Im in the wrong business

[martyyn 2]

This X5 sold for 36k a couple of weeks ago at auction in Wellington. It needed a new set of rear tyres and a bit of a clean and the bloke at Turners told me the seller was very happy with the price.

So where the hell does a 14k markup come from !

[m_power 0]

Dealers are making bugger all at the moment. Trust me i work at one...

[kiwi535 538]

figure out how much it would cost to keep Jeff Grays new showrrom open,including the repayment to BMW who presumably financed it.14k wouldnt go far would it.

[zenetti 0]

rear tyres look to be horrendously undertyred - good luck with the repair bills when things start going wrong!!

[bravo 34]

Dealers are making bugger all at the moment. Trust me i work at one...

Hah is that what they told you when you asked for a raise?

[Nobimmer 694]

^^haha sorry kiddo.

Hot looking car though.

[Cale 36]

What kind of wheels are they? Alpina?

[edit] Alpina confirmed, just read the auction.

Edited November 27, 2007 by Quailboy

[zenetti 0]

What kind of wheels are they? Alpina?

yep Alpina, I had a great old time looking for tyres when Penry was looking at the car. No tyre dealer in the country imports 21" tyres except for the late model 7 series size which comes out as a factory 21" option. Obviously this is way too small to be on an X5

[m_power 0]

Hah is that what they told you when you asked for a raise?

Lol nope, i do the accounts...

[rxsumo 33]

Not as bad as the previous Wellington BMW Agent.

This is a few years back....

Guy walks into the dealership, and buys the top of the range 3 series touring for around the $110K-120K mark.

3 weeks later the guy gets offered a business opportunity in Oz and needs to get out of the Bimmer to finance the business.

Dealer....how much do you need for the business?

Guy...$56K by next Friday

Dealer...thats what we will give for your car.

Friend of ours is in the market for a new wagon, pays $56K for this wagon as the guy wasnt going to give it to the dealer.

On the next Thursday, dealer rings up the guy, and asks where the car is, as they have a buyer for it. They had sold at again at $90K.

Then the threats started when the dealer found out that the guy had sold the car on....sort of stuff like no warranty etc etc.

So they made a profit on the initial sale, and then were going to try and get another $34K from it three weeks later

So $14K on the X5 aint that much at all

Edited November 27, 2007 by rxsumo

[AntonyG 0]

Dealers are making bugger all at the moment. Trust me i work at one...

So true......

[bravo 34]

I know nothing about it, but I would hazard a guess that the current state of accounts at any car yard at this time of year would suck - just finished the slow winter period, and christmas is usually not a time when people or companies buy cars now is it? Car yards have hot and cold seasons I would imagine, and run properly the hots should more than make up for the colds.

Edited November 27, 2007 by bravo

[jpp 0]

I know nothing about it, but I would hazard a guess that the current state of accounts at any car yard at this time of year would suck - just finished the slow winter period, and christmas is usually not a time when people or companies buy cars now is it? Car yards have hot and cold seasons I would imagine, and run properly the hots should more than make up for the colds.

The dollar can't be helping, then they are bringing in restrictions on emmissions, not to mention the finance companies going under along with the larger than normal stock of cars most dealers have from when the Greenback was high.

[Greg111 13]

figure out how much it would cost to keep Jeff Grays new showrrom open,including the repayment to BMW who presumably financed it.14k wouldnt go far would it.

That place aint looking to good at the mo, taking a we while?? Ran out of money all together haha.

[martyyn 2]

My original question was how does two new tyres (which are obviously not the correct sizes) and a valet justify a 14k increase in price ?

E30-IS

Ive spent a long time looking for an e39 touring. I know exactly what they cost in Japan (Ive looked at importing one for 12 months) and I know whats being paid for them by Joe Bloggs aswell as the dealers. Ive seen dozens of cars at twice what it wouldve cost to bring over as long as the dealer doesnt get too greedy they should be making plenty of money.

Paul,

I know 14k wouldnt go far at Jeff Grey but they must be doing very well indeed to have built the new showroom in the first place. You dont move from the center of town out to the sticks and build something like that on a whim.

Daryll,

And car salesman wonder why they are so low in the 'trust' polls. I cant believe how many dealers Ive spoken to who claim they are the victims. 34k on a car at 120k vs 14k on a car at 36k....the percentages show the X5 way ahead of the touring. I wonder what the initial profit on the touring was ?

JP

The dollar might not be helping to buy cars this very minute, but alot of places are selling cars currently that they bought in Japan six or more months ago when the dollar was the other way and prices where much much cheaper. Give it a bit more time and the more expensive cars will start to come in, do you think the cars here now will stay the same price or go up ?

