When is price fixing not price fixing?

[IanA2]

I am mighty cheesed of having just seen my (ex) 03 plate SLK320 on a main dealer's forecourt for £5K more than he gave me. Not that I'm surprised, but when I was hawking it about the first thing each dealer did was to reach for the famous guide, or should I say cartel enforcer.
Two very famous Antique dealers were fined gizzillions for, as I understand it, setting prices. Why is the car trade different? The BMA cannot advise it's members what to charge for services, why is the car trade different? Have I missed something? I hate Stealers.

Rant over.

 

[smartbrabus]

The purchaser is within his/her rights to haggle the screen price down, so its not "fixed" per se...

The stealer will always win, as long as people are willing to sell them cars at a loss and as long as there are people willing to buy them at inflated prices

I hate stealers too...

 

[Brian WH]

I am mighty cheesed of having just seen my (ex) 03 plate SLK320 on a main dealer's forecourt for £5K more than he gave me. Not that I'm surprised, but when I was hawking it about the first thing each dealer did was to reach for the famous guide, or should I say cartel enforcer.


Rant over.

It is called their "Profit Margin" mate. They are now guaranteeing the car and would have to live with any problems, so fair enough I suppose eh?

 

[IanA2]

It is called their "Profit Margin" mate. They are now guaranteeing the car and would have to live with any problems, so fair enough I suppose eh?

I'm not so sure about that. They are selling (in fact I think sold) it with a 12 month warranty. That's what's left of the original warranty (which I paid for !) so where is the justification? And what about price fixing?

 

[Brian WH]

I'm not so sure about that. They are selling (in fact I think sold) it with a 12 month warranty. That's what's left of the original warranty, so where is the justification? And what about price fixing?

There is always a difference between the Dealers buying price and the retail price. That is why you get more money selling privately. Lets face it, we go to the dealer to swop our cars in as a quick fix, no hassle solution. That is why we get less from them normally.

 

[IanA2]

There is always a difference between the Dealers buying price and the retail price. That is why you get more money selling privately. Lets face it, we go to the dealer to swop our cars in as a quick fix, no hassle solution. That is why we get less from them normally.

I accept that....to a point, I still think there is an issue regarding "guide prices", I may be wrong but in most of Europe used cars are valued and priced on their condition and specification, not strictly on a book. How can thousands of pounds worth of "extras" be suddenly worthless? Because the trade says they are and they make even more profit. Institutionised theft!!

 

[Brian WH]

I accept that....to a point, I still think there is an issue regarding "guide prices", I may be wrong but in most of Europe used cars are valued and priced on their condition and specification, not strictly on a book. How can thousands of pounds worth of "extras" be suddenly worthless? Because the trade says they are and they make even more profit. Institutionised theft!!

Agreed mate. The extras issue is a whole new discussion though. There are a few extras that count, like metallic paint, autobox, and AMG styling. But other than that the price as you say is the price until they sell it on to a mug who knows no better and pays "extra" for the extras.

But we would do the same when selling privately would we not.

 

[shrekky]

I think you are spot on ian..............there is price fixing in the car trade and a number of tv programmes have proved it,especially with high end performance cars,they went around the stealerships and tried to get cars for cheaper prices and even had recordings of the stealerships being told by the car makers that they can not ! sell the car for less than what they had set the price too,.............a highlighted case was a reporter tried to buy a MGF,went to japan and bought a one there,paid shipping costs and import tax,and it was still 6 grand cheaper than buying it here !..yet it was made here and shipped there !!!!........and unfortunately MB aren't immune to it either,he went to europe and bought a high end merc for 20 k cheaper than in this country,and there was a couple of stealerships told him,they were told by MB not to sell to english customers unless they proved the lived in europe.
at this point i must say some of the stealerships were willing to sell the cars for lower prices but weren't allowed and some were evn threatened the withdrawl of the franchise.
so yes there is price fixing going on...............well lets put it this way if a company like nissan can hold the goverment to ransom,anything can happen.

