Used Superb II on Autotrader Already!

[redbaron]

a more pertinent question might have been what was the invoice price of a car with GAP costing £1300...... but its much easier to abuse automotive retailers.....

[vRSbloke]

My last word, I prefer buying from dealers (but only ones that genuinely try their best and are pleasant and honest). I would happily pay slightly more (than a broker) for that personal touch but would still 'expect' a discount even if it doesn't quite match the broker price. I quite agree that dealers need to make a profit, but they deal with a range of people from 'savvy' knowledgable buyers like us (who will probably work them hard to get a mutually agreeable deal) to those who are totally naive, ignorant or just too plain 'nice' to want to haggle (who will probably pay list price). I bet that James would agree that for exactly the same car he could probably sell it to retail customers and not one deal would be identical.

I have been to a main dealer and overheard a conversation between two young salesmen who were laughing about a deal that one of them had just secured when they were mocking the customer who had paid much more than he should have - that sticks in my mind and it was over 10 years ago.

[Guest wilkopilko]

My last word, I prefer buying from dealers (but only ones that genuinely try their best and are pleasant and honest). I would happily pay slightly more (than a broker) for that personal touch but would still 'expect' a discount even if it doesn't quite match the broker price. I quite agree that dealers need to make a profit, but they deal with a range of people from 'savvy' knowledgable buyers like us (who will probably work them hard to get a mutually agreeable deal) to those who are totally naive, ignorant or just too plain 'nice' to want to haggle (who will probably pay list price). I bet that James would agree that for exactly the same car he could probably sell it to retail customers and not one deal would be identical.

I have been to a main dealer and overheard a conversation between two young salesmen who were laughing about a deal that one of them had just secured when they were mocking the customer who had paid much more than he should have - that sticks in my mind and it was over 10 years ago.

Hear hear.

And those who are looking at a motor from a dealer which is £2k-£3k more than a broker should at least try their hardest to get as close to the brokers best price - it probably wont happen but they should be able to get close enough to be squabbling over £500 & some freebies, this in my opinion is good enough for me. If you find £500 or so too much to bare then go get it from a broker or try another dealer.

[skisbp]

Well as most of it has been all said aready...

My 2pence are like this.

Because of some greedy dealers, brokers have become a reality. Thus we all pay 2-3x as much for servicing at our local dealers. As well as suffer lower resale values down the road.

Sorry to hear your leaving Skoda WoodenSpatulas. You actually sounded like the sort of chap I'd prefer to deal with... Good luck in your future endeavors!

[expostmanpat]

If no dealers (of a particular marque) were willing to deal with a broker then their residuals would be maintaned and their margins also (look at MINI). So I am afraid it is Skoda dealers selling out to brokers in order to sell a lot for a little that are forcing other dealers into receivership and not the brokers themselves.

[Burnsey]

Never really understood this discounting new cars thing. I can see it if one purchaser is buying / leasing 50-100 cars and so the admin time is low, but for retail customers the discount is just madness. Look at residuals for citreon (not to mention the state that GM and ford have got themselves into lately). They should be priced at what they are expected to sell for, without including an uplift for the discount thats probably going to be offered

Presumably the other issue just now is a weak £ against euro which has dropped quite a bit over the last 5 years which will be making these cars more expensive.

[mdk1]

Sorry to hear your leaving Skoda WoodenSpatulas. You actually sounded like the sort of chap I'd prefer to deal with... Good luck in your future endeavors!

The only reason Mr Spatulas is leaving Skoda is because at the end of the month he is being made redundant as the dealership is being closed by the parent company because they arn't making the money to stay open.

Read into that what you will.

I know Dean has done lots of good deals to help others and is a "Nice Dealer" to do business with.

Wish you all the best for the future

[jambo121]

Does anyone know what the margin on a brand new elegance lets say, at list price. I understand that bonuses make up the vast majority of the profit to dealer but it would just be interesting to know. If anyone will divulge that is.

[Supurbia]

Well I'd like to have a say on this.....

Having had various deals on cars over the years the deal goes like this, the main dealers love idiots who pay list and can be conned into buying warranties that the manufacturer has already provided, what a wonderful world it would be for dealers if everyone was like this.

