Trade in assessment, may be of some help for some people:

Clare_Guy

MYOB wrote: »

Utterly pointless and pedantic post; and most likely wrong - 13.5% VAT most likely applies in this case.

I questioned whether it costs €150 for a garage to valet a car.

A dealer tried to prove it did by quoting €100 + VAT which at the maximum rate of VAT is 20% less than €150 so THAT'S NOT WRONG. At the reduced rate of 13.5% it's 25% less than €150.

L-M

Clare_Guy wrote: »

I questioned whether it costs €150 for a garage to valet a car.

A dealer tried to prove it did by quoting €100 + VAT which at the maximum rate of VAT is 20% less than €150 so THAT'S NOT WRONG. At the reduced rate of 13.5% it's 25% less than €150.

It doesn't matter, it was a rough idea like everything origionally posted. Our house charges and warranty charge are more, but i can imagine the OP has a good average price.

Clare_Guy

Limerick-man wrote: »

It doesn't matter, it was a rough idea like everything origionally posted. Our house charges and warranty charge are more, but i can imagine the OP has a good average price.

House and warranty charges are notional figures invented by the dealer principle/owner to make the sales persons commission less...

L-M

Clare_Guy wrote: »

House and warranty charges are notional figures invented by the dealer principle/owner to make the sales persons commission less...

What are u talking about? They aren't there to make the sales persons commision less, they are there for a reason. Have u ever had any experience with a car dealership? Ever?

Clare_Guy

Limerick-man wrote: »

What are u talking about? They aren't there to make the sales persons commision less, they are there for a reason. Have u ever had any experience with a car dealership? Ever?

Salesmen get commission on the profit a car generates. Correct?

-Chris-

Clare_Guy wrote: »

House and warranty charges are notional figures invented by the dealer principle/owner to make the sales persons commission less...

Limerick-man wrote: »

What are u talking about? They aren't there to make the sales persons commision less, they are there for a reason. Have u ever had any experience with a car dealership? Ever?

I, for one, am glad that there's house and warranty charges, because the alternative would be that I'd get paid commission on the entire "profit", but if the gearbox failed the garage would be within their rights to ask me to contribute 10% (notional commission percentage) of the costs to fixing it.

-Chris-

Clare_Guy wrote: »

Salesmen get commission on the profit a car generates. Correct?

Profit after costs, absolutely correct. What's the point?

L-M

Clare_Guy wrote: »

Salesmen get commission on the profit a car generates. Correct?

Correct, and lets just say if there is a tight margin on the vehicle. The car sells on a straight deal, with minimal profit. So the salesman makes his money and the dealer principal makes no money? I think if i owned a business i would want to guarantee myself a bit of every pie that comes through my business.

L-M

AudiChris wrote: »

I, for one, am glad that there's house and warranty charges, because the alternative would be that I'd get paid commission on the entire "profit", but if the gearbox failed the garage would be within their rights to ask me to contribute 10% (notional commission percentage) of the costs to fixing it.

+1

Lol but if a gearbox went i don't think €250 yo yo's would cover it. Although u have ur point, re enforcing the fact, Clare-guy, that there is a reason for it.

Clare_Guy

Limerick-man wrote: »

Correct, and lets just say if there is a tight margin on the vehicle. The car sells on a straight deal, with minimal profit. So the salesman makes his money and the dealer principal makes no money? I think if i owned a business i would want to guarantee myself a bit of every pie that comes through my business.

So the dealer principle/owner "informs" his salespeople of these "charges" that come out BEFORE the profit is calculated. Seems pretty obvious to me... :rolleyes:

L-M

Clare_Guy wrote: »

So the dealer principle/owner "informs" his salespeople of these "charges" that come out BEFORE the profit is calculated. Seems pretty obvious to me... :rolleyes:

If own establish a business, u don't do so to make money for other people. U do it to make money for yourself in what ever way that may be. I can't imagine dealer principals being charity cases.

Clare_Guy

Limerick-man wrote: »

If own establish a business, u don't do so to make money for other people. U do it to make money for yourself in what ever way that may be. I can't imagine dealer principals being charity cases.

That's not my point. My point is they're notional prices based on what a consumer would have to pay (but do not reflect the true costs incurred by the dealer) that are used by the dealer to increase his share of the profit generated by the car and as a result reduce the salesperson's share.

-Chris-

Clare_Guy wrote: »

So the dealer principle/owner "informs" his salespeople of these "charges" that come out BEFORE the profit is calculated. Seems pretty obvious to me... :rolleyes:

Clare_Guy wrote: »

...used by the dealer to increase his share of the profit generated by the car and as a result reduce the salesperson's share.

