When is price fixing not price fixing?

[shrekky]

my previous answer was mainly about fixed pricing on new cars and not so much used ones,but it still happens

 

[neilrr]

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

I used to work for a well established high end classic car dealer in S. Kensington. The MINIMUM we needed to make per car to cover our overhead was £5K. We usually made more. I once made £14K on a £44K Stratos, £11K on a £23K Amilcar. On the other hand I only grossed £3K on a £150K 300SL Gullwing and £8K on a £140K 4½ Litre WO Bentley. It's expensive running a car business.

 

[mark.t]

A simple way to overcome the price fixing is to find a hungry dealer make a list of all you extras and tot up the prices......find the book price for your car and hey presto you have a figure....then toddle off to the dealers find a car you wish to deal on and let them make you an offer....when offer made hit them with the extras on your car and see what happens any excuses for the devaluing the extras or dismissing them can be applied to the one you are buying. what ever excuse they come up with for not offering extra doller on your car can be met with well whats the point of charging me for them on the new car then, if you smell a rat then walk away the only reason we don't is because we are already convinced we want that other vehicle .......my saying is "do things when you don't have to and do not leave until forced to"..that way the "Suits you sir" element from buying a car is removed and you are in full control...enabling you to walk away with a big smile on your face,anyway your driving off in a Merc so it can't be that bad. If enough people adopted this attitude then they would have re address the balance of their techniques

 

[fuzzer]

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.

you get nothing back for amg styling or anything like that

in fact , you never get any more money for extras , but if you don't have the right spec the price comes down. In Glasses guide it specifies what extras should be included.

E.g. Minimum spec to reach book price in an E class is prob :

Auto , leather , metallic paint and sat nav.

 

[IanA2]

you get nothing back for amg styling or anything like that

in fact , you never get any more money for extras , but if you don't have the right spec the price comes down. In Glasses guide it specifies what extras should be included.

E.g. Minimum spec to reach book price in an E class is prob :

Auto , leather , metallic paint and sat nav.

I'm not too sure about that, most of the dealers just wanted to know year, auto or manual, mileage and colour before giving me a price. The price offered was pretty much the same from six dealers. After being given the price I raised the issue of the extras, always got the same response, a shake of the head, and, quess what.....makes no difference to the price. I would be surprised if GG specifies "neccesary" extras for an SLK. Could be wrong.

 

[PAUL R]

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


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

This is why i do NOT Like/Own/ or entertain anything to do with bmw

 

[pammy]

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

I agree - they are in business and you are a customer. If you don't like it - walk away, but you have the choice as to buy or not and who/where to buy from.

Unless money is no object to you and you can manage cars as a way to make money - ie reserving new models to sell on at a profit etc then you are generally going to lose money as the punter.

But Price fixing however is underhand and not fair and open competition which is supposed to be the environment we live in, giving you the consumer that power of choice. If prices are fixed you lose that choice But you do still have the choice to not join in and take your business elswhere

 

[IanA2]

But Price fixing however is underhand and not fair and open competition which is supposed to be the environment we live in, giving you the consumer that power of choice. If prices are fixed you lose that choice But you do still have the choice to not join in and take your business elswhere

But that's my point Pammy, I did six times, and six times they reached for the Cartel enforcer.....I just can't see how that can be fair.

 

[Flash]

Stealers are thieves - when my car was less than a year old (9 months) and highly speced/immaculate condition with 3500 miles on clock, the Stealer offered me £8000 less then what I had paid and claimed to only offer £500 extra for the bi-xenons, PTS, upgraded alloys (sports suspension), CD Changer, SE PACK, Comfort Pack, MET Paint, AUTO, wood/leather steering wheel etc. I laughed and walked away...

 

[pammy]

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But that's my point Pammy, I did six times, and six times they reached for the Cartel enforcer.....I just can't see how that can be fair.

You could have gone to another marque - but the prices are set as guides in guides like Glasses and Parkers and it's what they all use so you can argue that's a cartel if you like - but it's the world of car sales. If you sell back to a garage they'll only give you trade figures.

It may not be fair - but it's trade and evident in so many walks of life - not just cars

 

[IanA2]

You could have gone to another marque - but the prices are set as guides in guides like Glasses and Parkers and it's what they all use so you can argue that's a cartel if you like - but it's the world of car sales. If you sell back to a garage they'll only give you trade figures.
It may not be fair - but it's trade and evident in so many walks of life - not just cars

Sorry I should have said: I went to Honda, Subaru, Skoda and several MB's. Same result all round.

