How much longer before dealers realise we aren't all suckers?

-Chris-

Nobody knows m4j, my boss has been in the motor industry for 30 years, and he wouldn't even venture to tell you what's going to happen in the next 12 months.

It's not about the cars, it's about consumer psychology. Maybe when the Q7 becomes more expensive, the pre-July Q7s will be worth more, maybe once people get used to being focussed on emissions, the Q7 will be viewed as a bohemoth and will be worth less.
If a car drops in price when new, it'll affect the second hand car values - why buy the old one when you can buy a new one for nearly the same price? If your second hand is a good few years old, how much should it be affected?

No right answers to this, and you're a perfect example of the thought processes that everyone's going through. Buy what you think is value, wait if you're not comfortable. Loads of people will benefit hugely by waiting until July for the new prices, plenty of people have found that, by waiting, their cost to change has increased.

In your brother's case, I'd guess their jeep will go up in price and road tax after July, and so if he really wanted the jeep, then pre-July was the best time to buy.

m4j

Audichris, Thank you so much, this is one of the most comprehensive and helpful responses I think I have ever received, you clearly speak with both experience and understanding and I couldn't ask for more.

We will search around and compare, compare, compare then try and arrange as best a deal as possible. It seems su easy on the 'KING of CARS', Ha Ha

Thanks again for your time and consideration.

Warm regards

ninty9er

RedorDead wrote: »

Theres a lot of businesses that will go close to the wall over this though.

Ive heard of some dealers writing down old stock by between €550,000 and €700,000 due to the falling prices.

Whatever business you are in, thats a bitter pill to swallow. And whatever people may think, dealers are not making the huge profits everyone might think they are.

Losses aren't the end of the world....when you start to run short on cash it's time to worry. and since none of the cars ARE cash, but will BECOME cash once sold at whatever price, then the market will eventually settle and all will return to normal.

--amadeus--

ninty9er wrote: »

Losses aren't the end of the world....when you start to run short on cash it's time to worry. and since none of the cars ARE cash, but will BECOME cash once sold at whatever price, then the market will eventually settle and all will return to normal.

They aren't cash they are business assets (stock) and are currently rapidly depreciating assets. Those cars on a forecourt weren't free and there comes a price point where it's almost not worth selling the car as you'd be doing so at a loss.

I take your point about cash but the cost of doing business (mainly wages & showroom in this case) hasn't dropped despite a huge fall in revenue so I would imagine that a few dealers are feeling a lot of pain at the moment. Not that it's any harm - it's been a cozy cartel for a long time and customer service has been diabolical because of it. Tighter margins might mean that they have to work a bit harder at making customes happy

E92

Stock is the worst asset possible to have for a variety of reasons(it can date very fast, peoples' buying habits can change etc)... it's as good as nothing really.

The current situation is proof that ultimately the consumer is king and only by our actions can things change. Bitching about dealers and the Government for not doing anything here is the lazy option and avoiding that fact that you're too lazy to try and change things and want an excuse to blame somebody - just walk away and take your business else where if you're not happy.

-Chris-

m4j wrote: »

Audichris, Thank you so much, this is one of the most comprehensive and helpful responses I think I have ever received, you clearly speak with both experience and understanding and I couldn't ask for more.

We will search around and compare, compare, compare then try and arrange as best a deal as possible. It seems su easy on the 'KING of CARS', Ha Ha

Thanks again for your time and consideration.

Warm regards

No problem. Reading back on my post, it seems accurate, but distinctly wishy-washy, I don't mean to fence-sit.

The most important thing in all this is buyer's remorse. If you can find a car that you really like, that seems like it's a fair price compared to other cars around and that fits your needs well, then buy it! Once you've bought it, don't look back. Don't look at carzone.ie and wonder about the bargains that you could have had.

I've bought several PCs in my life. If I'd have waited until the fastest/best one came out (as I wanted to), I still wouldn't have bought by now - something faster/better is always around the corner.

This market will paralyse us all if we're not careful. Buy what you need to be comfortable. Don't splurge, don't panic, don't regret.

ninty9er wrote: »

Losses aren't the end of the world....when you start to run short on cash it's time to worry. and since none of the cars ARE cash, but will BECOME cash once sold at whatever price, then the market will eventually settle and all will return to normal.

