How are people affording cars?

[ChocAndGray]

don't they have a checklist, or, is a competent mechanics time too expensive to have them check it ; if you resell it how much of the £3K then represents the warranty cost;
- that's my concern of this cazoo model, you buy anonymously a liability, apart from their inflated prices and poor AT pictures.

Sales executives at our company do everything on a tablet, they have sections to mark for damage which opens up the camera app to then take pictures of said damage. Sections to fill in tyre tread depths etc. When a business manager or sales manager prices the car they can open the appraisal and see pictures etc

Most sales execs simply ask whether the car has a full service history and 2 keys, very rarely do they probe deeper, like finding out whether it's chain driven or a timing belt and then asking if it's been changed, or checking tyre tread with a gauge. Cars of a certain age are generally due a timing belt change if they have one. All they'd need to do is ask the service department or a tech to check whether the car has one or not and then ask the customer. If they can't provide proof it's been done it could be reflected in the trade in price offered.

We don't have anyone to check the car over at appraisal stage. What happens is we bring a car into our stock and then the service department do a multi point check. It's at that point where if the workshop are trying to charge us £2000 prep we weigh up whether it's worth just trading the car out. We took a mini in recently and it needed a new clutch, this would have been known had it been driven at appraisal stage as it was obvious immediately.

Sales people are meant to drive the cars, but how many people in this thread have had a sales executive go round the car thoroughly, check tyre tread, drive the car, feel brake discs for lips etc.

Most don't even take the customer out with them, have a quick walk round for major damage, open the car to check the mileage (as many show the mileage without even starting the car) and job done.

Even trivial things can end up costing us a fortune, a car without a parcel shelf can cost over 100 quid. Trying to get in contact with the customer once they've picked up their new car to get it can be a hard task too. The lack of a second key is a common one too and that can cost over a couple of hundred pound.

With regards to warranty we only give a standard 3 month warranty on anything which is out of manufacturers warranty which is the legal requirement. We do sell extended warranty, and the mark up is about 50%. We sell a 3 year warranty for £599 and it costs us £280. But that's not a cost taken into account on prep as it's an extra.

The biggest margin is on the paint protections, as I mentioned previously it costs us £28 quid for the diamondbrite kit and we sell it for £299.

 

[Jonny ///M]

You are never going to buy a car if this is what you think. There has to be a difference between trade in value and dealer retail value. Trade in value is the amount offered unseen to a car they make a number of assumptions about. Dealer retail price is the price after the dealer has purchased that car, prepared it for sale, paid VAT on the margin, made an allowance for any issues that may arise after the car is sold to you which they might be liable for, a contribution towards the costs of running the business and finally profit. On a £17k car it is completely reasonable that this difference would be around £3k to cover all this. Why would you even bother for less than this? It'd end up costing you money to sell cars!

If you don't like that then stop viewing cars at dealers.

Sorry I'm not great with English.

This is a private seller asking over £18k originally. It's a cracking car with a good spec(HK,pro nav, panaramic roof and adaptive lights etc).

I totally get dealers have to prepare a car and you pay more for a privilege. I've come across BMW dealer F11 into the mid £20k as they are typically lower mileage and late plates.

 

[Relentless81]

I'm noticing more and more Tesla's where I live, over the road has one, on the connecting roads they are popping up on drive ways at an interesting rate so I had a look at the Tesla website yesterday and the cheapest Model 3 is £45k

I live in a decent area but I can't afford £45k for a car, without reading the rest of the thread because I'm sure it's already been discussed I find it odd how these are popping up all over the place especially when on the Tesla website it says "continue to payment" as if you were buying something for a tenner, I think I'm out of touch because my experience of buying cars from a dealer it takes half a day and is filled with paperwork

 

[Deleted User 298457]

I'm noticing more and more Tesla's where I live, over the road has one, on the connecting roads they are popping up on drive ways at an interesting rate so I had a look at the Tesla website yesterday and the cheapest Model 3 is £45k

I live in a decent area but I can't afford £45k for a car, without reading the rest of the thread because I'm sure it's already been discussed I find it odd how these are popping up all over the place especially when on the Tesla website it says "continue to payment" as if you were buying something for a tenner, I think I'm out of touch because my experience of buying cars from a dealer it takes half a day and is filled with paperwork

Equity in their part ex quite favourable though. Plus the future cost saving on fuel.

 

[Relentless81]

Equity in their part ex quite favourable though. Plus the future cost saving on fuel.

Yeah for some, over the road had an old XC90 I think it was, round the corner a Polo I guess around 4/5 years old, if both cars were £10k as an example and massive guestimate that's still £35k cost to change.

Just two examples, of course every trade in will be different (I didn't notice any trade in info on the website but I wasn't looking either) My point is these aren't cheap cars and they are appearing at a rate and increasing in popularity more so than any other car I've noticed before.

 

[[TW]Fox]

.

This is a private seller asking over £18k originally. It's a cracking car with a good spec(HK,pro nav, panaramic roof and adaptive lights etc).

.

Are you looking for a really nice example, or a bargain?

 

[[TW]Fox]

My point is these aren't cheap cars and they are appearing at a rate and increasing in popularity more so than any other car I've noticed before.

Fully electric cars pay very low company car tax. By contrast, the company car tax on a conventional car is now very expensive.

