Price depreciation on trade-in

Discussion in 'General Discussion' started by whitters, Aug 29, 2011.

  1. whitters

    whitters New Member

    Messages:
    28
    Joined:
    Apr 8, 2008
    Location:
    Grt Manchester
    Car:
    ML Sport
    Price depreciation on trade-in
    Dear Members I would like to ask for comments/advice on my current dealings with Mercedes Direct.
    7 Months ago i bought a CLK 320 sports coupé on a 56 plate complete with all the whistle and bells. A very clean and tidy car with 2 year Tier 1 warranty Cost £15450
    Due to circumstances, I now am looking to change my car for something bigger so I have been looking at the ML range. I have always dealt with Mercedes Direct has this is not my first Mercedes and I have always been happy with the service so off I went to see what was on offer. I contacted the sales representative who had sold me the CLK and explained my situation and pointed him to an ML I had seen on the Web site. Now in the past, a small deposit would bring the car to my local Mercedes Direct garage to view and do the deal but not this time, the explanation given was that there was no money in it for them and I should could contact the dealership directly. I was disappointed on two fronts one the attitude and two it took a week of me chasing on the telephone to get them to give me the information.
    A sales representative where the ML was being sold from then contacted me. I give him my details and he said he would call back with a deal. The offer for my car was £9500 Yes a eye watering £6000 or approx. £1000 per month depreciation, doesn’t seem right to me. When I told the sales rep what I had paid for it he said “looks like you have been kicked in the nuts” umm yes doesn’t it.
    I know that the minute I drive out that the depreciation clock starts ticking but I did not think that it would need a lap counter on it!
    Well Bank holiday Monday and I am sat licking my wounds. What do you all think? Am I being unreasonable in thinking its worth more than £9500? Moreover, if not who should I vent my anger on?
    PS I Love the car just circumstances.
     
    1 person likes this.
  2. ucr

    ucr Hardcore MB Enthusiast

    Messages:
    1,073
    Joined:
    Dec 8, 2010
    Car:
    car
    Best thing to do would be to sell your car private and them buy the ML
     
  3. OP
    OP
    whitters

    whitters New Member

    Messages:
    28
    Joined:
    Apr 8, 2008
    Location:
    Grt Manchester
    Car:
    ML Sport
    Thanks UCR i may have to go that way. Its the depreciation that's under my skin and i can't itch it!
     
  4. JohnDeere8530

    JohnDeere8530 Hardcore MB Enthusiast

    Messages:
    505
    Joined:
    Nov 13, 2009
    Well that is how they make their money. Markup on sale and offer trade price on trade in. If you don't like it then avoid dealers by buying and selling in the private Market

    People use dealers for convenience and for security. However I feel a dealer offers little more in security than a knowledgable buyer in the private Market
     
  5. 124fan

    124fan Hardcore MB Enthusiast

    Messages:
    191
    Joined:
    Nov 13, 2005
    Car:
    1997 C250TD auto / 2013 VW Golf 2.0 tdi DSG
    I feel your pain, I recently had a similar shock and decided just to make do with the car I had. It really brings you to your senses when you see just how badly they depreciate.

    Cheers

    :crazy:
     
  6. Charles Morgan

    Charles Morgan MB Club Veteran

    Messages:
    8,207
    Joined:
    Feb 2, 2010
    Car:
    Mercedes 250CE W114, Alfa Romeo GT Coupe 3.2 V6
    Rain falls

    People die

    The sun goes down in the evening and rises in the morning

    Cars depreciate.

    Cars with things like two year warranties (that aren't cheap) bought from people who sell at high prices depreciate more.

    Petrol engined cars with poor economy depreciate even more when petrol prices are very high and most people are scratching around for a living.

    Sell privately if you want a good deal, but check out the prices on autotrader etc. Their offer is hardly ludicrous.
     
  7. MicB

    MicB Hardcore MB Enthusiast

    Messages:
    1,037
    Joined:
    Nov 2, 2010
    Location:
    Beckley, Oxford
    Car:
    MB SL500 (R230) 2003, MB SLK320 (R170) 2001, Volvo V70 XC AWD 2001
    6k differential in 7mths. is extreme......see what Al can do to move your CLK on, either as a broker or buying from you.