This is easy to say, but in terms of your budget and cash-flow predictions, this year has held some serious surprises for garage owners. Don't forget, if I can normally give €2,000 discount and my boss turns around and says "Chris, times are tough and we need to move some stock, give €5,000 discount", that's costing him €3,000 "out of his pocket" per car.

I understand that there's no reward without risk, I understand that €2,000 is better than nothing, but when there's people running businesses and planning their children's education/mortgage payments/employee's salaries based on €5k, and now there's only €2k - losses may well be "the end of the world"...

Zube

AudiChris wrote: »

if I can normally give €2,000 discount and my boss turns around and says "Chris, times are tough and we need to move some stock, give €5,000 discount", that's costing him €3,000 "out of his pocket" per car.

Sorry Chris, but that just makes me think that he was pocketing that 3 grand. Back in 1987, when the new reg system came in, the highest reg in Dublin was in the 30s, something like 37000. It's three times that today, but the number of dealers has gone down.

Dealers have been cleaning up: look at all the glass and marble palaces built in the last 10 years instead of backstreet portakabins...

No way does anyone here feel sorry for your boss.

buzzard

Zube,

The highest 87 reg for that year was less than 29000. I registered an import in 1991 and it was 87 D 29XXX

-Chris-

Zube wrote: »

Sorry Chris, but that just makes me think that he was pocketing that 3 grand. Back in 1987, when the new reg system came in, the highest reg in Dublin was in the 30s, something like 37000. It's three times that today, but the number of dealers has gone down.

Dealers have been cleaning up: look at all the glass and marble palaces built in the last 10 years instead of backstreet portakabins...

No way does anyone here feel sorry for your boss.

I'm not asking for anyone to feel sorry for anyone, I'm merely giving a counter-arguement to the "stealers" attitude I see around here sometimes.

By "pocketing 3 grand", he's done what the better business schools call "making a profit". We've sold a few cars this year that will show no profit, and our used dept. will show a loss on quite a few of theirs.

This is the nature of business though, and you'd hope that your business has been able to build up a warchest during the good times to help you weather the bad times.

As for the glass palaces, they haven't been built for the dealer to show off how much money he's making. They're built at the behest of the manufacturer who's trying to make sure that all the money they spend on motorsport, branding, sponsorship isn't p*ssed down the drain by the prospective customers heading to their local dealer and finding a premises that doesn't measure up to the promise of the brand image. If anything, a greedy dealer would have the portacabin and retain the profit, rather than investing millions in a glass palace and paying hundreds of thousands per years just to cover the interest repayments

pburns

AudiChris wrote: »

As for the glass palaces, they haven't been built for the dealer to show off how much money he's making. They're built at the behest of the manufacturer who's trying to make sure that all the money they spend on motorsport, branding, sponsorship isn't p*ssed down the drain by the prospective customers heading to their local dealer and finding a premises that doesn't measure up to the promise of the brand image. If anything, a greedy dealer would have the portacabin and retain the profit, rather than investing millions in a glass palace and paying hundreds of thousands per years just to cover the interest repayments

This has always been a bit of a bugbear of mine...

I don't think the whole 'glass palace' look is necessary. In a lot of cases it replaced an older brick building which, if painted and tiled properly, should sufficently satisfy any marketing/brand-image bull****.

As it is all the garages look the same whether it's Audi or Ford or whoever. I'm sure some construction company made a fortune specialising in this niche back in the early noughties and I'd wager in 12-15 years time it'll all starting to look very dated.

I was in the McLaren Technology Centre in Woking last year (Norman Foster design etc.) and I swear to God the front display area where they have the the key F1 & road cars isn't any more impressive than my local Audi dealership (well apart from the artifical lake outside:D).

Waste of money. I seek out the guys who aren't paying hundreds of grand each year in repayments. You get better value and meet more knowledgable salesmen.

copacetic

pburns wrote: »

Waste of money. I seek out the guys who aren't paying hundreds of grand each year in repayments. You get better value and meet more knowledgable salesmen.

I think the point is that you won't be able to 'seek' out such a person as they won't have a franchise to sell new cars. To keep a franchise for a big marque you have to have the style of premises they want..

pburns

copacetic wrote: »

I think the point is that you won't be able to 'seek' out such a person as they won't have a franchise to sell new cars. To keep a franchise for a big marque you have to have the style of premises they want..

