference. Probably depends on the sellability of the trade-in car, whether it is the same marque, and other factors. In the end you just have to shop around and hope to find someone with a special offer you like.
Re: Dealer profit margins - Alf
Thanks,

Any problems with selling on your old supermarket cars because they were European imports ?
Re: Dealer profit margins - Mark
Alf

of the 3 I still have one the others were sold via Auto Trader, the first in the paper version the second on the web.

The first was UK sourced no problems, the second (Vectra DI) was an import (S Eire) no problems or faces pulled by the buyer, I had all the docs plus good service history and receipts it was probably a better buy than some of the non imports available at the same time. The car was by then 4 years old and had 125k on it.

I got over 50% more this way than by accepting the PX offer from the supermarket they offered £2200 I got £3800.

as ever

Mark
Re: Dealer profit margins - Mark
I think the explanation to this is that dealers all work on retrospective volume discounts, which are far greater than the basic discounts they get.

One of the main dealers (Ford I think) around here claims to be selling at cost + £100.

It is clear that they can't come close to covering there costs on this margin. So retrospective discounts are the answer.
Re: Dealer profit margins - Moosh
Re volume discounts

I think another reason for this is to squeeze out the small franchise dealer making it uneconomic to survive and so give up the dealership.
Re: Dealer profit margins - crazed
5 door gs

£8,111
www.broker4cars.co.uk/toyotaprices.htm

add a few quid for met
Re: Dealer profit margins - Marcus
I bought SWMBO a Yaris Verso GLS Auto from Trade Sales in Slough. It was 100% to UK spec with English literature etc.

They will fax you exact spec. Add cost of RFL and £51 to advertised prices.
If you want to save money...... - Import - ant
....import the car you want.

Beware car supermarkets as their cars are not always to full UK spec. Always ask them 'is this car to full UK spec?' and get it in writing.

If using an agent like myself, NEVER pay your deposit to anyone but the franchised dealer's account.
Re: If you want to save money...... - Alf
Import-ant,

Anybody manning your website, sent off for a quote 2 days ago. No reply yet.
Re: Dealer profit margins - Chi Kwong Chiu
I believe that if you buy at a supermarket you will likely be the second registered owner of the vehicle as the supermarket has to import them into the country under their own name.

I imported through an agent and saved quite a bit of money but if you saw the article on tonights 5th Gear about pitiful trade-ins offered by dealers for imported vehicles then that may have put you off.... I have the exact same Golf that old Quentin was leaning on and was struck dumb when he said that the owner of the golf was only offered 11K for it by a VW dealer - It was a brand new 02 plate which probably cost 15K a month ago!

This may have been an extreme example they found (I hope) and you would probably be offered a more reasonable price at another dealer or by selling privately - so don't write off importing.

Alternatively, you could try a uk broker who will source a car from UK dealer for you. For example, try www.drivethedeal.co.uk - they seem to have a lot of good press.

Chi
Re: Dealer profit margins - Alf
Be interesting to see what Marks reply is, he has had 3 supermarket cars.
Re: Dealer profit margins - Mark
Alf

the first was nearly new and uk sourced, the other two were brand new imports.

Both of these were "new at first registration" on logbook and I was first registered keeper. The V5 does not indicate in any way they were imports the only clue is the PDI stamp in the service book.

as ever

Mark
Re: Dealer profit margins - Alf
Mark,

Can I ask who you used, TradeSales pre register all their cars, therefore I would be on the log book as 2nd owner, I'd rather avoid this if poss.

Alf
Re: Dealer profit margins - Mark
Hi Alf

It was Fords of Winsford

hope this helps

e.mail me if you want to discuss further.
Re: Dealer profit margins - martin
exactly, no sign of car being imported or not. and if you sell classified and follow all the common sense rules about doig so, you should have no probs making a fair bit of doe when you sell the motor on after a couple of yrs.

Buying import new, keeping for 4-5 yrs and then selling pivately must be a sure way of having trouble free motoring, yo can save yourself a packet and sell the car on according to the second hand market in the UK, not in the country of origin...

just demands some serious homework to make sure thingsgo smoothly.
Re: Dealer profit margins - Alf
I suppose it depends what car you buy but I have lokked into importing a Yaris from Netherlands and The total cost after paying VAT back in UK is not even £200 cheaper than TRadeSAles in Slough. That £200 will be aswllowed up by travel costs. (unless you tie in the purchase with a holiday)

Can't see the point for the Yaris.