It may be the way it is, but that does not mean it is right. In my original post I pointed out "the famous Antique Houses case" That was determined (ok by the USA Courts) to be price fixing. I can't see there is any difference.

 

[Benzowner]

Back to your original opening, you were mighty cheesed of at seeing your old car being sold for 5k more than you got for it. Were you satisfied with the deal you got? How much did you get off the car you bought? Did you consider taking the extras off and selling them seperately?

I would guess the answers are, yes I thought I had a good deal on the PX, if that is the case, there is no cause for complaint. Can't answere the second one, only you know that, but any discount given by way of added extras etc must be paid for and that would be out of what they make on your trade in, and the third one as with all of us, it was too much hassle to do.

When buying and selling cars, if you have a PX to offer, you are negotiating from a weak position. They have what you want, but you have something they don't necessarilly want, or if they do they will never say so. They are in the driving seat. But it is the route most of us take, it is convenient and for that convenience we pay.

Next time, sell your car privately first and go to the dealer with folding. You are then in a position of strength, he wants your folding and needs to offer something in return, discounts extras etc etc.

Put it down to experience and enjoy your new toy.

All the best

 

[pammy]

Sorry I should have said: I went to Honda, Subaru, Skoda and several MB's. Same result all round.

It may be the way it is, but that does not mean it is right. In my original post I pointed out "the famous Antique Houses case" That was determined (ok by the USA Courts) to be price fixing. I can't see there is any difference.

Ok - devil's advocate hat on here - you could argue that it is fair as they all take their price from a readily available guide rather than make it up as they go along. You can buy Parkers and get online val's which would have also given an indication of what you could expect.

It's a well known fact that extra's might cost you but you might not get that back as they may not be what the next owner actually wants. Some are considered essential for resale - colour, leather etc but that's the a fact of life with cars, it's nothing new

The guide is just a guide tho - they don't have to use - but they choose to.

 

[IanA2]

Back to your original opening, you were mighty cheesed of at seeing your old car being sold for 5k more than you got for it. Were you satisfied with the deal you got? How much did you get off the car you bought? Did you consider taking the extras off and selling them seperately?

I would guess the answers are, yes I thought I had a good deal on the PX, if that is the case, there is no cause for complaint. Can't answere the second one, only you know that, but any discount given by way of added extras etc must be paid for and that would be out of what they make on your trade in, and the third one as with all of us, it was too much hassle to do.

When buying and selling cars, if you have a PX to offer, you are negotiating from a weak position. They have what you want, but you have something they don't necessarilly want, or if they do they will never say so. They are in the driving seat. But it is the route most of us take, it is convenient and for that convenience we pay.

Next time, sell your car privately first and go to the dealer with folding. You are then in a position of strength, he wants your folding and needs to offer something in return, discounts extras etc etc.

Put it down to experience and enjoy your new toy.

All the best

When I was given the price I said it was rediculous as he would have it on the forecourt a week later at £25K. Oh no says he, we would never ask a price like that. Quess what?
I did try and get the Bose out but I was told it was not possible. I could have taken the AMG alloys but would have to have bought new wheels. As for the xenons, leather etc.......
I didn't think the deal on my new car was particulary good, I thought it was as good as I could get. The deal did not fill me with joy.
I've tried the cash approach on dealers before. They don't like it. They make even more money on finance deals.
Convenience is one word for it. Seriously sharp practise is another, albeit longer description.

 

[IanA2]

Ok - devil's advocate hat on here - you could argue that it is fair as they all take their price from a readily available guide rather than make it up as they go along. You can buy Parkers and get online val's which would have also given an indication of what you could expect.

The guide is just a guide tho - they don't have to use - but they choose to.

The BMA used to publish a guidance on the suggested range of charges members should make for their services. This was withdrawn as it was adjudged to be illegal.

 

[rees_A]

If a dealer do not offer you what you consider to be the current value for your vehicle, sell it privately through e-bay, Autotrader etc. You know if you p/x your car you will be ripped off. They need to make a profit and allow for any servicing requirements within the sales price. I'm sure there will also be some sort of tax liability that the dealer will need to pay on completion of the sale of your car. also, it may have been advertised at £5k more than you paid, but do you know the actual sales price?

 

[Mr E]

Your issue seems to be that dealers use Glass's to give them a price......not whether you got a good deal or not.

The operative word is "guide" - although quite a few people in the car sales industry use it as a bible. The usual case is that the dealer management will set ceilings/floors against which individual sales guys can operate. For example, most dealers wouldn't allow a sales guy to buy in stock, especially on PX, at more than a Glass's value.

