Is the used car "bubble" about to pop?

[Graham2]

Based on what Porsche were offering me as a trade in price, and what other Porsche dealerships had similar cars up at, it was a 20% markup. I appreciate that they would have costs to come out of that, but it wouldn’t be taking them down to 5%

You're talking about a used car then yea?

 

[Ian A]

Ex worked for Agnew's Audi, and said the actual new vehicle margin was pitiful. 5%, there or there abouts. That's why warranties, gap insurance, finance, paint protection etc are all pushed so hard and cash buyers were the devil. This is may be 5-6 years ago however and 2nd hand information, so take with the appropriate sized dose of salt.

2nd hand vehicle margin was much better.

Apples and oranges, but on new tractors, dealers make often sub 1%. The whole business comes from aftersales, finance, service and parts, with significantly higher value vehicles than cars.

 

[KevM]

Volume brands would probably be closer to what graham has mentioned.

The reconditioning of Audi and Porsche Approved Used, would make your eyes water

 

[gpaevo]

All about the finance when it comes to margins etc.

I did the deal on my current car but at no point did they ask or did I say I wasn't taking finance. Pushed the price down hard and shook dealers hand. I thought he was going to have a hemorrhage when I told him I was paying cash. He gave off buckets about how he was only making £50 (ballix) on the car and that I'd screwed him over as the deal was based on financial reward.

I said, you never asked me, you just assumed I was taking finance.

 

[gary87]

Ex worked for Agnew's Audi, and said the actual new vehicle margin was pitiful. 5%, there or there abouts. That's why warranties, gap insurance, finance, paint protection etc are all pushed so hard and cash buyers were the devil. This is may be 5-6 years ago however and 2nd hand information, so take with the appropriate sized dose of salt.

2nd hand vehicle margin was much better.

Apples and oranges, but on new tractors, dealers make often sub 1%. The whole business comes from aftersales, finance, service and parts, with significantly higher value vehicles than cars.

Finance was a massive part of it when I worked in Agnew VW but then again we used to be able to set our own rates which helped with negotiation. Now with the FCA regulations they have a restricted "agreed" limit with the finance house and that's why the APR seems so high now on Used Cars.

The commission for finance on a New Car though was FA as the manufacturer normally had a Deposit Contribution or free Service Plan or something with it. £100 dealer commission for Polo/UP!, £200 for Golf/Tiguan/Jetta/Touran, £300 for Touareg. A £649 GAP Policy for example had a dealer commission of £395 and the Paint Protection (£299 customer cost in VW, £399 in Audi for same product) had a commission of £165 (£265). So you sell a Polo with the bits you got £100 finance comm, £165 PP and about £180 for GAP.

 

[aaflyer79]

All about the finance when it comes to margins etc.

I did the deal on my current car but at no point did they ask or did I say I wasn't taking finance. Pushed the price down hard and shook dealers hand. I thought he was going to have a hemorrhage when I told him I was paying cash. He gave off buckets about how he was only making £50 (ballix) on the car and that I'd screwed him over as the deal was based on financial re

I said, you never asked me, you just assumed I was taking finance.

Was this on a new car or used? That’s interesting because I’d have thought at some point when discussing your deal he’d have mentioned finance - are the deals not better with finance given the dealer support the finance packages comes with, take it and pay off within (14?) days? Or is that an urban myth?

 

[AC]

When I bought the wife’s car a few years back (main dealer), the chap I was dealing with said that if I took out a minimum of 5k in finance I’d get 3 services free from them. Interest rate was high enough but there was no penalty for clearing the finance as long as you waited 60 days (might have been 30.. not 100% sure)… so that’s what I did. Helped him out as I took some finance and got 3 services for the price of the small interest payment. Think it was less than £100, bargain.

 

[mike150]

I hate going into see a car in the likes of Hursts because of all the they talk and all the they try to sell you, it puts me off going in to even look at a car in Hursts or SERE TBH.

I don't want finance, GAP, paint crap, seat protection rubbish a cleaning kit FFS.

Small dealers are straight forward, look at the car, nah, walk away.

On topic.........

When most buy on PCP and payments have increased massively then they want a lesser car for the same per month, not far bigger payments for the same car in a different colour. It means only one thing for new or newish mid to up market car values

 

[gpaevo]

Was this on a new car or used? That’s interesting because I’d have thought at some point when discussing your deal he’d have mentioned finance - are the deals not better with finance given the dealer support the finance packages comes with, take it and pay off within (14?) days? Or is that an urban myth?

Used, 12 months old.

