typical dealer markup? SOLVED

[dieselnutjob]

I am already getting bored looking for the car of my exact spec for a reasonable price, so I am trying a different tactic.

 

I found the car of the almost exact spec I want, and it looks immaculate in the pictures but the dealer is advertising it for about £1000 more than he should be (so a 7k car for 8k).

 

I emailed and asked if the car is still available and he replied yes and when do I want to see it.

 

I replied back saying not until the price is more realistic.

 

He said make an offer and I will talk to the boss.

 

They obviously haven't had it in long because it is off with a valeting company at the moment.

 

So.

 

The guidebooks say 6k for one of these private (but you can't find them privately).

Other cars have been (after haggling) £6600 for one with some paint blisters and a less nice interior colour and £6000 for one with some nicks in the rear bench leather and broken aircon.

 

This one has £300-600 extras on it so it would possibly be £6400 here down south private/part ex, hence my feeling is that it is a £7000 car in a dealer.

 

So, what is the equation/markup that these guys work on?  10%? 15%?

I guess that they have to pay rent / wages / valeting that the one man band guys don't have to, but hopefully the cars aren't f#@&ed either.

 

I just can't see them coming down £1000 now.  Maybe after they've had it for a month and can't shift it.....

 

Lastly, it has the enormous 20" blingtastic wheels on it which ruin the ride, but which I don't want.  I would actually prefer the 18" ones (there is a very nice design called Dynamic).  It seems that other Jag owners want the 20" ones so there might be some scope for a deal to put some of those ££s back in my pocket by doing some swap+££ deal on one of the forums.  or there might not.  Those wheels are £400 new each.

[djimbob]

There is no real industry standard for dealer mark ups as far as I know, due to the different range of dealers such as part time from their house to the big prestige guys in multi million pound showrooms.

 

I would get a figure in your head you are happy to pay for the condition of car you are after, and just stick to it - there is a good chance the dealer will not come down to it, so it's up to you then to pay the rarity premium if you really are desperate!

 

Flogging the wheels is a good idea, but don't bank on making a huge profit, you can never tell what the market is like for them until you have the folding in your hand really, as I found out quite recently with some Daimler alloys.

 

Good luck anyway, and always remember Jags are for winners, there will always be another come along eventually

 

,

[xtriple]

In this day and age of internet shopping, it is rare for a dealer to go that much over book. It must 'stand him in' very badly - i.e. he gave too much for it, or it needed lots of expensive repairs before it could be retailed. If so, he is unlikely to drop that much as he will want to recoup his investment.

 

However, if it is the car you want, the spec you want and has a decent warranty (doubtful at that age)  then sod the money and bid him in the balls! I'd give him a kick at 6.5 and go from there. Always keep negotiations sweet and light and you are more likely to come away with a deal you are happy with.

[Cheggers]

The car is £1000 more than you want to pay and has the "wrong" wheels...Sounds like a walk-away job to me.

[dieselnutjob]

I don't need to walk away, I haven't even walked in.

 

The thing is that I want a dark blue sovereign x350 (not x358) TDVI short wheelbase with cream interior that I can afford but not with intergalactic mileage.

 

Most of them seem to be grey, silver or black (yawn) and many of them are "executive" trim which will not do.

 

I saw one with a brown interior and it basically ruined it.

 

I should be more patient really. My impatience is going to cost me ££s.

[Urko]

The mileage is just shy of the expensive cambelt change at 105K - I notice a lot of these (and the other cars with basically the same engine - Disco3, Pug 406, Citroen C6) for sale at around this mileage.

 

You are right about the wheels - I had a TDVI X350 that had factory 19s (it was a Sport premium) - I bought some 17s (yes the older ones came with 17s) off a bloke and they rode much much better - and with narrower tyres they were lighter and improved fuel consumption too.

 

I cannot stress enough how little I recommend anyone getting an X350 though - mine was a hideously unreliable money pit.

 

BTW check if it has the optional TPMS if you want to change the wheels - if it does, you'll need the replacement wheels to have the valves - one per wheel and not cheap.

 

When I bought mine, I gave up looking for a cream interior because I also wanted HID lights and getting both was nigh impossible.  There aren't as many X350s around as you might imagine.

[Uncle Jimmy]

FFS buy a burnt orange Ambassador with brown draylon interior and get your life back on track.

[The Old Bloke Next Door]

I'd buy this http://autoshite.com/topic/24704-shonky-old-jag/ and spend a few quid on it.

[warren t claim]

What's wrong with a dealer who's providing a service making a living?

[dieselnutjob]

In this day and age of internet shopping, it is rare for a dealer to go that much over book. It must 'stand him in' very badly - i.e. he gave too much for it, or it needed lots of expensive repairs before it could be retailed. If so, he is unlikely to drop that much as he will want to recoup his investment.

