Peter wrote:
No idea how many of these cars are bought on credit,
A friend of mine has run a number of Land Rover and Mercedes-Benz dealerships. He says upwards of 90%, usually around 95%. The really swish stuff (well above £100k) has a greater proportion bought cash as the customers tend to be very high net worth. But their ‘bread-and-butter’ £50k – £90k 4×4 is almost always on credit or leased.
Cash buyers are not as desirable for the dealer, because most of the money is made on selling the finance or leasing package.
MichaLSA wrote:
With one prominent exception: old Landrover Defender … some of the well maintained at around ten years old are back to a level near former selling price new.
There are always exceptions! That one is simply scarcity – they were never made in very large numbers, they suddenly became very cool for some reason and Land Rover stopped making them.
Cash buyers are not as desirable for the dealer, because most of the money is made on selling the finance or leasing package.
That’s true, the finance and insurance (F&I) guy is typically the most productive and best paid salesman in the store, and also BTW the most craftily deceptive when dealing with customers.
My solution as a cash buyer is to make it very easy for the dealer to make a relatively small amount of money. I find the car by serial number on line using the manufacturers website before I ever contact the dealer. Then when I call them, I speak to the fleet or internet sales manager and tell him the serial number car I’m interested in buying, that I’m (typically) 100 miles away but that I’m paying cash and will pick up the car that day. Then he calls me back quickly with an out-the-door price and if it works I go get it. The buying process at the dealer is under an hour.
Obviously this works better when inventories are not constrained by factory shutdowns as they currently are. Now is not the time to be buying consumer products, especially a car.
Silvaire wrote:
My solution as a cash buyer is to make it very easy for the dealer to make a relatively small amount of money. I find the car by serial number on line using the manufacturers website, before I ever contact the dealer. Then when I call them, I speak to fleet or internet sales manager and tell him the serial number car I’m interested in buying, that I’m (typically) 100 miles away but that I’m paying cash will pick up the car that day. Then he calls me back quickly with an out-the-door price and if it works I go get it. The buying process at the dealer is under an hour.
Interesting.
The actual, individual vehicle? I didn’t even know the manufacturers published production line info on their websites!
There is a similar thing here where you always get a good cash deal on something the dealer has on site, has no buyer for, and wants to shift. Dealerships are often located in fairly urban areas where space is at a premium and the pressure to get an unsold car off the lot can be high. However I am not aware of any method of finding what you’re after via this route other than by asking them.
Yes, the actual, individual vehicle and yes, it’s often a vehicle that’s hard to move because it’s e.g. manual transmission which is what I want. Some US manufacturer websites allow you to search dealer inventories over a specified geographic area, to find a car by VIN with the specification you want. I find four or five cars that would work, at multiple dealers within 150 or so miles. I then call them all for price, pleasantly letting them know that’s what I’m doing, but that they have what I need and that I plan to buy their car if they have the best price. If they won’t play they’re off the list, and they typically do play. The salesman can smell easy money. An advantage in the process of buying a new car versus a used car (there aren’t many) is that these are interchangeable units.
Of course the dealers don’t like the manufacturer making internet inventory searches available, they want to play games with you in the store to maximize their profit, but in this regard as in many others the manufacturers and dealers have a adversarial relationship.
A good friend of mine is partners in a large BMW motorcycle store, and many of the dealer/manufacturer conflicts are the same given that BMW now markets motorcycles like cars, including leasing and all the rest. After 25 years he basically hates BMW and the people associated with the manufacturer. It’s a rough business, the only thing that matters to most of those involved is money.
Interesting. The manufacturers in the UK don’t seem to allow you to do that – I checked a few websites and it’s all geared towards speccing your own vehicle (with a lead time) and selling you finance and extras. I don’t think the dealers carry anything like as much stock as they used to – most sales seem integrated with production and distribution, with two to three month lead times on an order.
Nobody picked up on my Q above so I spoke to somebody in the business.
Electric cars now have several years’ worth of data on battery life, so the finance companies are happy to put them out with a 3 years GFV (guaranteed final value) contract. After that they will take it back off you and auction it off, and it isn’t their problem after that. Beyond 3 years they don’t like the battery life risk; they will do normal finance but no GFV. Exceptionally they might do a 2nd 3 year term on GFV. Nobody wants to risk more than 6 years; there is no data, only extrapolations.
Peter wrote:
Exceptionally they might do a 2nd 3 year term on GFV
But I bet that GFV for the second term is extremely low, to the point that it becomes a very poor deal for the customer.
Yes it is, because a 6 year old car is worth a lot less – for all car types, electric or not.
Peter wrote:
Yes it is, because a 6 year old car is worth a lot less – for all car types, electric or not.
I mean even more so because of the uncertainty about the battery and the risk of the car being next to useless after six years, which is not the same with a non-electric car. A modern petrol or diesel vehicle is barely run-in at six years and 60,000 miles.
In any case no-one making money from the new car business wants long deals, they want short ones to promote churn and shift more cars.