 

[Coog]

I hate going into see a car in the likes of Hursts because of all the they talk and all the they try to sell you, it puts me off going in to even look at a car in Hursts or SERE TBH.

I don't want finance, GAP, paint crap, seat protection rubbish a cleaning kit FFS.

Small dealers are straight forward, look at the car, nah, walk away.

On topic.........

When most buy on PCP and payments have increased massively then they want a lesser car for the same per month, not far bigger payments for the same car in a different colour. It means only one thing for new or newish mid to up market car values

Wasn’t my experience. Bought without finance the guy just made me sign a form to say we’d discussed finance options. Thrown the keys for a test drive on my own. When I came back asked if I wanted the car, yes or no.

No need for messing I guess when there was another couple of blokes kicking stones waiting for me to make a decision before they could have a test drive of it themselves. The thing didn’t even have pictures of it online. Easy sale for them and great buy for me. In and out in half an hour and still worth what I paid for it 18 months later.

Incidentally the scratch and dent insurance was a few hundred quid and I was dubious but went ahead anyway. Have had 4 full wheel refurbs, half dozen dent removals and a rear bumper sprayed. Not a mark anywhere on the car thanks to it. Absolutely class job tbf.

 

[pizza85]

Wasn’t my experience. Bought without finance the guy just made me sign a form to say we’d discussed finance options. Thrown the keys for a test drive on my own. When I came back asked if I wanted the car, yes or no.

No need for messing I guess when there was another couple of blokes kicking stones waiting for me to make a decision before they could have a test drive of it themselves. The thing didn’t even have pictures of it online. Easy sale for them and great buy for me. In and out in half an hour and still worth what I paid for it 18 months later.

Incidentally the scratch and dent insurance was a few hundred quid and I was dubious but went ahead anyway. Have had 4 full wheel refurbs, half dozen dent removals and a rear bumper sprayed. Not a mark anywhere on the car thanks to it. Absolutely class job tbf.

I've always said a straight no to any of that insurance add on guff but I've seen you mention it a few times on here and seems like it could be a good job!

Always assumed they'd be awkward about paying out on it.

 

[Coog]

I've always said a straight no to any of that insurance add on guff but I've seen you mention it a few times on here and seems like it could be a good job!

Always assumed they'd be awkward about paying out on it.

I've always declined too. Was told on here it'll be an apprentice out the back rattle can respraying the wheels, etc so thought it was a risk but the car was cheap enough and I had a bit of budget left & honestly it's been great.

They also paid for me to take the car to Phillips for a Haldex service even though it wasn't due.

Even the sale prep was good. I dropped it to a detailer a couple of days later to get paint corrected and ceramic coated as I assumed it would be a mess and he said there wasn't really much for him to do!

 

[lennyd]

Volume brands would probably be closer to what graham has mentioned.

The reconditioning of Audi and Porsche Approved Used, would make your eyes water

When we bought our a4 I had initially went to buy a different a4 but it had just been sold in another branch and this one had just been traded in that morning. Done the deal on the car before it was even prepped. They ended up fitting 4 new hankook as the back tyres were below their multi point check and as it was quattro they said they had to do all the tyres at the same time. They also refurbed 2 of the alloys. All this after the car was sold and before we could collect it. Was very pleased with their customer service at the time

 

[Dervhead]

Incidentally the scratch and dent insurance was a few hundred quid and I was dubious but went ahead anyway. Have had 4 full wheel refurbs, half dozen dent removals and a rear bumper sprayed. Not a mark anywhere on the car thanks to it. Absolutely class job tbf.

Love it!

 

[Chris100]

In and out in half an hour and still worth what I paid for it 18 months later.

Incidentally the scratch and dent insurance was a few hundred quid and I was dubious but went ahead anyway. Have had 4 full wheel refurbs, half dozen dent removals and a rear bumper sprayed. Not a mark anywhere on the car thanks to it. Absolutely class job tbf.

All that on a car you have had for 18 months, can you actually drive

 

[Coog]

All that on a car you have had for 18 months, can you actually drive

Sounds bad that right enough. Of all that I can hold my hands up to kerbing one alloy wheel. The rest was external factors out of my control. Plus it's amazing how fussy you become when it's paid for. One wheel was refurbished due to a stone chip about 1/3 the size of a 1p coin.

 

[Graham2]

Incidentally the scratch and dent insurance was a few hundred quid and I was dubious but went ahead anyway. Have had 4 full wheel refurbs, half dozen dent removals and a rear bumper sprayed. Not a mark anywhere on the car thanks to it. Absolutely class job tbf.

So thats why Hursts are laying people off, their scratch and dent insurance is burying them