Negotiating with dealers - what can they give on?

Trojan

Buying private there doesn't seem to be a whole lot you can negotiate on - cash price, tank of fuel, some repairs before purchase, that seems to be about it.

Buying from a dealer, seems there's a lot more scope for negotiating. I'm just wondering what kind of things are negotiable and what aren't. Can you ask for an extended warranty on a used car sale, free servicing for X time period? Guaranteed buy-back later if in Y condition? Tow-hitch to be added (or removed)? Z tanks of gas over the next year?

What kind of points will dealers be prepared to negotiate on to sell a used car? What will they absolutely not move on? Anyone got some tips or want to share a good deal they achieved?

colm_mcm

I wouldn't negotiate for something down the road like a service. Too much scope for it to go pear shaped. Cash is king tbh. Mats/towbars etc can be sourced cheaply, so unless the seller isn't up to speed on how expensive something is, and you can throw it into the deal last minute - you're better off just haggling money off. Last thing dealer wants to do is arse around getting stuff fitted to the car.

bazz26

While dealers may have more scope for negotiation on the price than a private seller, the private seller should be cheaper because their is more risk involved and are offering no warranty.

As Colm said bottom price should be all that matters, things like mats, tank of fuel, etc are distractions that are possible to get yourself cheaper elsewhere.

christy02

bazz26 wrote: »

While dealers may have more scope for negotiation on the price than a private seller, the private seller should be cheaper because their is more risk involved and are offering no warranty.

As Colm said bottom price should be all that matters, things like mats, tank of fuel, etc are distractions that are possible to get yourself cheaper elsewhere.

I walked from 2 dealers recently as they wouldn't negotiate much at all and told me "I couldn't let it go cheaper than x" I walked both times as I felt that what I was offering was fair and they wouldn't even negotiate.

Fast forward a month and both cars were still on DD for cheaper than I had offered. I felt so justified!!!!
One dealer almost threw me out as I told him I would pay 5200 for a car priced at 6k.
On sale still at 5k (no offers apparently)
I bought similar (mileage,spec,year) for 4500 privately. Delighted with it.

Stand your ground is my advice. If its not what you want to pay then walk.

Spipov

christy02 wrote: »

I walked from 2 dealers recently as they wouldn't negotiate much at all and told me "I couldn't let it go cheaper than x" I walked both times as I felt that what I was offering was fair and they wouldn't even negotiate.

Fast forward a month and both cars were still on DD for cheaper than I had offered. I felt so justified!!!!
One dealer almost threw me out as I told him I would pay 5200 for a car priced at 6k.
On sale still at 5k (no offers apparently)
I bought similar (mileage,spec,year) for 4500 privately. Delighted with it.

Stand your ground is my advice. If its not what you want to pay then walk.

i completely agree with the above. i dont know what dealers are up to, but they are quite belligerent about prices and make it sound like you are robbing them.

they'd rather sit on stock and lower their prices than give you a fair price for your trade in.


when you give a value you think is right for your car, they act like they've been shot and you are robbing them in broad daylight.

hate that. now there are good dealers, but most of the ones ive dealt with have that attitude. is there a school to learn all of that?

djimi

Spipov wrote: »

when you give a value you think is right for your car, they act like they've been shot and you are robbing them in broad daylight.

Im not a dealer but I would imagine the bolded part is a lot of their problem; what the general public think something should be worth and what something actually is worth are often two very different things. There will be cases, such as the example above, where the dealer is wrong to hold onto the car and in hindsight should have let it go for cheaper, but I would imagine that for every story like that there is probably a hundred cases of idiots coming in and offering far less than the car is worth and will ultimately sell for, or thinking that they should be getting thousands more for their car in a trade in because they saw how much they sell for online. Not excusing their attitude, but I can probably understand where it comes from.

christy02

djimi wrote: »

Im not a dealer but I would imagine the bolded part is a lot of their problem; what the general public think something should be worth and what something actually is worth are often two very different things. There will be cases, such as the example above, where the dealer is wrong to hold onto the car and in hindsight should have let it go for cheaper, but I would imagine that for every story like that there is probably a hundred cases of idiots coming in and offering far less than the car is worth and will ultimately sell for, or thinking that they should be getting thousands more for their car in a trade in because they saw how much they sell for online. Not excusing their attitude, but I can probably understand where it comes from.

In my case I had no trade in and was willing to hand over cash there and then. In reality the car is only worth what punters are willing to pay no.matter what dealer thinks.