However, the motor trade in general is still an Arfur Daley outfit, try getting anything resolved without going to court when they sell you a lemon, then we move on to parts, this is where a good well run business will make it's money, the mark up on parts is incredible, I have trade access to VX stuff, here's a selection, 5/30 oil I pay £22 for 5 litres, retail is close to £50, H7's I pay £3.50, retail is near £12, all this still leaves the garage happy that it has made money from me.

Next comes the business program, new cars these days are like printers, you can have the car cheap but the ink's gonna cost you, this doesn't help the salesman I admit, but £200 for a £3 oil filter and £20 of oil just to get the book stamped is where profit is attainable for those places offering good work and service to it's customer's, sadly not a strong point in the Skoda plan ime.

Lets look at the px'ing, the book shows most cars to be worth 30% of list after 3 yrs or thereabout's, so how come my 3 yr old 19k car was originally on a main agent forecourt for 11k, working the figures the last owner would've received about £6.2k in px, and then it's cleaned and retailled for nearly 5k more, is this fair practice? only a few weeks ago I was offered 4.5k for it having paid 9.2k for it 16 mths ago, I expected 5.5k tbh against an 11k car, mine would forcourt for around 6.5k if not more all day long on a Skoda site, the game is up I'm afraid ppl know that they are having the stick worked up them and that's why they avoid the dealers these days.

Some of my experiences in the past...

I offer the finance guy the chance to beat the bank, bank offers at the time 6.9% no problem I can get you 3% sir, ok how much a mth I ask, his answer is £30 pm more at 3% than the banks 6.9% go figure who lent me the money.

I did let a finance guy have the business one time, and guess what? when the papers arrived he'd added £100 to the debt to pay his fees.

Times are tight again, and if anyone wants to sell cars they should be prepared to give it away as low as possible if a genuine buyer walks in, but the majority won't, instead they will look at the money and think of it as their own instead of someone elses, I can 100% predict if I go new next time, I'll go to Skoda and want a list car of 21k discounted it will be ok sir hows £20.5k, however I will also spec up an Insignia that lists 22k and drive it away for no more than 17k, VX will deal why not VAG ? and before anyone slags the Insignia, think how you think when some Joebody slags a Skoda off, ignorance is king among those that know nowt comes to mind.

Bottom line is cars are overpriced to start with, it's the volume of sales that lets it down as a profitable sale at lower prices right now, if I walked in and ordered 100, 22k cars and stated I'm only paying 15k a unit who'd bet I didn't still get my 100 cars?

I read ppl say the margins aren't there to deal anymore, well look at this example, it's 1989 I paid £8800 for a list price of £10500 Pug 405 GLD, that's a 15% discount, today the cars bretheren is £17k, everything has increased equal so my discount would now make it £14.5k, so in relation my discount is now £2550, and I know a Pug dealer would either match it or better it, yet you try getting Skoda to knock £500 off a 22k and you'd be very lucky, and lets look deeper, the Pug is made in France iirc where wages are at proper levels, the Skoda is made by ppl earning a lot less, Skoda are missing something here, they make good cars with a bad image problem, this should throw them to chuck cars at cabbies,reps and coppers by the bucket, if the Octavia TDi could be sourced for £10k I could probably sell 50 tomorrow, but instead the askings are closer to £15k most of the time, and that is just too rich when compared up to a 9 mth old Vectra or Mondeo for 8-10k, granted you won't get the Ford for that right now but the time will come soon enough.

And before anyone takes offence, my comments are about the trade not the individual, so James etc please do not take any of this personally, use it to help your industry compete in what is going to be a very hard market.

[Ants]

Lets look at the px'ing, the book shows most cars to be worth 30% of list after 3 yrs or thereabout's, so how come my 3 yr old 19k car was originally on a main agent forecourt for 11k, working the figures the last owner would've received about £6.2k in px, and then it's cleaned and retailled for nearly 5k more, is this fair practice? only a few weeks ago I was offered 4.5k for it having paid 9.2k for it 16 mths ago, I expected 5.5k tbh against an 11k car, mine would forcourt for around 6.5k if not more all day long on a Skoda site, the game is up I'm afraid ppl know that they are having the stick worked up them and that's why they avoid the dealers these days.