 

I don't get this.  If he paid too much or had to do repairs then that totally does not make the car worth any more.  All he is doing is setting himself up to have a car sitting around for weeks or months unsold.

 

Equally if a dealer is lucky or skillful enough to get himself a steal that doesn't make the car less valuable either.

 

In either case the logical thing to do is to put a car up for the same price, which is the most that you think that you can get away with without the market showing no interest at all.  How you got to that place isn't really relevant.

[colino]

You do understand trading don't you?  I realise it is the the wrong price and wrong wheels for you, but oddly it appears it is, "the car of the almost exact spec I want" so the seller must inevitably bend his will to yours and offer a colossal discount?

Or perhaps, instead, wait for another, serious buyer.

There is a bum for every seat.

[smellypoo]

Put simply, the dealers markup is their business (quite literally, I know that comes across quite blunt but it's not my intention to sound hostile, far from it) so they'll list something for sale at a level they're happy with and will actually sell for whatever profit they'll accept or loss they're willing to stomach. If they 'overprice' compared to 'the market' and it sits on their inventory for ever, it is their car so it's their problem if they're waiting on the perfect offer. 

 

The real question as a buyer is, for the specific example under consideration, 'what is it worth to you'? 

 

Re: the car, it does look rather nice! I understand what you say re: the wheels, they wear big wheels well but it's that balance of looks versus comfort. 

[trigger]

There's normally about £800-1000 profit on most mid value cars on the forecourt i find.

 

If it helps the car went on Autotrader on 21st April 2016 so they have had it over a month already.

[egg]

Would get the speedo recalibrated for the wheel size change, no idea of cost for that?

[smellypoo]

Would get the speedo recalibrated for the wheel size change, no idea of cost for that?

 

IIRC you'd only need that if the radius of the wheel/tyre combination changes significantly, I think most speedometers are designed to over read to build in a little tolerance but don't quote me on that!

[Tamworthbay]

If it's a proper dealer not a guy who buys and sells a couple from his house every week then haggle haggle haggle, if it's overpriced and he has had it a long time then he might be prepared to take a hit just to get rid. I got an e300 for my father in law a few years back that was priced up at £9000 and shook hands at £5700. It doesn't happen every time but it never happens if you don't try. With the merc is was the poverty spec interior that was holding it back. When I look for cars for my wife at dealers I will always go for unpopular models in unusual colours (and we love doom blue ourselves) and be prepared to walk away a lot. The Mazda 3 she has was up at £5995 and we paid £4000 a month after we first viewed it, I left my number and told the guy to call me if it didn't sell. Being a doom blue saloon it didn't sell so he called.

[srad34]

You are talking about a new car with 20" rimz?

 

You know this isnt the Pistonheads forum, right? - We talk about oxidising 13" alloys or better still rusty steelies with chrome centre caps my friend!

[Alexg]

Typical dealer mark up in this price range is between £1500 - £2000 for a bread and butter car, and £2500 - £3000 on something lumpy.

 

I expect that Jaguar has the best part of £3000 across it. However bear in mind that 20% of the mark up goes to the tax man (that's the mark up before any recon' work, tyres, etc) and I'd expect a good few hundred pounds in soft preparation and rectifying other giggles, maybe more. Warranty costs too, it'll be worth finding out how long the car comes with as if it's 12 months, this is easily worth an extra few hundred to you.

 

I work for a small dealer. We advertise cars for what we believe we can sell them for. We rely on cash flow and so can't afford to sit on stock too long. That said, if we know we have something special we'll be prepared to ask that bit more if we believe it's justified. That Jag doesn't seem cheap, but cars like that sell on specification and condition. So if it's well above average with desirable extras be prepared to pay more and for any knowledgeable dealer to dig their heals in.

 

Please don't bid him £6000 or something silly. I have people doing this sort of thing all day, and their enquiry goes right to the back of the pile. Don't expect a dealer to be flexible because it's not exactly what you're after either; that's your problem not his, and he'll be better off selling it to the guy who does want the big wheels etc. The most I would bid is £1000 off, but if you're going to do that be serious about wanting to buy it. Just asking for a dealers best price is pointless, they've listed their price, now do the gentlemanly thing and give yours. Be serious, you're prepared to pay a £500 deposit subject to viewing at this price. I'd imagine the dealer will refuse your offer, but will begin negotiations to meet somewhere in between. Of course only if this is the one for you. If not I'd not waste anyone's time and wait for the right one.

[dieselnutjob]

sorry I should have put this in the open forum

 

I have asked them a bunch of questions which they said they can't answer until next week, so I'm not being ungentlemanly; I'm waiting for their answers.

 

Also I have no intention of making the wheels their problem, in fact I recognise that it makes the car worth more. It is what what it is.  As I said I can probably flog them and get the ones I want easily enough.

 

I think Alexg is about right, but it isn't a Jag dealer so there won't be 12 month warranties etc.