For me it was car that is 1k a year to tax. Most will prefer to spend an extra 5 or 6 k on the purchase price to save a few hundred a year on tax.

I had a Max I was willing to pay based on research I had done before going to look at cars. In the end I was right and they should have at least tried to negotiate with me.

I would have thought that turnover was key and a car sitting on a lot for 2 or 3 weeks would be costing more than a few hundred euro.

djimi

In your case you are correct; the dealer made the wrong call to hold out for the higher price and is probably regretting not selling to you now.

However, in a more general sense I think the point about peoples expectations is fair enough. A car is only worth what someone is willing to pay, but that doesnt mean that the dealer should sell for whatever price is being offered when they can have a reasonable expectation that they will get more for it should they hold out. They might not always be right (as you have seen), but I would imagine that in most cases they will know exactly what they can expect to make for a certain car.

Most people chance their arm when either buying or selling a car, and most people are realistic enough to know that their first offer is pretty unlikely to be accepted. You will however get some clowns who take this personally (Im not aiming this at you btw!) and will be offended when the dealer doesnt accept their lower offer, usually based on some ill-conceived notion of what the car is worth based on the price of some rougher examples of private sales on DD, or they will look online and see dealers selling similar cars to theirs for X amount and kick off about why they are only being offered X-30% as a trade in for their car. Dealers probably see this every day (as do most people working in any aspect of retail), and I know myself even from working in a shop (let alone a car dealers) that eventually you develop a very low tolerance and a very short fuse for people who act like this.

Trojan

Very interesting replies, thanks for contributing to the discussion. One thing that does surprise me is that apart from the primary negotiation point of price, there seems to be few secondary options up for discussion. In my line of business everything is negotiable and it's possible to trade off certain points against other equivalents. (Similarly in Dragons Den it's not always the cash investment to percentage ownership, there are conditional offers etc. I'm not claiming buying cars is the same as negotiating investment with the Dragons, just using those as examples of how people look for alternative deals).

For example, I'd have thought that I could offer to buy "as seen" from a dealer and get a discount based on the fact that there is no warranty cover for them to be concerned about. Or going the other way, offer more cash in return for 18 month warranty. Or some other factor.

One thing mentioned above is the market value of a car, and how that's simply what a buyer is prepared to pay. I wholeheartedly agree. I think there's a big different between someone making an offer of say €1100 on a €2000 asking price, compared to someone offering €150 on a €2000 asking price - the former may well be reasonable, particularly for a high tax former luxobarge (like Christy may have been looking at in his example above).

Would I get kicked out of a dealership for offering 55% of asking? Going by the above posts, that's a real possibility, even if it is the true market value of the car - because I'm a buyer with cash, and it's been on the lot for over a month.

bazz26

I think some buyers may have a perception that just because they have cash in their hands they assume they can buy something for nearly half it's asking price. Offering only 55% of the asking price is bound to get you nowhere really with a dealer unless it for something that has moss growing around it on their forecourt. Most dealers would just get the hump at such a low offer and think you were not serious about buying the car.

Simple reality is that a dealer has a minimum profit to make on any car he/she sells, along with this he/she more than likely bought the car at a certain price, valeted it, will fix any small cosmetic or mechanical issues with it and then stick a warranty on it. There are also other cost of doing business overheads to take into account. They do tend to price their cars above the market value to allow for haggling but the dealer still has to make money off it, selling it at a loss is a last resort otherwise he/she would be out of business doing that all day.

BTW I've no connection with the motor trade or never had, just have a realistic view of how things operate.

Del2005

Trojan wrote: »

For example, I'd have thought that I could offer to buy "as seen" from a dealer and get a discount based on the fact that there is no warranty cover for them to be concerned about. Or going the other way, offer more cash in return for 18 month warranty. Or some other factor.

Dealers can't do "sold as seen" to a consumer as the sale of goods act doesn't allow it, except in very limited circumstances where there is a defect marked on the receipt. You can nearly always buy an extended warranty but again the sale of goods act trumps this so they aren't really worth while.

Trojan wrote: »

One thing mentioned above is the market value of a car, and how that's simply what a buyer is prepared to pay. I wholeheartedly agree. I think there's a big different between someone making an offer of say €1100 on a €2000 asking price, compared to someone offering €150 on a €2000 asking price - the former may well be reasonable, particularly for a high tax former luxobarge (like Christy may have been looking at in his example above).