£5000 profit margin!!!!!!! I think not, but thanks for your insight into the motortrade, you seem to have a lot of inside knowledge, how long have you been working in the motor trade?

['daiking']

If no dealers (of a particular marque) were willing to deal with a broker then their residuals would be maintaned and their margins also (look at MINI). So I am afraid it is Skoda dealers selling out to brokers in order to sell a lot for a little that are forcing other dealers into receivership and not the brokers themselves.

:+1:

Can anyone tell us why dealers sell cars via brokers?

[Gizmo]

IMO the fairest way to sell cars is similar to the way they are sold at the car supermarkets (well the ones i have been to anyway): the price you see on the screen is the price you pay, this of course means the car has to be priced sensibly to start with.

Anyone that can offer a discount of a few grand (be it a dealer or broker) is just proving that the car is way overpriced to start with.

You should not have to rely on your negotiating skill to get a good deal, whilst the old retired couple are basically getting stung by paying top dollar.

[Burnsey]

Without wanting to get into a debate. Vx and ford are worth about 30% of book after 3 years. Skoda do considerably better, at least up here they do as the taxi's firms buy them all, so a diesel hard to find.

Since they compete on the used market you can see below why you can get £2k off a ford mondeo, whereas a skoda is harder to discount, especially I would think at the moment with a falling £ against the euro, which makes a massive difference. Just think how much more you spent on holiday this year compared to last year

Year 0 Year 1 Year 2 Year 3 Year 4

Ford Mondeo Estate 1.8 TDCi 100 Edge 5dr 18,445 10,654 8,464 7,017 5,804

Skoda Octavia Estate 1.9 TDI PD Elegance 5dr 16,645 10,498 8,334 6,735 5,444

[auroan]

Just think how much more you spent on holiday this year compared to last year

Year 0 Year 1 Year 2 Year 3 Year 4

Ford Mondeo Estate 1.8 TDCi 100 Edge 5dr 18,445 10,654 8,464 7,017 5,804

Skoda Octavia Estate 1.9 TDI PD Elegance 5dr 16,645 10,498 8,334 6,735 5,444

That would be ok if you compare like for like. The Ford equiv to a Octavia is a focus not a Mondeo.

[cheezemonkhai]

yes they do just point you to a dealer, but if they werent there full stop then dealers wouldnt have to sell cars at a loss. you coudl still go and get a good deal and even play one off another. but these brokers get paid more than the dealers do!

As I keep saying, no dealer is forced to sell at a loss. Just don't sell the car, nobody is putting a gun to your head and I will bet that no dealer will order a car in for a customer on a 12week lead time via a broker to sell it at a loss too. There would be no point and accounts wouldn't let you do it unless it brings in some other incentive such as a cash rewward or future discount on the next quarters orders.

Brokers are good for the customer, just like insurance brokers.

We don't all complain CK are screwing people or AF do we?

They make the customer a saving and use some of this saving as their profit on the sale.

[pauld]

I have thought about just ignoring this thread, but there is some interesting arguments from both sides. There will never be a right or wrong to this, but I will say my bit. You will probably be able to guess what side I am on after I finish.

The price of vehicles is set by the manufacturer, dealers work to a set margin and usually a volume related bonus - the margin and the bonus is probably less than you think. The manufacturers probably don't really care how much the car is sold for, they get their profit whatever. Depending on the franchise the bigger the volume of sales the bigger the back end bonus.

So it is usually bigger dealers who get the bigger bonuses that supply the brokers, it is easy money for them really. It Could help them achieve a nice bonus. The smaller dealers can't compete with this.

If you don't want to pay dealer prices don't, but please consider what it costs to operate a dealership there are staff to pay, rates & rent etc. All the demos and showroom stock are not free they have to be paid for as does the fuel, insurance and road tax on all these vehicles. What overheads does a broker have? a small office, internet & phone I would guess?

What happens if the broker goes missing with your money? do they have the backing of the manufacturers?

