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

gabgab

Limerick-man wrote: »

Could of phrased it better, but you get where i'm coming from.

I do of course,

All I want is for Darragh to explain to me how I acquire the car in the example for €8,500. If he can do it well, and convincingly, I will get him a damn good and profitable job

L-M

Working minds........

Darragh29

gabgab wrote: »

House charge,
Warranty Charge,
Valet,

Then bear in mind Vat, and where is the profit at now?

This is the same old discussion, and it goes round and round, I outlined the costs involved, and you have ignored a number of them.

Also how did I acquire the car for that price, sure you came into me with it and can see that they are asking 11,950 for a similar car.

How do I acquire that exact car, for €8,500

If your service dept cannot fully service and fully valet a car for 300 Euro, then you have a problem. A "house charge", WTF is that??? Warranty, grand, what figure to you want to put on that??? Don't forget, and you have been shy mentioning this here, that a service dept will not charge the showroom retail labour rates. Typically a service dept will charge a discounted labour rate for inhouse work...

L-M

Darragh29 wrote: »

Typically a service dept will charge a discounted labour rate for inhouse work...

Why would they, when they can have customers in, for the same labour hours paying more? Labour is labour, sin é

Darragh29

gabgab wrote: »

I do of course,

All I want is for Darragh to explain to me how I acquire the car in the example for €8,500. If he can do it well, and convincingly, I will get him a damn good and profitable job

Here's the question, what are you acquiring it for!?!?! If you put the cost to you at 9 grand or 9,500 Euro , the point remains the same, "che-cheng"!!! If you are on top of your game with your servicing, then you don't really have warranty issues, and when you do get something coming back for an ECU, Gearbox or Turbo, I know main dealers have come up with ways of getting the manufacturer to carry the can for this...

gabgab

Darragh29 wrote: »

If your service dept cannot fully service and fully valet a car for 300 Euro, then you have a problem. A "house charge", WTF is that??? Warranty, grand, what figure to you want to put on that??? Don't forget, and you have been shy mentioning this here, that a service dept will not charge the showroom retail labour rates. Typically a service dept will charge a discounted labour rate for inhouse work...

Its all in the first post regarding charges,

The in house versus outsourced work debate has been hammered at this stage, we do not get favourable rates. They are stand alone departments and the service manager is:
Not going to have ramps occupied at a lesser hourly rate than he can bill out to the public just to help the service department
It is skilled work, at the end of the year the service department has to account for its profit margin just like anyone else,

If you can back up your assumption with facts I would love to see it,

Also, my retail asking price car of €11,950, how do I acquire it for €8,500

Thanks,

Gab

gabgab

Darragh29 wrote: »

Here's the question, what are you acquiring it for!?!?! If you put the cost to you at 9 grand or 9,500 Euro , the point remains the same, "che-cheng"!!! If you are on top of your game with your servicing, then you don't really have warranty issues, and when you do get something coming back for an ECU, Gearbox or Turbo, I know main dealers have come up with ways of getting the manufacturer to carry the can for this...

Waffle waffle waffle...........

You now see that the argument you put forward does not stand up in a real world situation, or under the tiniest bit of scrutiny,

How is the point the same?

Do the sums darragh, if I acquire it for €9,500 where is my profit on that deal?
And again, how do I acquire the car for that price, €2,450 less than I am asking for a car on the forecourt or one you have seen on carzone?

Do you understand a warranty department and how it works? No

Servicing does not guarantee no warranty, you cannot service a turbo, if it goes it goes, all you can do is maintain a car as best described and hope it does not blow,

Darragh29

gabgab wrote: »

Waffle waffle waffle...........

You now see that the argument you put forward does not stand up in a real world situation, or under the tiniest bit of scrutiny,

How is the point the same?

Do the sums darragh, if I acquire it for €9,500 where is my profit on that deal?
And again, how do I acquire the car for that price, €2,450 less than I am asking for a car on the forecourt or one you have seen on carzone?