Would I get kicked out of a dealership for offering 55% of asking? Going by the above posts, that's a real possibility, even if it is the true market value of the car - because I'm a buyer with cash, and it's been on the lot for over a month.

The problem for some dealers is that no one knows the value of cars, especially big engined and/or petrol ones, so they may have over paid on trade in and if they let it go for less it'll be a loss on their books. If they leave it sitting on the forecourt it's an asset and the banks are kept off their backs for a few more weeks, if they sell it for less than they bought then they've no asset and a loss.

djimi

Trojan wrote: »

For example, I'd have thought that I could offer to buy "as seen" from a dealer and get a discount based on the fact that there is no warranty cover for them to be concerned about. Or going the other way, offer more cash in return for 18 month warranty. Or some other factor.

Its not legal for a dealer to sell a car "as seen" to a member of the public. Even if they were to sell it to you on this basis you still have the cover of the sale of goods act.

You could offer more for an extended warranty I suppose, but it depends on what the warranty is offering. Might make better sense to put the money aside to use if something goes wrong.

There are also third party warranties available from companies like Mapfre. How much use they are Im not sure.

Trojan wrote: »

Would I get kicked out of a dealership for offering 55% of asking? Going by the above posts, that's a real possibility, even if it is the true market value of the car - because I'm a buyer with cash, and it's been on the lot for over a month.

It depends on the car and on the offer I suppose. Offer half the asking price of something that will walk out of the dealership in very short time anyway and youre not likely to get too far. You probably wont be kicked off the premises, but the dealer is unlikely to take you too seriously going forward. It really depends. If youre looking a large engined petrol car that would be less desirable then chances are you will have a lot more bargaining power than if its a 1.4 diesel or something that will sell more easily.

Henry Ford III

Of course a dealer can sell a cheap car without a warranty or "as seen" to a member of the public. There is no such thing as a statutory minimum warranty.

Sale of Goods Act still applies but if the car is demonstrably cheap it's arguable how much redress could potentially apply.

djimi

There is no such thing as a minimum warranty, however legally a dealer cannot sell a car on the basis of them washing their hands of it once it leaves the forecourt. Youre right in saying that there might not be much recourse for an absolute banger, but the law still applies and if an issue arises that is covered by the SOGA then the dealer cannot turn around and say sorry, I sold it as seen.

Henry Ford III

djimi wrote: »

There is no such thing as a minimum warranty, however legally a dealer cannot sell a car on the basis of them washing their hands of it once it leaves the forecourt. Youre right in saying that there might not be much recourse for an absolute banger, but the law still applies and if an issue arises that is covered by the SOGA then the dealer cannot turn around and say sorry, I sold it as seen.

You're condradicting yourself there.

No warranty doesn't mean no recourse in the event of a problem. It just means there's no specific guarantee concerning any part of the car.

djimi

Im not contradicting myself at all. "Sold as seen" implies that a dealer can sell a car and then have no responsibility should an issue arise; whatever way you want to word it, the sale of goods act ensure that this cannot happen for a car that is sold to a member of the public.

Maybe I should reword it; a dealer can sell a car as "sold as seen" all they like, but it doesnt mean a thing legally.

Henry Ford III

djimi wrote: »

Im not contradicting myself at all. "Sold as seen" implies that a dealer can sell a car and then have no responsibility should an issue arise; whatever way you want to word it, the sale of goods act ensure that this cannot happen for a car that is sold to a member of the public.

Maybe I should reword it; a dealer can sell a car as "sold as seen" all they like, but it doesnt mean a thing legally.

Ah so it's a matter of interpretation then.

To me "sold as a seen" means the same as "no warranty". SOGA still applies.

djimi

I have always taken "sold as seen" to mean the same as a private sale basically; once the car leaves my yard its no longer my problem. In trade deals (where the SOGA does not apply) it means you are buying it as you see it and there is no comeback, so I always assumed it meant the same when a dealer tried it on with a sale to a member of the public.

Trojan

bazz26 wrote: »

I think some buyers may have a perception that just because they have cash in their hands they assume they can buy something for nearly half it's asking price.

I certainly would think that if I had cash in hand.

Pricing of anything in a free market is negotiable. If no other buyer has offered them asking their price X euros over the past 4-5 weeks, and I have cash in hand that I'm willing to pay 55% of X, then that is the market value, whether someone believes it should be worth more or not.