 

[IanA2]

Agreed mate. The extras issue is a whole new discussion though. There are a few extras that count, like metallic paint, autobox, and AMG styling. But other than that the price as you say is the price until they sell it on to a mug who knows no better and pays "extra" for the extras.

But we would do the same when selling privately would we not.

Mine had/has Auto/Tip, Metallic paint (you know the top seller, Black) AMG wheels, Leather electric heated seats, wood trim, Bose system, bi-xenon washer lights. Did I get a penny extra? I got the "book" price. It's a cartel.

 

[Guy]

Isn't the difference that price fixing between independent organisations amounts to a cartel, which is generally unlawful?

However, one manufacturer issuing guide prices to its dealers is a different kettle of fish, and is probably the whole reason behind DC taking over the independent dealerships...to keep up the residuals -cars worth 50% plus after three years, and to maintain the perception of no [or very little] discount etc etc., You can only do that if you control the outlets...and they do...

 

[IanA2]

I think you are spot on ian..............there is price fixing in well lets put it this way if a company like nissan can hold the goverment to ransom,anything can happen.

Now I think we are in danger of mining a rich vein of possibilities......

 

[IanA2]

Isn't the difference that price fixing between independent organisations amounts to a cartel, which is generally unlawful?

So if all the independent organisations quote the same price for a used car.........?

 

[Guy]

then its a cartel - but not necessarily if an MB dealer simply follows the MB guidelines,

I would think, anyway

 

[C240Sport97]

I sympathise with you, but it's down to supply and demand at the end of the day. The old SLK and many other MBs are just not as desirable these days. There are lots of things to tempt the consumer, and as a result, dealers are vary of taking on stock without a 'fat' cushion. Out of the £5k difference, he has to pay for his massive overheads, and a discount (no one really buys a car without a discount these days, or do they ), and also the MB Approved Used Warranty.

it's not price fixing (certainly not in "against the law" sense) because:

a) you are not compelled to sell to a MB dealer, you can sell it to anyone else, including a non MB dealer and a private person. Therefore, you have alternatives; and

b) the dealer is not compelled by anyone (apart from their own greed) to follow the price in the trade 'black book'.

If there was a shortage of supply, say like a Aston Martin DB9, then it's an all different ball game.

 

[neilrr]

It's the open market and capitalism at work. Presumably you approached the dealer, the dealer made you an offer, you accepted it. That's all she wrote. If you thought it too low you were under no obligation to accept and could have sold it privately.

Sorry, but that's the way it works.

 

[IanA2]

MB Approved Used Warranty.

Sorry the only warranty they were offering was the remainder of the one I paid for

it's not price fixing (certainly not in "against the law" sense) because:


the dealer is not compelled by anyone (apart from their own greed) to follow the price in the trade 'black book'.

Every dealer offered pretty much the same price, MB dealers and others, that's where the cartel comes in as I see it.

IQUOTE]

 

[IanA2]

It's the open market and capitalism at work. Presumably you approached the dealer, the dealer made you an offer, you accepted it. That's all she wrote. If you thought it too low you were under no obligation to accept and could have sold it privately.

Sorry, but that's the way it works.

It is not an open market if the used prices are fixed.

 

[Robbo]

well the dealer has to pay for the expensive new glass and chrome showrooms somehow!

 

[IanA2]

well the dealer has to pay for the expensive new glass and chrome showrooms somehow!

Quite!

 

[Will]

Has everyone forgotton that the dealer is there to make money, they are not just a mate of yours!

Now if he has a two year old SLK up for ~ £5K more than you were given, I would say that was about right. The dealer has to prepare the car, keep it valeted, store it, present it, deal with all enquiries/customers/test drives/paperwork/arrange finance etc etc. They also take on any risks involved including insurances etc. They might not even sell it for months.

After all this, they will most likely be knocked down on the price anyway - it's not as if they will make £5K for nothing (and will probably not make £5K anyway)

Does anyone complain here about how new models are too expensive and that dealerships are making too much profit on the new models that they sell? (on second thoughts, probably yes!)

I would say that on some luxury/specialist vehicles the profit margin would be far greater than this - £10K+ is not unheard of.

Will