Do you understand a warranty department and how it works? No

Servicing does not guarantee no warranty, you cannot service a turbo, if it goes it goes, all you can do is maintain a car as best described and hope it does not blow,

Anything but answer the question. How much to you have to acquire it for to make a profit??? As for discounted labour rates for sales, the dog on the couch beside me here knows that sales get a different labour rate than Joe public, if your insisting that this is not the case, this is simply wrong. Hence why sales work generally gets done on a Saturday, so retail labour hours are not lost during the week to sales labour hours.

-Chris-

Darragh29 wrote: »

As for discounted labour rates for sales, the dog on the couch beside me here knows that sales get a different labour rate than Joe public,

No they don't. Not in our garage!

Darragh29 wrote: »

Hence why sales work generally gets done on a Saturday, so retail labour hours are not lost during the week to sales labour hours.

Our workshop isn't open on Saturdays. I can't think of any garage local to us who is.

gabgab

Darragh29 wrote: »

Anything but answer the question. How much to you have to acquire it for to make a profit??? As for discounted labour rates for sales, the dog on the couch beside me here knows that sales get a different labour rate than Joe public, if your insisting that this is not the case, this is simply wrong. Hence why sales work generally gets done on a Saturday, so retail labour hours are not lost during the week to sales labour hours.

Darragh,

I asked you a question regarding the scenario you posted, have a read back and find it. The question I asked, again, was based on your example how would I acquire the vehicle for €8,500.

You have not answered again,

Please show me a garage that does sales service work on a saturday, if you do I will show you 30 that do not. Do you believe that mechanics work for less on saturdays? They would get as a minimum double time, which means the job has got to cost more,

I thought you were trolling, but I dont think you are.

So if you could answer those questions I would appreciate it, otherwise stop stating that these things happen when the reality of it is that none of the points you have made can be backed up with a explanation or example.

Or ask the dog where I can get a car traded in to me for 30% less than an asking price on the forecourt,

These types of posts are the reason I would like a new thread created and locked, I am all for discusion, but I back everything I say up with proper reasoning and a real life example,

To answer your question, I need to acquire the car for:
The sale price to the customer after discount,
less all costs incurred,
less the desired profit for the garage

Deleted User

Deleted User wrote: »

http://atsearch.autotrader.co.uk/ni/cars_search.jsp?page=0&searchform=&modelexact=1&lid=search_used_cars_full&photo=1&state=block&sort=3&hassearched=Y&make=FORD&min_pr=75&source=0&model=FOCUS&max_pr=&miles=1500&agerange=7&mileage=3&postcode=ll65+1ya&variant=&bodyid=0&trim=&fuelid=1&colour=&transmissionid=0&keywords=ghia&ukcarsearch_full.x=33&ukcarsearch_full.y=16&ukcarsearch_full=SEARCH

versus

http://www.carzone.ie/usedcars/index.cfm?fuseaction=search&sortby=PriceAsc&maxrows=100&MakeID=9&ModelID=78&FuelID=1&Year_Min=2006&Year_Max=2006&GroupID=738&searchtext=1.6%20ghia


UK is cheaper even including VRT and a thousand for travel over and back

Limerick-man wrote: »

We'll exclude the UK for the time being.

Why? Im looking for a second hand car atm and am seriously considering the UK or NI as its better value, surely its relevant if its taking business away. Dealers should try and tackle this!

knifey_spoonie

Darragh29 wrote: »

the dog on the couch beside me here knows that sales get a different labour rate than Joe public

Will you ask the dog beside you where he works because id love to go into sales there, that would up my monthly income

maidhc

I must be missing something:

If I have a mechanic on a wage in my garage, what he costs me is the wage... which is far less than the labour rate I will charge a third party. The only time it is uneconomical for me to use my mechanic is if I am loosing labour from paying customers. It will make enconomical sense for me normally to pay my mechanic double time than to subcontract the work to a different garage.