If I own a newsagent and buy in Mars bars for 50c each, and then sell them for €1 each, I make 50c profit on each Mars bar, right?

But after light, heat, pilferage, staffing costs, rent, insurance (etc. etc. I could go on) the profit per Mars bar is considerably lower.


As a salesperson, you accept that the garage will take a house charge on each car before they calculate your washout/commission, just as you accept that:
they'll foot the bill if the car has to be bought back
they'll foot the bill if we need to some goodwill non-warranty work
they'll pay your wages even if you don't sell a car this week.
they'll never ask you to dewax or prep a new car as they've hired valeters to do it
they'll never ask you to fix your own PC or buy your own desk because they employ support staff to do that for you
they'll never ask you to chip-in for rent because we didn't sell enough cars this month
(again, I could go on)

They've taken the risk and need to cover their fixed costs, we're grown-ups and we accept that and get on with trying to sell cars in a profitable and fair manner.
If we've no issue with house charges, why on earth would it bother you so much??

daveharnett

Clare Guy, if you sincerely believe your point why aren't you running a dealership instead of complaining to these guys?

I have no internal experience with the car industry, but my experiences with all sorts of businesses tells me that just about everything costs more than the man on the street would guess.

Yes, some of the services described could be provided cheaper by a more efficient business, but the fact is that no SME i have ever been involved with is 100% efficient. Would you rather buy your cars from the ryanair/aldi/tkmaxx of dealerships?

Zube

AudiChris wrote: »

If we've no issue with house charges, why on earth would it bother you so much??

It fits in with his preconceptions: anyone making a profit is a thief, which is an old Irish tradition from the days of the landlord and the gombeen man.

Clare_Guy

Zube wrote: »

It fits in with his preconceptions: anyone making a profit is a thief, which is an old Irish tradition from the days of the landlord and the gombeen man.

you don't know anything about my "preconceptions" i have several businesses. if you don't understand a debate, stay out of it.

Clare_Guy

daveharnett wrote: »

Clare Guy, if you sincerely believe your point why aren't you running a dealership instead of complaining to these guys?

I have no internal experience with the car industry, but my experiences with all sorts of businesses tells me that just about everything costs more than the man on the street would guess.

Yes, some of the services described could be provided cheaper by a more efficient business, but the fact is that no SME i have ever been involved with is 100% efficient. Would you rather buy your cars from the ryanair/aldi/tkmaxx of dealerships?

i believe my point but the problem is, you don't even know what my point is! go try and tell me what my point is?

Clare_Guy

AudiChris wrote: »

If I own a newsagent and buy in Mars bars for 50c each, and then sell them for €1 each, I make 50c profit on each Mars bar, right?

But after light, heat, pilferage, staffing costs, rent, insurance (etc. etc. I could go on) the profit per Mars bar is considerably lower.


As a salesperson, you accept that the garage will take a house charge on each car before they calculate your washout/commission, just as you accept that:
they'll foot the bill if the car has to be bought back
they'll foot the bill if we need to some goodwill non-warranty work
they'll pay your wages even if you don't sell a car this week.
they'll never ask you to dewax or prep a new car as they've hired valeters to do it
they'll never ask you to fix your own PC or buy your own desk because they employ support staff to do that for you
they'll never ask you to chip-in for rent because we didn't sell enough cars this month
(again, I could go on)

They've taken the risk and need to cover their fixed costs, we're grown-ups and we accept that and get on with trying to sell cars in a profitable and fair manner.
If we've no issue with house charges, why on earth would it bother you so much??

are you serious? ALL of my posts in this thread have been about my "issues" with the charges quoted by the OP. They're notional figures that are of NO use to consumers. The "insider" info provided by the OP is rubbish. It suits the rest of you car sales people to defend them coz it confirms what your boss has told you...

-Chris-

Clare_Guy wrote: »

i believe my point but the problem is, you don't even know what my point is! go try and tell me what my point is?

Clare_Guy wrote: »

are you serious? ALL of my posts in this thread have been about my "issues" with the charges quoted by the OP. They're notional figures that are of NO use to consumers.

...and you've just answered your own post.

Also, your first post in this thread

Clare_Guy wrote: »

...personally i think those figures are bullcrap!!...

would have given the game away

Clare_Guy wrote: »

The "insider" info provided by the OP is rubbish. It suits the rest of you car sales people to defend them coz it confirms what your boss has told you...

I agree with the OP's post even if my figures don't agree with his.

As I understand it the OP was trying to give the members of the Motors forum, a lot of whom are here looking for information before buying or trading-in a car, an insight into the workings of how a garage values their car.
For a salesperson giving a trade-in value it's not a mystical science, it's not a secret way to rip people off, it's merely giving a trade-in value that's cognisant of the elements that need to be put in place before the trade-in hits the forecourt.