You could counter that with the point that the car would be valued higher if sold in another market (e.g. UK) - we see the export suggestion given quite often on the Luxobarge thread (example, example). Due to our wonderful tax system, >2.3L petrol cars appear to have true market values that are fractions of what they'd have elsewhere. If you were going to buy one, you'd be crazy to consider overpaying just because the dealer 'feels' it should be worth more. If it was, it would sell.

Del2005 wrote: »

The problem for some dealers is that no one knows the value of cars, especially big engined and/or petrol ones, so they may have over paid on trade in and if they let it go for less it'll be a loss on their books. If they leave it sitting on the forecourt it's an asset and the banks are kept off their backs for a few more weeks, if they sell it for less than they bought then they've no asset and a loss.

As a business owner I find it hard to imagine that selling for true break-even, or even a small loss, particularly when they've made the real value off the trade-up part of the equation, could be better than keeping a non-selling car for months and possible selling to breakers eventually.

Or am I incorrect, there is no real issue with keeping an overpriced non-seller on the lot for extended periods of time?

To me, it comes back to a simple decision: I'm willing to pay more cash than I feel a car is worth fair market value if I can realise some other value out of the deal (extended warranty, modification, etc), hence my original question - what would dealers be willing to negotiate on?

bazz26

Trojan wrote: »

I certainly would think that if I had cash in hand.

Pricing of anything in a free market is negotiable. If no other buyer has offered them asking their price X euros over the past 4-5 weeks, and I have cash in hand that I'm willing to pay 55% of X, then that is the market value, whether someone believes it should be worth more or not.

You could counter that with the point that the car would be valued higher if sold in another market (e.g. UK) - we see the export suggestion given quite often on the Luxobarge thread (example, example). Due to our wonderful tax system, >2.3L petrol cars appear to have true market values that are fractions of what they'd have elsewhere. If you were going to buy one, you'd be crazy to consider overpaying just because the dealer 'feels' it should be worth more. If it was, it would sell.



As a business owner I find it hard to imagine that selling for true break-even, or even a small loss, particularly when they've made the real value off the trade-up part of the equation, could be better than keeping a non-selling car for months and possible selling to breakers eventually.

Or am I incorrect, there is no real issue with keeping an overpriced non-seller on the lot for extended periods of time?

To me, it comes back to a simple decision: I'm willing to pay more cash than I feel a car is worth fair market value if I can realise some other value out of the deal (extended warranty, modification, etc), hence my original question - what would dealers be willing to negotiate on?

Most dealers have a fair idea of the market in which they are operating in. Occasionally they may get burnt on a deal or two but generally those buying and selling cars long enough know what price point they need to buy it at in order to sell it on at a profit and how achievable that is. They also have a fair idea of what sells easily versus what they would be married to. Some of them can afford to sit on stock longer than others until they at least get their money back on it. They would not be in business for long if they were buying cars in at x amount and selling them at -45% after a number of weeks just because someone appears at the door waving some cash. As I said if you go in expecting to buy a popular car for only 55% of the sticker price I think you will be waiting as the dealer knows he will get more from someone else. Look at buying something nobody else wants and you have a fair chance of achieving your target.

As regarding the market dictating prices, well I'll give you an example. BMW main dealers pride themselves in telling you that their used BMW cars come with a comprehensive 2 year warranty. However this 2 year warranty is factored into their selling prices. So the selling prices are technically the market value plus the warranty price. This also has a knock on effect on similar models being sold by non BMW dealers where they try to price their cars about €1k less than the main dealer.

Trojan

To summarise what I take from this thread:

• Dealers will normally price close to what they see as market value, and are unlikely to budge much on that, even if actual market value seems to be significantly lower.
• Dealers are unlikely to want to negotiate on secondary points like modifications, different warranty types (either extended or limited), or post-deal arrangements (e.g. free servicing etc).
• Buyer may simply need to walk away if negotiation fails to reach a price they're happy to pay.
• Private sales are the best option to achieve greatest value for money, but have higher risk.

Cleveland Hot Pocket

Pretty much it in a nutshell tbh.

Trojan

Just for interest, here's what happened the car I thought was well over market value at a dealer:

• It was originally priced at €2400 for 4 weeks.
• Price dropped to €2000 and after 3 weeks it was marked as sold (let's guess it sold for €1900 or so).
• It was then relisted for sale at €1600 and the listing text changed to included "sold as seen". Assuming warranty return.
• It has not sold since (a further 4 weeks at this stage).

My guess is still that it will eventually go at €1200-1400.

Cleveland Hot Pocket

Link?

Trojan

Will PM as I'm still interested