I used to always assume that garages never made much profit on secondhard cars, that they were just a necessary evil to assit in the sale of far more profitable new cars, but that garages ultimately made their money from servicing.

gabgab

Still waiting on a response to the questions there Darragh,

@ Maidhc: It is rare that garages contract work out unless exceptionally busy. Even at that I do not know of many unless circumstances force it,

gabgab

Deleted User wrote: »

Why? Im looking for a second hand car atm and am seriously considering the UK or NI as its better value, surely its relevant if its taking business away. Dealers should try and tackle this!

We would, but if I offer you a trade in that is in line with uk or NI prices, you will say that I am robbing you, simple as that really

-Chris-

maidhc wrote: »

I must be missing something:

If I have a mechanic on a wage in my garage, what he costs me is the wage... which is far less than the labour rate I will charge a third party. The only time it is uneconomical for me to use my mechanic is if I am loosing labour from paying customers.

A mechanic costs you more than a wage. What about giving him a ramp and a tools allowance. Pension costs, insurance, light & heat etc. The number of fixed costs you bear will increase with the number of mechanics as you'll need a bigger premises etc. As mentioned before, you've also got a lot of support staff, from Service Advisors, receptionists, accounts dept. employees, parts staff, etc. etc.
Some will pay their own way (parts dept) and some are non-productive from an income point-of-view (accounts, receptionist etc.).

Any time you're using your mechanic for internal work you're losing out on retail work from outside customers.
That is unless your workshop is overstaffed/under-utilised and you have mechanics standing around - in that instance you'll be able to give the sales dept a reduced rate just to keep your extra mechanics busy, but if you find yourself in that situation, I'd suggest you have more fundamental problems.

maidhc wrote: »

It will make enconomical sense for me normally to pay my mechanic double time than to subcontract the work to a different garage.

Most workshops aren't open on Saturday, so this double-time argument is academic. And if our workshop was open on Saturday, I'd rather have them serving retail customers at retail rates if I'm paying the mechanics double-time.
I don't know where subcontracting the work came into the equation.

maidhc wrote: »

I used to always assume that garages never made much profit on secondhard cars, that they were just a necessary evil to assit in the sale of far more profitable new cars, but that garages ultimately made their money from servicing.

Every department should be able to show a contribution to the bottom line, from sales & service depts making profits to accounts depts optimising cashflow.

Every dept should be able to stand on it's own two legs because sometimes things happen (like now) where your used dept suddenly grinds to a halt. It's unfair however to put the future of the garage on one dept.
There's also a significant period each year (normally August and December) where the service dept will be much quieter than normal - every department is cyclical.

maidhc

AudiChris wrote: »

A mechanic costs you more than a wage. What about giving him a ramp and a tools allowance. Pension costs, insurance, light & heat etc. The number of fixed costs you bear will increase with the number of mechanics as you'll need a bigger premises etc. As mentioned before, you've also got a lot of support staff, from Service Advisors, receptionists, accounts dept. employees, parts staff, etc. etc.
Some will pay their own way (parts dept) and some are non-productive from an income point-of-view (accounts, receptionist etc.).

Exactly. The garage has fixed costs, but won't necesssarily expect to make a profit from doing work to cars which it intends to sell on, e.g. it won't expect to make a profit on a profit.

You argument about each department having to turn a profit doesn't make sense, as all that matters to the bottom line is the profit the entire business makes.

knifey_spoonie

maidhc wrote: »

You argument about each department having to turn a profit doesn't make sense, as all that matters to the bottom line is the profit the entire business makes.

It may not make sense to you but when your running a garage, thats the way it is, If you are paying your service manager upwards of 60 grand per year, you want them to show a contribution to your bottom line, you aint paying them just to book in work your paying them to generate profit, in any way they see fit.

In my experience sales works gets charged more then retail, its easier to charge sales more because they ain't seeing a breakdown of the bill at the its just being added on to the overall cost of the car

maidhc

knife_fighter wrote: »

It may not make sense to you but when your running a garage, thats the way it is, If you are paying your service manager upwards of 60 grand per year, you want them to show a contribution to your bottom line, you aint paying them just to book in work your paying them to generate profit, in any way they see fit.