Alf
Re: If you want to save money...... - Dave N
Alf, see the thread above re; Citroen VTR trade-in price, and consider labour rates, and spares prices, and you have the answer as to how they make money. Not to mention the fact that they get bonus's on total car sales each month.
Re: Dealer profit margins - Dog Breath
The letter from Toyota dictating prices is illegal - agreements which fix prices are prohibited by s2 of the Competition Act 1998 (which replaced the Resale Prices Act 1976). Any such agreement is "void" - legally the dealer can charge what they like.
Re: Dealer profit margins - Dan J
Is this definitely true Dog Breath? SWMBO has been looking to buy a Yaris and when arguing the price down we got shown a similar letter - I thought it was a bit odd.

Look forward to your reply.

Dan
Re: Dealer profit margins - Alf
Thanks all for your replies.
Re: Dealer profit margins - Gary Bain
On toyota you can obtain alot more than 2% the lead in Yaris is discounted by 5% with the other models discounted by 7%. If you want more details please e-mail me.
Re: Dealer profit margins - Pete
This business about poor trade-ins for for imports is dealer inspired rubbish. There are some cars of which all models are imports ie not built in England. If I have bought a car for £10,000, imported by me from Holland, why should it be worth less on trade-in than the same make and model imported by a manufacturer's agent and sold for £14.000? The only difference is what I paid for it, the dealer I am trying to P/X it with knows where I got it and tries to screw me just because I got it cheaply. Nothing new there then!
Re: Dealer profit margins - Mark (Brazil)
>The letter from Toyota dictating prices is illegal - agreements which fix prices are prohibited by s2 of the Competition Act 1998 (which replaced the Resale
>Prices Act 1976). Any such agreement is "void" - legally the dealer can charge what they like.

I don't think the point of the letter was fixing the prices, which would be, as you say, illegal.

Wasn't the point of the letter to confirm the cost price, profit and therefore confirm that the dealer was not making a large profit and therefore didn't feel able to offer a discount ?

And this, by the way, is a pretty standard approach int eh US. To ask to see teh original invoice for the car, and therefore know exactly the profit the dealer makes on the car is normal.

Of course, this doesn't take care of the retrospective discounts, target payment awards, commission on finance, commission on any other prodcuts such as warranty and the future profit from servicing the thing.
Re: Dealer profit margins - Flat in Fifth
Several comments to be made here.

Why do people think that *only they* should be the one to profit from this situation and consider the individual down the line trying to take a share of the profit as trying to screw them. How childish and arrogant can you get?

To give a made up example. Person A buys a £10,000 car @ UK dealer market price (not list), but saves £3000 by paying £7000 for an import.

Making the maths simple, suppose that when they decide to sell the market price of a UK dealer supplied car is £7000, ie depreciation is 30%.

Then the whingers, of which there are quite a few on this thread/site complaining that when Person B finds out its an import they only offer say £5000. ie roughly 30% depreciation as opposed to the £7000 they think should be offered. Plus note the saving for person B is now £2000 ie this has also been reduced by roughly the same proportion.

Why should Person B pay for A's motoring. Why take the risk that the car might not quite be UK spec in some way? Plenty more fish in the sea. The market rules. A car or any other commodity is only worth as much as anyone is prepared to pay for it, in that condition at that time etc.

I agree that it is wrong for a dealer to offer the reduced trade in price and then put it up for sale at the full rate, but it is up to us buyers to check out the details, and just refuse to buy any car without the necessary history.

Then why accuse dealers, when quite frankly some of the dodgiest most untrustworthy people to deal with are not in the trade.
"Why are you selling it?"
"Oh I feel like a change."
Nothing mentioned about the gearbox noise of course.

Then the dealer goes out of business and we have to travel miles to get it serviced. For example local Ford agent to the office has just gone bang.

The real villains in this are the manufacturers who abuse the block exemption they have under EU competition law to prevent UK dealers from operating on a level playing field with their foreign colleagues.

These are EU competition rules by the way which are eye watering in their complexity and draconian in the penalties that can be applied if you fall foul. So I name the EU as also guilty in allowing the block exemption to remain for car manufacturers.