When I was looking at a particular X5 I got to know they guy pretty well. He does it on the side of his regular day job, has a Japanese wife (and family) that helps with all the auctions etc and although his cars are some of the cheapest in NZ he still makes at least 30% on what he spends. He only brings over a handful of cars at a time, advertises online only and has most sold before they even get here....now 30% for doing nothing more than sticking it on TM isnt too bad is it ?

[jpp 0]

My original question was how does two new tyres (which are obviously not the correct sizes) and a valet justify a 14k increase in price ?

JP

The dollar might not be helping to buy cars this very minute, but alot of places are selling cars currently that they bought in Japan six or more months ago when the dollar was the other way and prices where much much cheaper. Give it a bit more time and the more expensive cars will start to come in, do you think the cars here now will stay the same price or go up ?

I agree that it is "unfair" to charge such a large mark-up on something, but thats business. Did he buy the car in the first place though at a lower than market value? I'm sure the vehcile also comes with warranties and services, included in the sale price. And they will often welcome bargaining. Well thats exactly it, they are selling cars they bought when they were cheaper, but also bought MORE than what was demanded, hence supply is up (especially noted on E36s on TradeMe -- and I know its not a genuine marketplace). We should therefore see prices drop, or if the dealers all remain high, then some will simply go under! This will also be due to many other pressures on each company, including what I forgot to mention, oil prices.

[Braeden320 0]

Interestingly enough i went to a real estate auction yesterday with one of my clients..Was a car dealers lot.

He went under so had to sell the land before his bank did.

Needless to say,It went for 75k under RV, Absolute Bargin for the location etc.

There are many people hurting with the current interest rates and like you say JP,the price of oil.

[318Touring 40]

Also remember that the dealer has to pay interest on the money the borrow to buy the stock.

[Braeden320 0]

Also something to take on board is that if somthing goes wrong being a dealer they are obligated to sort it which costs $$$.

If they are smart they would put away a certain from each sale into an "Insurance" type account, then each time a customer comes back they can fix the problem without wrecking the weekly cashflow.

Basically insure the potential risk which is important when dealing in second hand cars.

It all adds up at the end of the day - Running a business isn't cheap.

[m_power 0]

Also something to take on board is that if somthing goes wrong being a dealer they are obligated to sort it which costs $$$.

If they are smart they would put away a certain from each sale into an "Insurance" type account, then each time a customer comes back they can fix the problem without wrecking the weekly cashflow.

Basically insure the potential risk which is important when dealing in second hand cars.

It all adds up at the end of the day - Running a business isn't cheap.

At the dealership i work at we give warrantys standard so that way we dont have to pay, but there are alot of dealers that dont.

[m_power 0]

Also keep in mind dealers have to pay for getting the car road legal, which is more than people think! and the yard hire and sales man commissions.....the list goes on.

[jpp 0]

Also something to take on board is that if somthing goes wrong being a dealer they are obligated to sort it which costs $$$.

If they are smart they would put away a certain from each sale into an "Insurance" type account, then each time a customer comes back they can fix the problem without wrecking the weekly cashflow.

Basically insure the potential risk which is important when dealing in second hand cars.

It all adds up at the end of the day - Running a business isn't cheap.

Wouldn't, if they were smart, continue to reinvest that money opposed to "storing" it? I guess it does depend on how much is in the bank to start with, and their current cashflow. Each business would be different, large - medium - and small.

At the dealership i work at we give warrantys standard so that way we dont have to pay, but there are alot of dealers that dont.

By we, you mean the purchaser or the company you work for? As if you mean we, the company, then they do "pay".

[m_power 0]

We pay for the warranty. As in our company.

Edited November 28, 2007 by E30-IS

[bravo 34]

Seeing as I never was in the debating team I'm about to contradict myself:

Was just thinking about the markup in the trades on materials (mechanics, plumbers, and sparkies etc) They are also around 30% plus they get return on labour. Yards only make profit on markup.

If you look at it like that, its entirely fair.

BTW, my charge-out is 300% of my wage. Even after you take out overheads, yada yada yada, I guess my boss makes a pretty good living. Good on him. He takes on all the risk. You don't hear me complaining if business is slow. I'm still getting paid...

Edited November 28, 2007 by bravo

[antony 0]

Bravo: Mines 350%, and I'm at work experience for a holiday job lol. Lucky I don't need a boundary redefinition a. But a good time to be a surveyor.

Wouldn't the emission laws help car dealers, as it targets old cars, and especially cars already in the country. So people will be forced to buy a new car. So they go to the car dealer. Who has imported a car that complies with the new laws.

Edited November 28, 2007 by antony