Does Anyone Know ??

[gps-au]

I wonder what the dealer margin on the discovery's are ?

Actually I wonder about the freelander 2 as well, I noticed a dealer having a demo in stock, but checking is actually 12 months old... I would personally class that as "used" no matter what the mileage... which of cause makes me wonder what markup they have to play with ??

[Basil135]

I think the margins are a very closely guarded secret. Lets face it, you cant walk into Myers & ask them what their margin is on a television... ;)

That said, you can only ask, or at the very least, make a low offer on a car, and see what they say.

Even if the car is 12 months old, it is still classed as new, if it has never been registered.

I heard on the grapevine that someone bought one of the last Holden Monaro's made. They had it delivered to them on the back of a truck. Never registered. Evidently he has it in writing that the warranty period starts from the date of first registration.

So, if they have one in stock that they forgot about, then you could get a very good deal, complete with full warranty...

[giskard]

I saw a US cost price list for the FY14. Margins were not as high as I thought they would be.

[Geedublya]

Margins are often tight, however there are often factory bonuses which make the difference. Cars will sometimes be sold for cost or less to make the bonus.

[discotwinturbo]

Example.

Gxl Prado td auto white...break even price $53k (at drive away).....retail drive away $65200. Sister sells them.
Calais white.....break even $49500 (at drive away).....retail drive away $60500. A mate owns a Holden dealership.
I got $10k off normal drive away price for my D4.

Yes they have overheads, staff, etc....but you can negotiate comfortably off their advertised drive away price.

Brett.....

[stray dingo]

it is said they make more on the accessories, servicing and the like...

whether that is fact or not....dunno....????

[PhilipA]

The margins above seem a bit high to me.

When I was in the inductry admittedly 30 years ago dealer margin for Ford was 17% on all Australian produced cars plus 1% Holdback commission.
Margins on all Japanese was 14%.
Margin on BMW was 14%.

The water is muddied by "drive away"

Maybe that margin quoted includes full "delivery Fee" on the retail but not on break even. Delivery fee is and always has been a shonk where they charge $1000 or more to wash the car.
Regards Philip A

[gps-au]

Funny, did some checking around various dealer stock etc....

It does seem to happen quite often that a dealer "demo" with generally around 5000km, will be hanging around unsold. Seems once they get that high in mileage they stop being used and get pushed out.

Now I seem to remember something about a "demo" unit after 12 months cannot have its rego renewed as a "demo" unit again (??? - can someone confirm this).

If this is true and 11 month 3 week old demonstrator should be really a dealers deal to shift, just how much of a loss the dealer will bear...

Carsales.com.au actually comes in handy considering the prices you can get comparitive year old "used" vehicles advertised for.

[letherm]

When I told my brother that I was buying a new car we discussed how to get the best deal. He used to work in Esanda Finance many years ago and dealt with a lot of car finance etc.


What he said was that dealers get bonuses for how many cars they sell and once they hit a particular threshold, say 20 cars in a month for example, they will get a bonus when they sell more. The kicker is that the bonus is applied to ALL the cars sold that month not just the ones over the threshhold. So, bottom line is that a dealer could afford to take a loss on a particular car and with the bonus system still come out in front. Sort of a win win situation. Someone gets a good deal when buying a car and the dealer gets the extra bonus.


Don't know whether this system still operates but it explains apparent dealer "losses" so to speak.


Martin

[PhilipA]

It does seem to happen quite often that a dealer "demo" with generally around
5000km, will be hanging around unsold

These are usually wives/lovers/partners cars.
Other "demos" are cars that are registered without being sold at end June or December to bring manufacturer's sales figures up for bragging rights.
Real demos are turned over quickly to retain as much value as possible.
Regards Philip A

[Geedublya]

When I told my brother that I was buying a new car we discussed how to get the best deal. He used to work in Esanda Finance many years ago and dealt with a lot of car finance etc.


What he said was that dealers get bonuses for how many car they sell and once they hit a particular threshold, say 20 cars in a month for example, they will get a bonus when they sell more. The kicker is that the bonus is applied to ALL the cars sold that month not just the ones over the threshhold. So, bottom line is that a dealer could afford to take a loss on a particular car and with the bonus system still come out in front. Sort of a win win situation. Someone gets a good deal when buying a car and the dealer gets the extra bonus.


Don't know whether this system still operates but it explains apparent dealer "losses" so to speak.


Martin

This is the system I had explained to me by a salesman recently. He said it took him a while in the job to work out the system, it is the back room finance guys who determine what a car can sell for and how important it is to make the sale at that particular time.

[PhilipA]

What he said was that dealers get bonuses for how many car they sell

That only applied to finance companies who held dealer Floor Plan like Esanda. AFAIK the car companies do not give bonuses.

The dealers got and probably still get bonuses for how much RETAIL paper they write.
So dealers are always very anxious to sell hire purchase by the company that provides their Floor Plan ie finance for the cars they stock.

If they sell over a set target they get a lower interest rate on their Floor Plan.
Regards Philip A