The likes of Ford & Vauxhall just seem to be interested in volume and will do whatever it takes to achieve this, If they are prepared to give huge sums of money away then surely it is there pricing that is wrong not Skoda's, it would seem they have more margin to play with. Maybe producing more cars is cheaper?

Whilst I can see the attraction of using independants for servicing are you getting the same level of service? Are you getting loan cars? collection and delivery? is your car checked for re-calls, updates or any re-works? Do these companies have all the required insurance, health and safety and environment policies? are the technicians trained 1 - 2 weeks every year?Unfortunately all these things have a cost. There are a lot more industries and trades that charge in line with or more than a dealership and have a lot less overheads and skills. Yet these charges just seem to be accepted. What are the charges for a plumber, electrician? or what about a barber, how much can they earn in an hour?

Ultimately a dealership ocupies a lot of space has a lot of equipment and has huge operating expenses, sometimes they like to make a profit. However most struggle to and the next six months to a year will be an interesting time for some.

I suspect there may be less dealers around one year from now.

Food for thought.

[Want a VRS]

I love these threads, because everyone has an opinion and everyone who has posted has hit the nail on the head. Every buyer is different, some can't/won't haggle, some love buying cars, some hate buying cars, some buy through brokers, some prefer a dealer but want to haggle the list is endless. We on this forum are a very small buying minority.

There is a place for Dealers and Brokers, they both offer a service to which the buying customer is happy with.

Depreciation is a BIG problem, the reasons for this is an endless list, increased model ranges and an ever increasing Niche model range, increased new car incentives (free insurance, cashback, free extra's etc etc) Badge snobbery, new car snobbery, nice and shiny car snobbery, more cars per head, buying new cars so frequently... my god this list goes on and as you will see lots of it is related, but you all get the idea. We have one of the worst car depreciation rates in the world and I for one hate losing money on cars. I love cars but hate losing money.

Just a quick note, Whatcar has a really simple Deprecation calculator while it is never going to be 100% accurate it does give you a really good idea when buying new.

[VRStu]

I have thought about just ignoring this thread, but there is some interesting arguments from both sides. There will never be a right or wrong to this, but I will say my bit. You will probably be able to guess what side I am on after I finish.

The price of vehicles is set by the manufacturer, dealers work to a set margin and usually a volume related bonus - the margin and the bonus is probably less than you think. The manufacturers probably don't really care how much the car is sold for, they get their profit whatever. Depending on the franchise the bigger the volume of sales the bigger the back end bonus.

So it is usually bigger dealers who get the bigger bonuses that supply the brokers, it is easy money for them really. It Could help them achieve a nice bonus. The smaller dealers can't compete with this.

If you don't want to pay dealer prices don't, but please consider what it costs to operate a dealership there are staff to pay, rates & rent etc. All the demos and showroom stock are not free they have to be paid for as does the fuel, insurance and road tax on all these vehicles. What overheads does a broker have? a small office, internet & phone I would guess?

What happens if the broker goes missing with your money? do they have the backing of the manufacturers?

The likes of Ford & Vauxhall just seem to be interested in volume and will do whatever it takes to achieve this, If they are prepared to give huge sums of money away then surely it is there pricing that is wrong not Skoda's, it would seem they have more margin to play with. Maybe producing more cars is cheaper?

Whilst I can see the attraction of using independants for servicing are you getting the same level of service? Are you getting loan cars? collection and delivery? is your car checked for re-calls, updates or any re-works? Do these companies have all the required insurance, health and safety and environment policies? are the technicians trained 1 - 2 weeks every year?Unfortunately all these things have a cost. There are a lot more industries and trades that charge in line with or more than a dealership and have a lot less overheads and skills. Yet these charges just seem to be accepted. What are the charges for a plumber, electrician? or what about a barber, how much can they earn in an hour?

Ultimately a dealership ocupies a lot of space has a lot of equipment and has huge operating expenses, sometimes they like to make a profit. However most struggle to and the next six months to a year will be an interesting time for some.

I suspect there may be less dealers around one year from now.

Food for thought.

One thing you have also missed is that by a Broker offering a new car for much less than the RRP or a reasonable discount from a dealer is killing the used car market. People will naturally sooner buy a newer car for their money which means the value pf PX's plummets. I think some people would be quite horrified with what they would be 'bid' on their car in PX for another. I spoke to a trader today who has just bought a 57 RS TFSi for £9k!!! Also spoke to somone last week who bought one for a similar price.