Yes what but I'm saying is that the stipulation for this type of premises, as imposed by the manufacturer/importer is a load of bollocks. And besides, I know plenty of garages (Toyota, Mazda, Subaru, Volvo) with franchises that seem not to have been obliged to follow this particular route. I'm sure if a specific garage is a good performer (sales-wise) the importer won't bust his balls.

If your main target market is comprised of the 'fashion-victim' demographic - (Mini/BMW, Audi, VW etc.) I guess you'll have to have all the plate-glass/play-area/coffee-dock bull****...

-Chris-

copacetic wrote: »

There are 30 or 40 BMW 3 series 07 on carzone on dealers forecourts at 2 or 3k more that the will be new in July with 5k less equipment than the edition model. Nearly every car is about 10k overpriced...

...I really laugh when you hear everyone saying how the forecourts are full of second hand cars that won't shift, no wonder, a lot of them are 20 or 30% overpriced!

Think I am going to have to sit this one out until the all realise they can't try and fool us all...

I realise that this survey was carried out on behalf of the SIMI, but if it's vaguely accurate, then it casts the entire premise of "dealers aren't dropping their prices in response to lack of demand" in doubt.

http://www.independent.ie/national-news/used-car-prices-fall-15pc-ahead-of-change-in-vrt-law-1417841.html

Any thoughts?

m4j

Removed as requested to start on a New Thread, Anyone that can give some advice to this I would appreciate your insights.

Sorry didn't realise I had moved off the topic.

Regards

copacetic

AudiChris wrote: »

I realise that this survey was carried out on behalf of the SIMI, but if it's vaguely accurate, then it casts the entire premise of "dealers aren't dropping their prices in response to lack of demand" in doubt.

http://www.independent.ie/national-news/used-car-prices-fall-15pc-ahead-of-change-in-vrt-law-1417841.html

Any thoughts?

I wasn't saying lack of demand should make them drop them Chris, I was saying simple maths should. As you say it is a SIMI survey and obviously they wouldn't release it if it didn't make them look good. It covers presumably all cars whether going up or down.

My complaint was dealers ignoring the July price of cars when pricing used ones. For instance there are a whole fleet (at least 10)of old model A4 1.9TDIs on carzone for 41k each, heres one of them:
http://www.carzone.ie/used-cars/Audi/A4/1.9TDI-115bhp/276871/

Currently in the the new model the 1.9TDI has been replaced by the 2.0TDI 120, a newer smoother engine. How much is the new model in July?
35,100!

So an audi dealer is trying to find 10 suckers who will part with 6k more for an old model than a brand new one.

Each one of those cars is at least 10k overpriced, probably more like 15k. There is no way any one of them is worth more than 30k imo and even then, only if you were nuts.

As mentioned in the first post it isn't just audi, there are 100s of examples from BMW, Lexus and Mercedes too.

peasant

m4j wrote: »

Hi,

Audichris I did not consider your kind response to be one of you sitting on the fence.

We looked today and found two cars that we thought to be possible runners but would welcome any advice.

etc, p.p.

m4j

Please open your own thread for this ...it has nothing to do with the topic at hand.

Thanks

jeepers101

I've just spent two hours trying to find a link that'll let me start a new thread. What am I missing?

colm_mcm

jeepers101 wrote: »

I've just spent two hours trying to find a link that'll let me start a new thread. What am I missing?

one of these?



top of the Motors page.

copacetic

jeepers101 wrote: »

I've just spent two hours trying to find a link that'll let me start a new thread. What am I missing?

brain cells? Button is toward the top left of every forum.

colm_mcm

Welcome to Boards etc



Jaysus, way to go completely off topic!

E92

LOL!

Lord Nikon

I would just like to comment on something. Dealers were always notorious for giving people feck all money for there trade ins, and going ahead and selling these cars at twice that. They also charge more for basic services and parts that spurious parts would cost a lot less, and work the same way.