 

I suspect that this will be an immaculate car but needing a cambelt and transmission oil change almost immediately which is £800 of work, so I think that £7000 would be not be an insulting offer.

[sierraman]

It sounds a lot making £1000 on a car but once you've factored in advertising, wages, preparation, repairs, business rates and the rent on the site you aren't left with a lot of margin.

[cort16]

A car like the Jag is more of a liability to sell so  CAP pricing tends to give values accordingly. Being a used car dealer is tough old game these days there's so much legislation in place, you have to deal with the general public and loads of external companies like auto trader and warranty direct are trying to bum you. 

[dieselnutjob]

I was thinking about that. I would change the cambelt myself but this would invalidate any warranty. Maybe if I buy it with just the 28 day return clauses and no warranty then maybe it's better for both the dealer and me.

[Alexg]

No, changing the cambelt yourself won't invalidate the warranty as long as any claimable fault wasn't cambelt related. So if the gearbox packs up, the warranty company will still payout, as long as the service history shows gearbox oil changes at the correct interval.

[Guest Lord Sward]

It sounds a lot making £1000 on a car but once you've factored in advertising, wages, preparation, repairs, business rates and the rent on the site you aren't left with a lot of margin.

 

 

Lets not forget the VAT within that £1,000 mark up.  See many old issues of Dealer's Diary in Car Mechanics for that old nugget.

[Braddon81]

As Alexg above has rightly stated above there are so many parameters that have to be met financially when your selling big lumps such as Jags. Yes Vat and recon and rent costs do play a big part...but also remember if you are in the trade,you do kind of get to know who and what type of people buy the sort of cars you stock.

The likelyhood of someone p/xing a very retailable Corsa or Fiesta against it with potentially quick turnaround is very unlikely...and more often than not it will be someone trying to p/x an equally large worn out old snotter...which they will still want tidy money for, and the money across the car will figure in some over allowance for that p/x figure too.

If the dealer is savvy and prepared to deal and if you do want to p/x a car its always worth asking them the absolute price to change thats agreeable and if they are willing to write the figures back in their books...potentially some of the money they save in Vat from that could be figured in the deal.

[PhilA]

When I've bought a car from a dealership, it's usually with a saleable PX and I don't usually haggle over the screen price. Instead the discussion turns to useful things that do not get added into the price such as extended warranty and the like. Usually that is something they're willing to gamble on because it'll cost them nothing if nothing goes wrong..

 

My folks recently turned up at a garage to buy a car with 2 cars in for PX... Forecourt ready Peugeot 107 and a really nicely cared for '99 A4 quattro turbo sport that was good for either one of the lads out back or auction. They didn't argue over screen price, instead asked for couple of fairly big stone chips be taken care of and a coat of protectant stuff be added. Happy handshakes, dealer has made their cut, punters have a car they're happy with and don't feel like the business transaction they just completed reamed them too hard and will probably recommend the dealership whilst they are in the honeymoon phase of the new car.

 

I fail to see what's wrong with business undertaken like that tbh.

 

After all, it could be a cut and shut from some grunting Gumtree seller who is after just as much in terms of profit...

 

 

Phil

[sierraman]

A lot of people have the perception they'll be ripped off going to a trader, in actual fact I'd say it's less likely. The law isn't on their side if they sell a bag of shit. I've been to see loads of cars private where they've tried pulling the wool over people's eyes with obvious faults they've tried hiding.

[dieselnutjob]

I have come to the conclusion that most people only sell (or px) a car when something goes wrong with it.

 

The trick when looking at used cars is figuring out what that thing is.

[Pillock]

Genuine thoughts, not a dig at anyone - why do we go out to buy a car with haggling in mind, but never haggle anywhere else?

Nobody has ever turned up to Tesco, loaded their shopping, and then said "Yeah but I mean, is a Pot Noodle really worth £1? I'll give you 85p" and so on through their whole trolley. Or "I really wanted cheddar, but you've only got red leicester so I'll take it if you knock some cash off".

 

Even in my line of work selling electronics, people sometimes try it - more as a last ditch attempt - but it never sticks. "Oh, yeah, I'll take this £800 TV - don't suppose you'll take £700 for it will you? Hahahaha no thought not, oh well" is the usual process. 

 

In this case, the dealer is not unreasonable asking so much..... maybe he paid a little over the odds for it but it's entirely his decision what to put it up for, if you don't like it find another. If you can't find another, maybe it's the right price after all.....! If he's not making money there's no point running a business, if all dealers sold at cost price then they'd all shut up shop - and then there's nowhere to buy and sell cars without chancing it with twatty private sellers.

[Pillock]

I have, I paid the price asked for everything. Did I do bad?

 

Actually I tell a lie, I was working in a Hilton so just stole most stuff I needed like fruit, water, nuts, slippers.