You're more content with arguing whether a valet costs €121 or €150 and whether the dealer is ripping the punter off or ripping the punter and salesperson off (through sneaky house charges).

It suits me to see posts like the OP's because it brings this information to light and starts discussion on it. I get more feedback here than I would asking people about it directly because people are more open on boards because of it's relative anonymity.

I don't give a crap about what my boss told me - if I felt I was being treated unfairly, I'd change job.

gabgab

Clare_Guy wrote: »

you don't know anything about my "preconceptions" i have several businesses. if you don't understand a debate, stay out of it.

Hey Clareguy,

What kind of business do you run? Can you give me a general idea, not specifics. Just a ballpark of

No. of employees
Turnover
Gross and Net Profit
Is it a product or service

The reason I ask is that for someone that runs several business's (?) You have a very simplistic approach to costings and profit,

I do agree that the house charge may be difficult to swallow, but lets be fair do you know, in this situation lets say:
What the average warranty bill is on all 100 used cars sold in a one year period?
The amount of chargeable workshop hours lost by the service manager through non routine and warranty work resulting from used cars?

I am not defending either side, I am genuinely curious as to whether you have a idea?

-Chris-

Fair question...

Darragh29

gabgab wrote: »

Unprofessional and not conscious of costs, he has to be able to recondition that car and turn it around into profit, if he has not inspected the car properly then he will not of inspected any properly. Be wary of purchasing used stock from people that operate like this,

If your car is in above average condition then it should fetch above average prices, where this becomes a problem is:
Where is the average? In terms of your car and the price it is making back once sold
Also just how far above in terms of condition is your car, and how much in monetary terms is that worth?

Has it just been serviced, with good decent tires, a long NCT, a full service history, free from cosmetic and structural damage and little money needed to turn it around into a retail car? If so drop me a PM, I will happily point you in the right direction,

I've a good friend who recently got a written warning for not test driving a customers car that was being traded in, after the boss saw him walking around the var but not getting into it and test driving it.

-Chris-

Darragh29 wrote: »

I've a good friend who recently got a written warning for not test driving a customers car that was being traded in, after the boss saw him walking around the var but not getting into it and test driving it.

Absolutely. I'd get given out to for not driving a car (sternly given out to), and if a car came in with a mechanical problem and I admitted I hadn't driven it, I'd be strung up!

Darragh29

AudiChris wrote: »

Absolutely. I'd get given out to for not driving a car (sternly given out to), and if a car came in with a mechanical problem and I admitted I hadn't driven it, I'd be strung up!

That exact same thing happened my mate! He took a car in with an engine fault light on and he didn't cop it at the time but it turned out the turbo was gone so he is paying out of his own pocket for cleaning up the situation, I don't think the boss knows about that though, he is taking the hit on the job to basically return the situation to one where the car came in without a turbo problem! The alternative is that he could lose his job or keep his job and have the money taken out of his wages and also lose major credibilty and have the boss looking over his shoulder for the next two years so he reckons it's better for everyone if he deals with it this way...

Keith C

AudiChris wrote: »

Fair question...

+1

My popcorn is going cold waiting for the reply

L-M

Keith C wrote: »

+1

My popcorn is going cold waiting for the reply

+2

knifey_spoonie

For a lad who can write 8 posts in an hour this last one is taking a while.

With regards to you arguement about costs, where to start

Firstly any dealership worth is salt will have three departments, 1 sales 2 service 3 stores
At the end of each month each of these department will have to turn a profit, you have to think of it as 3 different business under the one roof, Its a case of the service dept. trying to get as much out of the sales dept. the parts trying the same with the service

So your idea of getting everything for nothing is carzy

Its costs the sales Dept. the very same to get a service (Prob. more) that the members of the public, the same for a valet and so on

Each department must prove it salt and show itself profitable, that aint possible if they give away their service's is it now??

As for the cost of the house charge getting you all confussed, Well here we go

Light & Heat 30k
Rates 5k
Water Charges 2k
Warrenty Comebacks 15K
Phones 7k
Misc 5k
Advertising 50k

Total 114k

These are all costs have to be covered with the house charge( Which are probally under estimated)

Finally if you can show me any other business with a turnpover of 20Million plus that only turns 1% profit, I will post up Pics of me eating my hat

mickdw

Example:

I buy a new car. 55000 retail.
I get offered 13000 trade in.
Thats 42000 less bargaining to change.