People who have the cash and are somewhat ignorant when it comes to how much stuff costs buy premium brands, ie. Mercedes-Benz, BMW, Lexus, Audi & Porsche. Dealers do there servicing, they dont go shopping around for Indy Specialists, and dealers make a lot of cash of these people. Feck all of a trade in they get for there 100k+ motor, but no bothers to them, there have loads of cash.

colm_mcm

Are you saying main dealers should use spurious parts?

Re: car sales: you're forgetting that a trade in price, what a dealer asks for that trade in on carzone, and what they actually get are 3 completely different figures. If garages all got their asking prices, they'd be doing very well.

Lord Nikon

Not by much, but like any business squeezing money out of the customer is number one.

-Chris-

colm_mcm wrote: »

Are you saying main dealers should use spurious parts?

Re: car sales: you're forgetting that a trade in price, what a dealer asks for that trade in on carzone, and what they actually get are 3 completely different figures. If garages all got their asking prices, they'd be doing very well.

+1

By your logic neuromancer, every dealer offers 10k for the trade in and then sells if for 20k. Noone notices or says anything. There's no competition that would persuade any competitor dealer to offer 11K as it won't give them the 100% profit margin they need.

Official parts are more expensive and made to a tighter threshold than the spurious parts. Ask anyone who works with electronics, you can buy cheaper parts, but you can't stand over the results when you do.

Second hand values are set by the buyers, not the sellers. You can ask for whatever money you want for a car, but you'll only get what someone will pay for it...

Lord Nikon

How close is the trade in price for your car, compared to a similar used car on their lot, not near it at all.

Now compare the price of a private seller motor with a dealer used motor, how can they justify that price, with what a 6 month warranty, yeah right.

Spurious parts to genuine parts, okay that was a bad example, but labour costs for premium dealers is high, as the guy with the 730 can show.

NOW it's a buyers market, but it wasn't before.

copacetic

neuromancer has totally brought the thread off track there guys, chris what about the example of the A4 I gave above.

-Chris-

Sorry copacetic, I didn't feel the need to reply to your comment, I presumed someone would jump in...

Noone in their right minds would buy those cars.

You'll see them still there next month, and hopefully someone with a little sense will have dropped the price.

Last 1.9TDi we sold, we made a significant loss on, afaik. We had it listed for very high-30s (based on an early 40s list price), then the new model came out with the new pricing and we had to drop it to sub-30k to get it to move.

The buyer got a very good deal and a lot of car for 30k, we moved some stock that would have been even harder to move if we made that decision to change the price in a few months. All a part of business.

-Chris-

Look at this car:

http://www.carzone.ie/used-cars/Audi/A4/1.9-TDI/1020243/

They've dropped it 5k and it's still too expensive. That car's in stock and onsite, so they've already been invoiced for it by Audi Ireland. They've got their fingers crossed for a big chunk of support from Audi Germany I expect.

Everyone's got a boss, including the Brand Managers of these garages. They're going to have to walk in to that boss and say, "I ordered 10 1.9TDis speculatively, thinking they'd still be in demand because the new A4 was 2.0TDi only. I wasn't aware a 120bhp was coming out, and I didn't know it would cost mid-30s. I now have to sell those 10 1.9TDis for a 10k loss (aka, I just lost our dealership 100k through circumstances waaaaay outside my control)."

If you were in that position, how quick would you be to walk into the office and have that conversation with your boss?

E92

Audi dealers were given provisional July pricing in back in February AFAIK.

Ordering an old model when you know a new one is on the way is absolutely crazy IMO irrespective of whether or not these July changes were happening.

Of course if that B7 is unreg'd then it can sell for less in July at no cost to the dealer because VRT is only paid on the date of sale.

I really can't believe that you guys don't know what's coming down the line. The manufacturers should be telling ye this stuff. I don't know why they don't if they don't. I don't expect them to tell ye what the competition is up to but I do expect them to give the the inside track on yer own products at the very least. Ye can't possibly make the most appropriate decision if ye're not told about what's coming up. Ye certainly shouldn't be blamed for making the wrong decisions if ye're not given the correct information.

Did you know that the smallest engine for the facelifted A6 will be a 1.8? Did you know that it will have 160 bhp, and the 2.0 TFSI and 2.4 have been axed, while the 2.0 TDI(which will at last be common rail) will be in 2 states of tune: 140 bhp and 170 bhp?