In my experience sales works gets charged more then retail, its easier to charge sales more because they ain't seeing a breakdown of the bill at the its just being added on to the overall cost of the car

That sounds weird and not like any other business I have ever been involved in.

Some departments should not make a profit, but ultimately add to the bottom line through increased sales, repeat busines etc. Customer service being a prime example.

Thus I see nothing odd about the service dept not making a profit from the cars the garage sells, it is the good of the business that counts, and this is how a sensible director would view things.

-Chris-

Lots of people buy off a garage they grew up near and service in a garage the work near.
Lots of companies buy off a dealer that gives fleet discount, while servicing in a garage that's near work or on the work route.

Sales and service aren't tied and the fact that you have a brilliant service dept won't necessarily convert into more sales.
I would consider it wiser to consider sales, service and parts as three separate profit centres.

And ask yourself, do the parts department sell parts cheaper to the workshop than they do at the trade counter?
If the workshop goes quiet, will the parts dept. look for other customers for their parts or will they go quiet also?

Separation of depts is a much better business strategy.

Mc-BigE

JohnW wrote: »

he informed me that a D reg is worth about €1,500 more to the value of his cars compared to a other reg. He also added that the counties close to Dublin (so I suppose Kildare, Meath etc) are also more value that counties further afield.

This all depends on where your from, I would consider a 08-C-???? over a 08-D-???? for example because (being from Cork) it would be easier to sell on the C car than the D car, here are a couple of (Biased!) examples,

The D car could be a fleet car (as a lot of fleet companies are based in Dublin)

The D car could be an Ex Rental car (for the same reason as above)

both of thoses thing would send alarm bells ringing and i would be looking more closely at the car for damage and mileage.

gabgab

maidhc wrote: »

That sounds weird and not like any other business I have ever been involved in.

Some departments should not make a profit, but ultimately add to the bottom line through increased sales, repeat busines etc. Customer service being a prime example.

Thus I see nothing odd about the service dept not making a profit from the cars the garage sells, it is the good of the business that counts, and this is how a sensible director would view things.[/QUOT

Please out line the business's you have been involved in and how the are similar to the scenario's outlined?

Mc-BigE

I suppose in the current economic climate the trade-in price is getting lower and lower because dealers/private sellers are not selling on cars as much as before.
and in turn the dealers/private sellers price should be coming down to reflect the economic downturn

It is a buyers market as the moment, but ironically their not buying.

gabgab

Wanted to bump this up near the front in case its any use to people out there,

Also Maidhc, you never got back to me about those industry/businesses you worked in??

L-M

Lol, all this again.

gabgab

Yeh I saisd I would throw it up again as alot of people came out with examples and facts and figures but not alot to back them up, and I have gotten a few PM's off people looking for a hand or advice,

Its a good way for people to get a viewpoint of where the price came from,

peasant

EDIT

on second thought, thread re-opened

maidhc

gabgab wrote: »

Wanted to bump this up near the front in case its any use to people out there,

Also Maidhc, you never got back to me about those industry/businesses you worked in??

Law:

Many solicitors run litigation cases at a loss, or at least without making money from them, and this was subsidised by conveyancing and referrals (e.g. in the name of building a client base). In other words, it pays at times to do work for which they is no obvious monetary return.

A business must make money, but there is a big picture, and a small picture.

gabgab

Thanks Maidhc,

Many solicitors run litigation cases at a loss, or at least without making money from them, and this was subsidised by conveyancing and referrals

At a loss or braking even?? These are two very very different things. Take at a loss, how much of a loss are we talking? And I mean a financial loss, not a on paper loss, an actual cash flow bought for €20,000 sold for €18,000 after spending €1,000 on the car/law case

Have a run back through the thread there and back up some of your posts and I will happily debate them. There is a distinct difference between running a case, chargeable hours at below cost or at no cost,

And a individual purchasing a product at a loss, bearing in mind that this product is also depreciating and generally needs a distinctly larger amount of money spent on it to have any hope of recouping the costs,

If you have experience of these type of situations I would love to hear about them and how you can draw a comparison between this and the law/business situations you have been in,

Thanks,