Impulse buy Or not as it turned out!

[pepper&boulou]

Today I was out getting some decorating materials that I needed. On the way out of the store my attention was drawn across the road to a mercedes w210 estate turbodiesel avantgarde that was on a dealer's forecourt (non MB). On spending some time investigating the car I had decided to take it further as it looked great for the price £14,000. So out comes the dealer and he first asks what I would be trading in I told him that i would make my own arrangements to dispose of my current E class. He then went on to say that he could offer finance for the balance. I then told him that I aiready had the available funds to purchase the car outright. This is where it all went pear shaped. He said that the w210 was a rust bucket and that he would not be selling any more of them as he has to spend a fortune having them painted. He then tried to flog me a c250 estate turbodiesel instead same year "W reg", I pointed out that I wasn't interested in the c class as it was smaller and anyway my next door neighbour has one He then tried to interest me in an Audi diesel, I replied that i wasn't trading down to a Audi, I like the E class and will settle for nothing less and I wanted a test drive in it. He then said that he could not give me as good a deal on it and was evasive on me test driving it. I told him that if I liked the car I would pay what he wanted for it needless to say I didn't get the test drive

 

[sym]

How strange !! Perhaps he knew that there were some problems with it, and given that you knew what you were looking for, and what you were talking about - he would rather have sold it to somebody that didn't !!

S.

 

[GrahamC230K]

Visited many dealers this last month and not had that sort of reaction!!!


Funny how some dealers interogate you prior to a test drive, others offer no sooner than you have glanced at a car.

The same for finance, some want to analyse your bank statements to see how much you can spend, others don't want to know unless you act like you are buying out right and the cost is small change in your pocket.

 

[GrahamC230K]

Just remembered this one, seems like the thread to share it.

I went to look at some Audi's last weekend. I went to an independant that had a couple of used S4's in stock, in particular one on 31K miles at about £17K.

When I got there the 31K miler was not on the forecourt but at their alternative storage. However a 50K mile example was and so I asked for a look around it as it was the first S4 I would have had a close look at, so any would do.

I commented to the saleman about some pretty major wear marks in the leather on the steering wheel. He didn't really comment. I repeated myself, adding how my car with 85K miles is absolutly mint inside, I mean no wear signs like that at all and was that usual on an Audi for 50K miles.

He said and I quote "You get these track days now don't you. Probably worn out by a pair of racing gloves".

I declined test drive and left in amazement.

 

[jimmy]

With no trade in and no finance the dealer is only making money on the car he is selling. Garages make a lot of money from the commission on finance, so by saying you were a cash buyer you wiped out his extra profit.

It seems odd but quite possible.

 

[Andy W]

He probably only works there as a salesman and his boss said if it doesn't sell in the next week you can have it for yourself at cost price....he knows a bargain when he sees one.

 

[kikkthecat]

I'm with Jimmy on this one, the guy didn't want to sell the car only the finance. Happens all too frequently.

I took my brother in law to see a car and when the guy found out he wanted to pay cash refused outright to sell it to him.

We then went to a big car superstore just off the M62 and found you can look round outside all day but you cant even get into the showroom without giving them enough details to run a credit check. Needless to say we didn't go inside.

 

[jimmy]

I went to a really big, local car superstore, they would not let you test drive until you agreed that you would buy the car and unless you said you were going to do a deal today the salesmen would walk away to find another punter. Commission sales for you!!

Also, another similar car superstore had 6 x 1999 Golf TDi's advertised 'from £3995', when we got there thay had strangely sold those six but had plenty more from £8995'!! yeah right!

 

[Satch]

Recently purchased a 4x4 to add to the collection of metal on the driveway as we find ourselves having to navigate some pretty grotty flood prone mud laden back lanes and unmade roads on a daily basis. (My wife wanted a Toyota RAV4 but once I gently pointed out in clear terms that I would not be taken for a hairdresser and floated the idea of a Landrover Defender or perhaps importing a Hummer H2 we ended up with a Landcruiser although sadly not an Amazon)

Did not need the finance so they offered a "cash conversion" in return for an extra discount on what was already a pretty good deal. They would arrange finance at a rate way below that which I currently get on a cash savings account. Pre tax that would result in about a £1.2k saving over 3 years on current rates. So you ask, why eager to give it away?

Answer is a little bit depressing. Much of the cars sales industry is driven by commission but equally finance drives the manufacturing end as well. Amongst the biggest banks in the world by lending volume are Ford Motor Credit and The General Motors Acceptance Corporation.