Dealers who bought cars a couple of months ago are now finding that they are very much heading toward if not in negative equity with used cars.

You'll soon be complaining when you have to drive 60, 70 - 100 miles to get your waranty work carried out.

[pauld]

Did not want to get into the depreciation debate, but dealers also suffer the same as the driver, don't forget all the demo cars and used stock dealers hold all of them loose money the same as any cars.

The dealers should be recognised for trying to keep the cars priced realistically, this will help the depreciation on all cars.

I doubt many people on here would like to have a stock of 50+ cars loosing upwards of £500 per month.

The dealers don't like depreciation any more than the owners of cars.

So we come full circle and blame the brokers for forcing the market to a price thus reducing the value of your car and blame those dealers that supply these cars to the brokers just to earn an extra bit of bonus.

I bet what they earnt on the bonus they have lost many times over in depreciation.

[dan123]

I have thought about just ignoring this thread, but there is some interesting arguments from both sides. There will never be a right or wrong to this, but I will say my bit. You will probably be able to guess what side I am on after I finish.

The price of vehicles is set by the manufacturer, dealers work to a set margin and usually a volume related bonus - the margin and the bonus is probably less than you think. The manufacturers probably don't really care how much the car is sold for, they get their profit whatever. Depending on the franchise the bigger the volume of sales the bigger the back end bonus.

So it is usually bigger dealers who get the bigger bonuses that supply the brokers, it is easy money for them really. It Could help them achieve a nice bonus. The smaller dealers can't compete with this.

If you don't want to pay dealer prices don't, but please consider what it costs to operate a dealership there are staff to pay, rates & rent etc. All the demos and showroom stock are not free they have to be paid for as does the fuel, insurance and road tax on all these vehicles. What overheads does a broker have? a small office, internet & phone I would guess?

What happens if the broker goes missing with your money? do they have the backing of the manufacturers?

The likes of Ford & Vauxhall just seem to be interested in volume and will do whatever it takes to achieve this, If they are prepared to give huge sums of money away then surely it is there pricing that is wrong not Skoda's, it would seem they have more margin to play with. Maybe producing more cars is cheaper?

Whilst I can see the attraction of using independants for servicing are you getting the same level of service? Are you getting loan cars? collection and delivery? is your car checked for re-calls, updates or any re-works? Do these companies have all the required insurance, health and safety and environment policies? are the technicians trained 1 - 2 weeks every year?Unfortunately all these things have a cost. There are a lot more industries and trades that charge in line with or more than a dealership and have a lot less overheads and skills. Yet these charges just seem to be accepted. What are the charges for a plumber, electrician? or what about a barber, how much can they earn in an hour?

Ultimately a dealership ocupies a lot of space has a lot of equipment and has huge operating expenses, sometimes they like to make a profit. However most struggle to and the next six months to a year will be an interesting time for some.

I suspect there may be less dealers around one year from now.

Food for thought.

Pauld, I have read your post and it makes interesting reading, however I think you miss a couple of key points.

Firstly, as long as you are sensible a broker can't disappear with your money, put the deposit on credit card (so it's covered) and pay the balance to the supplying dealer.

Secondly, a broker supplied car IS a dealer supplied car. So by buying from a broker you are still supporting the Skoda dealer network. My broker sourced vRS was supplied to me in the Midlands by Benfield Skoda in Harrogate, North Yorkshire. I was a customer of that dealer (albeit indirectly) and they still send me marketing material to this day so I am also a potential repeat customer.

The broker obviously takes a cut, as that is how they make their money, and Benfield will have made profit, so what riled me is that when I offered my 3 nearest dealers the chance to match the deal (which would have been a better deal for them than it was for Benfield as no Broker fee was involved) all I got was sucking of teeth and scare stories about brokers and the car wont turn up and it will be an import etc.

You say the smaller dealers cant compete with the big guys, but I handed them the chance on a plate and it was still rejected. Why do they not want to add the volume?