    Vehicle Sourcing Ltd.

    OR you may have someone closer to home to broker the car for you.

    Mic
     
  8. JohnDeere8530

    JohnDeere8530 Hardcore MB Enthusiast

    Messages:
    505
    Joined:
    Nov 13, 2009
    well, as I said, you have lost the dealer's profit on the original sale and lost the dealer's profit on trade in so you are on a lose lose situation. So in reality the car has probably only depreciated half the amount you suggest. Keeping the car longer would spread the dealers' profits (buy and sale) over more months and lower the deprecation/month slightly. #

    I for one never know why people buy from dealers especially s/h cars, there are so many at cheaper prices on the private market.

    Also never trade in, sell on the private market. If you had of bought on the private market and sale on said market now, you would of lost probably £2k max or if switched on I bet you may of even got in and out of that car for nothing

    Looking at the figures, I think you paid far too much for the car originally (compared to private market) and what they are offering now is not too far below what it is worth I am afraid. Put it down to experience. Forget the new car or buy it privately and sell your one privately to stop history repeating itself
     
    Last edited: Aug 29, 2011
  9. Setanta

    Setanta Hardcore MB Enthusiast

    Messages:
    945
    Joined:
    Feb 13, 2007
    This +1

    Hence why I will only buy privately
     
  10. markjay

    markjay MB Club Veteran

    Messages:
    23,149
    Joined:
    Jun 24, 2008
    Location:
    London
    Car:
    W204 C180 Executive SE 2013 Automatic / COMAND NTG4.7 and Morel speakers fitted by www.comand.co.uk
    The difference between the price that a dealer buys a car and the one he sells it for is not called deprecation, it's called gross profit...

    In this case, the actual depreciation over 7 months is probably only a relatively small part of the price difference. Another small part would be the additional owner on the V5 (and possibly the short period of ownership - 7 months - as well).

    The dealer will have several people spending several hours working on your car, valeting it, checking it mechanically, registering it in the books etc, then again when preparing your old car for collection by its new owner, plus the salesman time, salary and commission to consider when reselling the car.

    In addition due to consumer law in the UK, the dealer will be liable to any repairs within the first 6 months (after already having discharged this duty once with your 7-months old car). And, any MB sales warranty - including potential losses incurred if the next buyer hands the car back to them.

    And these are just the direct expenses... then there's the dealership's overhead. Rent of premises, business rates, electricity, water, telephone bills, admin and reception staff, cleaning, security, the tea and coffee customers drink... Each transaction going through the dealership should contribute towards covering this overhead cost. And have we discussed investment e.g. in equipment and staff training?

    After all this... there is the small matter of net (still, pre-tax) profit. Whoever owns the place has a family and kids and they all need to be fed and looked after. If he/she did not make a decent profit, they would not have bothered.

    So it does make sense to me. On your part, you could try and reduce the amount of money you hand over to the dealer by selling privately, as mentioned above by others. But it's your choice.
     
    Last edited: Aug 29, 2011
  11. Rory

    Rory MB Club Veteran

    Messages:
    7,265
    Joined:
    Mar 12, 2005
    Location:
    Cheshire, UK
    Car:
    C270CDi Estate (late 2004 facelift model)
    Even taking into account the comments others have made, that does seem extreme - especially bearing in mind MB Direct appear to have only one CLK 320CDI in the whole of their network, and that's a 2008 model for £19K.

    I suppose there's a £1K or so of cost for the 2yr Tier1 warranty when the OP bought his car - whether the dealer can get that back, or carry it forward with the car, I don't know.

    I guess the car might retail now for £13995, and perhaps discount it a bit to sell it so a reasonable buy price for the dealer might be around £11K. With the general slowdown in the market, you'd think they'd be keen to get good stock in.
     
  12. OP
    OP
    whitters

    whitters New Member

    Messages:
    28
    Joined:
    Apr 8, 2008
    Location:
    Grt Manchester
    Car:
    ML Sport
    Thanks for all your comments.
     