That also drive a big chunk of the Securitisation industry. In short, these lenders package many loans up into big chunks and sell them off to a Special Purpose Corporation. The SPC has issued bonds to raise the dosh to buy the loans in the first place and pays out to the "A" bondholders a much higher rate of interest than they could otherwise get. The "B" bondholders are usually linked to the lender or car maker and stand to make a superprofit if borrowers do not default. So:

Maker wants to flog more cars

Punter gets cheap finance

Dealer gets Commission

Lender makes a spread and/or

Lender sells loan off to the SPC and so gets their cash back (to lend again to more punters or to finance car maker)

SPC issues bonds and makes a spread

A Bondholders get higher rate of interest

B Bondholders (indirectly linked to car maker or lender, remember) stand to make a big profit because they take the main risks of punter going belly up and defaulting on loan

So when it was said a while back that Ford, GM, Daimler Chrysler, Toyota etc are really banks with a car maker attached, really that is not far from the truth. Another reason why volume is so important to them and in part why MB tried to ramp up sales at expense of quality for a while.

 

[adam1]

So which LC did u get? And hows the drive cf to your MB

 

[Satch]

So which LC did u get? And hows the drive cf to your MB

LC3 5 door 3.0 Diesel auto. Will be delivered on a 54 plate so no long term experience yet but I did have 3 days on a test drive.

There is no comparison to be made between a W211 E320 Cdi and an LC3. They do different things in different ways.

But compared to an M Class I think the LC3 is better for my purposes even if rather ugly.

Since I will be keeping the E class I see no problem!

 

[NormanB]

[snipped]
So when it was said a while back that Ford, GM, Daimler Chrysler, Toyota etc are really banks with a car maker attached, really that is not far from the truth. Another reason why volume is so important to them and in part why MB tried to ramp up sales at expense of quality for a while.

Thanks for that - interesting.

Another take on this is that most big companies are pension funds with an operating division attached. British Airways for example, their pension fund is worth more than the operational assets - (or so actuarial legend has it).

 

[marc777]

I bet the car was being used by him privately and he genuinely didn't want to see it go. Also gives him the chance to use it as a loss leader, and not paying tax on his "company car" which no doubt he drives howm at the end of each day.

Marc

 

[pepper&boulou]

No marc he had a 51 plate xj jaguar for his own use. I guess he didn't like the look of my face ,but its his loss.

 

[Satch]

Thanks for that - interesting.

Another take on this is that most big companies are pension funds with an operating division attached. British Airways for example, their pension fund is worth more than the operational assets - (or so actuarial legend has it).

Oh yes. But allow me to get my very tall soap box out. Here is an extract from an article:

"It is the long held belief of many people, mostly drawn from the ranks of those who have observed their antics at close quarters, that some Insurance, Pensions, Fund Management and ancilliary businesses contain amongst the worst examples of a self serving greed and wilful ineptitude on the planet. They underperform, take mighty fees along the way, surround it all with mystery and then expect gratitude & respect.

They may be regulated and play by the letter of the Financial Services Act but some of them could not run the proverbial in a brewery. On any rational analysis some clearly have no interest in the end user of their product or service other than to extract money from them.

Any Pension Fund knows it has to pay out on a Bond-like profile: the fund knows how many pensioners it has or will have, how much they have to be paid and can therefore project the fund liabilities over time quite accurately.
So the Boots Pension Fund properly in their view switched entirely into Bonds & fixed income securities which have a regular payout and a known terminal value. This enables the matching of income with expenditure & assets with liabilities and offers a degree of insulation from market downturns.

But generations of Actuaries, Fund Trustees, Investment Managers and others have elsewhere insisted on stuffing Pension Funds with excessive percentages of volatile Equities and then compounding the folly by valuing these assets and their yield on a rather optimistic basis.

So in a sustained rising market the employer companies could then consider their pension funds were "overfunded" and take contribution holidays and all were happy. Easy money. But when the markets took a dive, Shock/Horror headlines: we suddenly have a "pensions crisis" which of course nobody could possibly ever have forseen. Ah cruel fate. Woe! Misery! How could this be so?

Certain life companies who had foolishly written pension and annuity business on the books folded. Others cut their payouts and annuity rates. Companies were having to put extra contribution into their Pension Funds. Insurance companies were having their solvency margins under the microscope. Pension schemes were closed to new entrants. Labour voters and Trade Unions were unhappy. Something must be done!

And so, just to show there is no problem that this largely ignorant Government cannot make worse through the toxic habits of not listening, gesture politics and spin, we thus have the gargantuan new oxymoron of "Pensions Simplification" foisted up us.

This is so hugely complex, badly drafted and in general botched that the industry will become even more opaque to Joe Public and will most likely give a worse deal in the process. At the same time it actually creates new opportunities for abuse. No doubt we will soon hear the trumpeting of yet more "anti-abuse" legislation to strike down evil-doers when the Treasury finally twigs what all this really means.

But in the meantime it will soon pass smoothly into law because nobody is prepared to publicly admit they have created yet another unworkable monster and will have to spend the coming years sorting it out.

You could not make it up."

I will second that

 

[uumode]

No marc he had a 51 plate xj jaguar for his own use. I guess he didn't like the look of my face ,but its his loss.

Perhaps he had already sold it.

 

[jaymanek]

it will be the finance thing, why make a few hundred quid, when some local dreamer will stroll in, buy it on finance, buy extra warranty, pay for a service etc etc....

jay