Many years ago my elder brother was asked to leave a Vauxhall dealership as he kept asking what the price was to change and all the salesman would quote was £ per week! I sometimes wonder if some dealers are only willing to deal with people they can shaft, maybe it's some kind of control thing?

On a final note, I can see (as many others have said) that this debate will never be resolved as everyone takes a different stance. One thing I hope we can all agree on is that Briskoda is a pretty friendly place to be and hopefully it will stay that way.

Apparently I must be a chav as I like to get a good deal on a new car!

Dan

Edited 6 October, 2008 by dan123

[woodenspatulas]

If no dealers (of a particular marque) were willing to deal with a broker then their residuals would be maintaned and their margins also (look at MINI). So I am afraid it is Skoda dealers selling out to brokers in order to sell a lot for a little that are forcing other dealers into receivership and not the brokers themselves.

exactly! which is why we dont entertain the brokers, BUT will look at doing a deal if someone comes in with a quote from them.

Sorry to hear your leaving Skoda WoodenSpatulas. You actually sounded like the sort of chap I'd prefer to deal with... Good luck in your future endeavors!

thanks for that, nice to know i dont come across as your standard sales prevention officer

Woodenspatulas, I notice your reference to dealer add ons.

When I bought my Honda Civic (from a dealer may I add) they tried to sell me GAP insurance, it was all new to me but I could see the logic. I was about to sign, it was £399 but I suddenly asked if I could buy GAP insurance online....I saw his face drop....it was £99.

Isn't that just greed on the dealers part?

Dan

nope, i bet my house that if you look into the t's and c's of the 99 pound GAP you'd find a much lower max claim limit, and more than likely find the underwriter is registered off mainland uk, there fore bypassing the tough laws regarding the sale of insurance products. Im always very honest with my customers that you can get gap cheaper, but with it comes less cover and more chance of your claim being binned.

you get what you pay for in this instance

The only reason Mr Spatulas is leaving Skoda is because at the end of the month he is being made redundant as the dealership is being closed by the parent company because they arn't making the money to stay open.

Read into that what you will.

I know Dean has done lots of good deals to help others and is a "Nice Dealer" to do business with.

Wish you all the best for the future

thankyou mate i hope to perhaps return to Skoda when the new dealer opens eventually, so, as the governer of california once said "i'll be back"

[jcblincs]

The broker obviously takes a cut, as that is how they make their money, and Benfield will have made profit, so what riled me is that when I offered my 3 nearest dealers the chance to match the deal (which would have been a better deal for them than it was for Benfield as no Broker fee was involved) all I got was sucking of teeth and scare stories about brokers and the car wont turn up and it will be an import etc.

You say the smaller dealers cant compete with the big guys, but I handed them the chance on a plate and it was still rejected. Why do they not want to add the volume?

Dan

i did the same with dealers near to me . to be fair some came back with a reasonably good attempt but one said he would not budge from full RRP - muppet ! how will he sell cars ? how will he stay in business ?

[cheezemonkhai]

And a 2.0 PD TDi as well. The ad does say "New Shape"

Auto Trader UK - SKODA Superb 2.0 TDI PD Elegance

It's a 2.0 CR TDI and from a conversation with the guys there I'm pretty certain they are permitted to sell it too.

A lot of garages advertise it for sale just before it comes off the demo time, but they had another car I was interested in that they wouldn't sell until it had done it's time as required.

I'd be pretty certain there isn't a fast one being pulled.

[dan123]

From woodenspatulas

"nope, i bet my house that if you look into the t's and c's of the 99 pound GAP you'd find a much lower max claim limit, and more than likely find the underwriter is registered off mainland uk, there fore bypassing the tough laws regarding the sale of insurance products. Im always very honest with my customers that you can get gap cheaper, but with it comes less cover and more chance of your claim being binned.

you get what you pay for in this instance"

Sorry but you're wrong on both counts, the policy was from Hitachi Capital Insurance Limited which is a subsiduary of Hitachi Capital (UK) plc. It is authorised and regulated by the FSA.

The policy limit was £10000, more than enough for a £16K car.

Dan

[cheezemonkhai]

It's common knowledge you can get GAP insurance from the big UK based insurance companies a lot less than from the car dealers.