In the antiques trade, there is a trade version of "Miller's" I believe that gives an indication of what is selling for how much - to be used as a guide by dealers. Is this price fixing?

Estate Agents use other agents, papers, etc, to help them assess the value of a house. Is that price fixing?

Extra's are always a bone of contention - if I'm speccing a new car to what I want, I expect to pay. But why should I pay for extras I may not want when purchasing second-hand? That's the view of the trade - and when the must-have extras are not there you will either see the price reduced or have something to negotiate upon.

The price-fixing case in question in the US was an agreed scheme between auction houses to fix the valuation of items at a reduced value to then inflate the commission they receive on sales. It's entirely different to a dealer looking at a price guide and sticking to that for valuation.

And please don't call dealers "thieves" because they mark down the price of a car by a huge percentage in the first year - the market does this (would you pay nigh-on list price for a used car?), and there is no real benefit to the dealer (they don't make more money on newer, used cars in percentage terms). In fact, it works in the opposite way - cars that depreciate more have higher fleet costs (which is where much of the money is taken anyway), and they have a lower perception in the marketplace.

 

[glojo]

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.

Hi Ian,
I am having trouble understanding what your real complaint is. When you decided to sell your car, did you have any idea what price you would accept for it?

Did you have a new car in mind and a price for that?

If the dealer offered you £2000 less for your car, did you try offering £2000 less for the car you intended buying?

If you were unhappy with the price the dealer offered for your car, did you try selling it privately?

If you don't like the idea of a private sale, then you cannot complain about the price the dealer offers??

If you could not get your asking price when trying to sell privately, then it might indicate the dealer offered a realistic price?

I am never interested in what price my traded in car sells for! I am interested though in getting the best deal possible. If I don't get this deal, then I simply walk away.

Never get up tight over issues you have no control over, but never give your car away!!

We all sometimes rant about dealers, but I don't think I have read any posts which disclose their overheads!!! Sales staff might get a commission on what comes in, or goes out, but look at all the admin staff, cleaners, drivers, heating bills electric bills etc etc. I am not defending dealers, I am merely saying they have to make a profit and this comes from the buying and selling of vehicles.

Don't look at the price of your old car, look at the price you negotiated for the new one and all the plus points.

If the dealer had gave you £2000 more for your car, but then charged £2000 extra for the vehicle you bought, would that have made you happier?

I am not criticising you, I understand where your coming from, but I feel you were in charge of the whole situation and did not have to sell the vehicle to that specific dealer?

I am sure you shopped around, and Glass's Guide as has already been said is merely a guide. I assure you, if your car looked tatty, was high mileage and generally neglected, you would have seen a different figure to the one you were offered. By having this guide you can at least calculate a rough figure for making a decision on whether to sell your car or not.

Have a nice day and unlike me, do not get sun burnt

Kind regards,
John
A very hot sunny day in Torquay

 

[Sp!ke]

What gets me is labour rates....

I know of no other industry where you get charged for the book time for a job and not real time.

The book time maybe 1.5 hours but the mechanic knows how to cut corners and does it in 40 minutes but you still get billed 1.5 hours whilst on the other scale if the mechanic ran into complications and the same job took three hours.... you get charged for the full 3 hours - grrrr

It gets even more frustrating when you analyse a service bill and they billed book time seperately for each job where the items changed require the same parts to be removed therefore billing for the same parts to be dismantled more than once.

and dont get me going on +£100 per hour labour rates when the guy set loose on your car is on a YTS scheme... I know barristers that bill a great deal less.

 

[Mr E]

I do this all the time - it's called "Fixed Price" work........if I can deliver in better time, I win....if it takes longer, I lose - unless I can do a change order .

The Benz is a contract vehicle, but on wifey's car I refuse to pay for any extra work I did not authorise - the local Vx garage does menu pricing and has learned the hard way that, if the price is to be exceeded, I need to authorise it. They screamed, I stood my ground. Still got excellent service on my Omega, wifey still gets excellent service, we all know exactly where we stand.

Remember - you need to set expectation on BOTH sides.

Labour rates - my co charges about £2.5k per day for my time (about £350/hr)- am I worth it? (More to the point, wish I got paid it!) Who knows, but you get industry-specific knowledge, global corporate backup, and a nice smile . What "should" you get for you labour rate in the dealer? Marque-specific knowledge, manufacturer-imposed training, specialist tools, warrenty on work, etc. Unfortunately I know the lease company who supplied my car get a minimum 50% off the rate - and most of the big fleet suppliers do the same. So it's the individual, who has no buying leverage, who pays the higher price to build back the profit margin. Fair? Sorry, that called a market........