I sell my car for 15000 private
and then im offered a straight sale price of less than 52,000 plus bargaining
Thats 37000 to change. Thats five grand instantly for the garage if i trade in.
Servicing, reconditioning & warranty costs on my trade in will be covered by the even higher resale cost the garage will get for my car compared to a private sale.
Not to forget the profits they would have on the straight sale price also.

-Chris-

mickdw wrote: »

Example:

I buy a new car. 55000 retail.
I get offered 13000 trade in.
Thats 42000 less bargaining to change.

I sell my car for 15000 private
and then im offered a straight sale price of less than 52,000 plus bargaining
Thats 37000 to change. Thats five grand instantly for the garage if i trade in.
Servicing, reconditioning & warranty costs on my trade in will be covered by the even higher resale cost the garage will get for my car compared to a private sale.
Not to forget the profits they would have on the straight sale price also.

If you're offered 13,000 for a trade-in, it's probably worth 11,000 to the trade. The other 2k is made up of overallowance (or discount).
That won't hit a forecourt for €15k, I'd be surprised if you could sell it for that.

But if you do, the dealer will give you the €2k discount off the new car, so you're up by the difference between the trade value and what you sell the car for privately.

Profit is your reward for taking risk.

Here's where the dealer's taking costs that you aren't:
You've sold your car from your driveway (you haven't had to pay for a forecourt or portacabin or public insurance)
You've cleaned the car and NCT'd it yourself and put in the half-tank of fuel (you haven't had to pay valeters or mechanics)
You haven't offered test-drives - covered by your insurance
You haven't offered a warranty.
etc. etc.

Here's where you're taking the risk:
Stocking time

If you can't sell your car in time at the price you want, you'll have to pay two car loans or you'll have to "price it to sell". Possibly you'll have to defer/cancel your new car order because you haven't sold your car.
Part of a dealer's business is stocking and selling cars, not the same for private sellers.
If you're selling a car that's become less desirable since you ordered your new car (for example, the arse has fallen out of the Touareg market very recently), you may have to drop your price considerably to move it.


And no one will argue that the more time you spend prep'ing your car for sale the more likely you'll get a good price on your car, so by selling the car privately and doing all the work and taking all the risk, of course you're entitled to the profit instead of the dealer.

If you're looking to buy a car from me and you decide to sell your car privately and do a straight deal, I wouldn't begrudge you the reduced cost-to-change because you're putting in the effort and taking the risk and therefore deserve the reward.
If you're trading in to us and we're taking the risks and investing in your trade-in to make it forecourt-worthy, I hope you'd be equally magnanimous...

gabgab

mickdw wrote: »

Example:

I buy a new car. 55000 retail.
I get offered 13000 trade in.
Thats 42000 less bargaining to change.

I sell my car for 15000 private
and then im offered a straight sale price of less than 52,000 plus bargaining
Thats 37000 to change. Thats five grand instantly for the garage if i trade in.
Servicing, reconditioning & warranty costs on my trade in will be covered by the even higher resale cost the garage will get for my car compared to a private sale.
Not to forget the profits they would have on the straight sale price also.

Fair and valid points, however;

It is quiete unlikely if you are offered €13,000 as a trade in figure that you will sell it for €15,000 privately yourself, not impossible but also not likely.

And again it is the argument that comes up time and time again, but customers choose to ignore. Business's that do something day in day out have costs that need to be covered, and from what I have seen very few people have a decent understanding of what costs are actually involved and what in totality the amount to.

When you have done this, sold your car privatley, will you go and look at new cars? Yes.

Will you expect the following:
The cars to be clean (valetors and twice weekly washing excluding initial extensive valet)
The cars to be fueled, allowing a decent test drive (fuel, garage insurance policy)
Time to be taken with you (decent numbers of staff to allow adequate and prompt dealings with you the valuable customer)
Opening hours that suit you (staff available, as a result longer hours, increased wages)
Contactable member of the sales team with a personal touch (company paid for mobile phone)
Clean, well maintained, spacious, facilities, with customer parking, toilets, tea, coffee, (premises, light heat etc,
Then if you are going to deal, particularly with a straight deal, a percentage discount,

This thread is not a them and us argument, it is merely to try and answer questions, and to highlight to customers that all the things that they expect when going to buy a car, come at a large cost to a garage. The garage is a business and needs to make a profit,

People as a rule get emotionally attached to their cars, and nearly always have a over inflated perception of what the car is worth without the knowledge or expertise to understand what it is realistically worth to a business that has to make a profit.


So, the car that someone offered you €13,000 but you reckon you can get €15,000 for, what research has brought you to this conclusion? Have you successfully done this in the past, ahcieved in a private sale 15,000 when offered 13,000

And can you see based on the original post, how if this is the case for you selling your car on the side of the street, we as a business with overheads cannot offer you the same?