  13. markjay

    markjay MB Club Veteran

    Messages:
    23,149
    Joined:
    Jun 24, 2008
    Location:
    London
    Car:
    W204 C180 Executive SE 2013 Automatic / COMAND NTG4.7 and Morel speakers fitted by www.comand.co.uk
    An additional owner that had the car for only 7 months can have a detrimental effect on the dealership's willingness to re-sell the car. There would also be the additional mileage to consider (the OP hasn't specified mileage), to a point where the dealership may actually auction-off this 56-plate car rather than get it back in stock - a further loss that the OP will have to incur if trading it in.
     
  14. Red C220

    Red C220 Hardcore MB Enthusiast

    Messages:
    4,197
    Joined:
    Jul 30, 2011
    Location:
    Surrey
    Car:
    2015 SL400 : 2017 S6 Avant
    MB Direct is the retail arm of Mercedes, it is used to dispose mainly of management (staff) cars and I find them generally massively overpriced.

    It is often quite easy to find similar cars on Mercedes main dealer forecourts for substantailly less then the "direct" price.

    Take your car into a main dealer and go through the same process. If possible find a Mercedes Factory dealership.

    I did this when trading my ML to get the current C class I'm in now. As I buy outright the figures are more transparent and not lost in finance kickbacks.

    What I was offered in trade in differed by a total of £2000 between 4 main dealers. The Mercedes owned dealership (Croydon) always beat the franchises every time.

    What it comes down to is do they have a car available they want to shift and looking for a deal.
     
  15. OP
    OP
    whitters

    whitters New Member

    Messages:
    28
    Joined:
    Apr 8, 2008
    Location:
    Grt Manchester
    Car:
    ML Sport
    Thanks Red C220 Tried that yesterday but unfortunately the car had been sold on Saturday so didn't get round to giving me a price. I intend to try main agents over this week to weigh up my options.
     
  16. John

    John MB Club Veteran

    Messages:
    11,660
    Joined:
    Mar 3, 2011
    Location:
    Daan Saaf
    Car:
    I wish.
    I had a situation once where I bought a £30,000 car, and then the opportunity to buy a house I wanted came up two weeks later.

    Had I know two weeks before, I wouldn't have bought the car.

    However I did, but I took it back to the dealer to ask how much they would give me to buy it back?

    £22,000.

    £8000 in two weeks... I make that £16000 a month.

    Anyhow, I would rather have cut my own bolacks off than throw £8000 down the toilet, so I got a larger mortgage instead.

    :D

    Buying and selling through dealers gives you peace of mind.

    However, you pay a large premium for it and if you have to change quickly, you will always be rogered by them.
     
  17. paneraiseeker

    paneraiseeker Hardcore MB Enthusiast

    Messages:
    225
    Joined:
    Feb 28, 2010
    This is one reason when i buy a car i always use finance.
     
  18. Dryce

    Dryce MB Club Veteran

    Messages:
    6,883
    Joined:
    May 17, 2006
    Car:
    ..
    Buying a used car involves information asymmetry in the favour over the seller.

    Buying from a dealer offsets the risk associated with than and further buying approved further takes that offset a stage further.

    That offset naturally does not come for free.

    So it's down to the individual how much value/premium they place on it.

    Again selling privately - particularly a high value car - involves some risk (and possbly hassle and uncertainty).

    So ...... it's down to the individual how much value/premium they place on that and transfer to the dealer in exchange for a discount on the car they are trading.
     
  19. JohnDeere8530

    JohnDeere8530 Hardcore MB Enthusiast

    Messages:
    505
    Joined:
    Nov 13, 2009
    Yes but the OP was complaining about the size of the reduction in value of his car over a few months. So presumably he thinks that the reduction in cost might not = the savings in hassle etc.

    I still say anyone armed with some knowledge about MB cars and common sense can get themselves a better deal on the s/h market than walking into a main dealer. After all they are there purely to make as much money as possible and the many posts I have read on here suggest that top quality service and trouble free purchases are fewer and further than one might think by using a MD
     
  20. dulayj

    dulayj Hardcore MB Enthusiast

    Messages:
    539
    Joined:
    Jun 22, 2011
    Location:
    Near Winchester
    Car:
    A 210/Volvo XC90
    Yep -most cars are a guaranteed money loser-just enjoy them and move on when you can afford to:wallbash:
     

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.