 

[Relentless81]

Fully electric cars pay very low company car tax. By contrast, the company car tax on a conventional car is now very expensive.

So they are likely to all be company cars, makes sense. I just see the cost to purchase outright and wonder how someone would buy one especially when the website is as simple as adding a £45k car to your basket and checking out

 

[AndrewNR]

So they are likely to all be company cars, makes sense. I just see the cost to purchase outright and wonder how someone would buy one especially when the website is as simple as adding a £45k car to your basket and checking out

More than likely...probably about 90% I'd imagine.

 

[Jonnycoupe]

I'm noticing more and more Tesla's where I live, over the road has one, on the connecting roads they are popping up on drive ways at an interesting rate so I had a look at the Tesla website yesterday and the cheapest Model 3 is £45k

I live in a decent area but I can't afford £45k for a car, without reading the rest of the thread because I'm sure it's already been discussed I find it odd how these are popping up all over the place especially when on the Tesla website it says "continue to payment" as if you were buying something for a tenner, I think I'm out of touch because my experience of buying cars from a dealer it takes half a day and is filled with paperwork

new company car choice, new Mondeo man - not many are privately funded.

 

[CapitalOne]

I’ve always been tight with cars. I leased with a great company deal (we owned a leasing company amongst other things) with no deposit, full service etc. It got to the point though that the nice ones I wanted looked like a waste of money for the miles we do (2-3k pa with 2 cars). Now my station snotter gets driven so little I’ve had to buy a battery jumpstarter so a move to EV it is.

So I will be doing a salary sacrifice EV deal and this is all in, including insurance (i.e. back to leasing) but with EVs I think it makes more sense. With improvements in range etc I think I would be wrong to buy one with a risk that in a few years time it’s only got half the range of a new one.

Horses for courses though!

 

[jpaul]

Even trivial things can end up costing us a fortune, a car without a parcel shelf can cost over 100 quid. Trying to get in contact with the customer once they've picked up their new car to get it can be a hard task too. The lack of a second key is a common one too and that can cost over a couple of hundred pound.
With regards to warranty we only give a standard 3 month warranty on anything which is out of manufacturers warranty which is the legal requirement.

I thought with cazoo they could always come back to the seller if they were found to have mis-represented the car's state.
tbh I was wondering how much the 3month warranties cost.
.. sales executive --- everyone is an executive these days ... marketting executive ..... it's like the exam grading levelling up, or desire to attend university

Equity in their part ex quite favourable though

which it is, currently, for all cars - the AT data I had linked showed premium ev's with the least(sic) appreciation, because they haven't been on the market long, and until their recent rrp price rises there was no head room, like there is for older ice, a private buyer with an older xc40 would have made more %, & probably absolute, gain;
manufacturers prioritizing ev's for production must play into situation too.

 

[Somnambulist]

+1 keep it - last of the NA cars good reliability which offsets marginally worse economy&road tax from a newer turbo - get an aftermarket head unit to swap in during remaining ownership and tempur lumber cushion (both of which I did on similar aged bmw) - even onerous congestion charge will apply to bev in a couple of years, no one lives.

Probably what I'll do for now. I know you can get aftermarket heated seat kits too as I have leather seats, but unlike the EX/EX-GT trim with the ES-T they aren't heated...

It seems apart from my current HR being monumentally slow I have this job - which is with the Met Police in a staff / I.T role - so I'll be looking to see what salary sacrifice schemes they offer on EVs and if it works out ok (for leasing, obviously) but I can probably deal with driving the Honda for a bit longer and I suppose it'll improve the resale value if I tart it up a bit.

 

[ChocAndGray]

I thought with cazoo they could always come back to the seller if they were found to have mis-represented the car's state.
tbh I was wondering how much the 3month warranties cost.
.. sales executive --- everyone is an executive these days ... marketting executive ..... it's like the exam grading levelling up, or desire to attend university

Fancy titles is a thing unfortunately. A cleaner is known as a hygiene operations assistant lol.

A 3 month warranty costs us £100 so we make no profit, it's just an additonal cost on the car should someone take the car as is.

It's better if we sell the extended warranty as we actually make something on it.

I'm not sure how cazoo operates, perhaps they have a disclaimer.

For us though there's not much come back if we take a car in with a clutch that's on it's last legs. There's an element of "sold as seen" when we take a part exchange in.

 

[HangTime]

the cash buyer, who would have previously been king, negotiating a good discount, is in the cold.

It's been a long while since this has been the case I think; maybe back in the days of literally bundles of cash being handed to a backstreet dealer, but where we are talking new cars (which we should be if comparing with lease cars) its hard to remember a time when cash buyers wore a crown.

So I will be doing a salary sacrifice EV deal and this is all in, including insurance (i.e. back to leasing) but with EVs I think it makes more sense. With improvements in range etc I think I would be wrong to buy one with a risk that in a few years time it’s only got half the range of a new one.

Yeah I feel like leasing is a good way to avoid investing long term in a vehicle that might get superseded in a few year's time - I don't mean better models coming out (that's always been the case) but significant shifts in tech, like better batteries, better range, different types of charger etc.

My wife has access to some NHS scheme but last time I looked it seemed like a pretty limited selection or really expensive. You either had to have a small runabout (no good for us) or be paying a fortune for a bigger car.

 

[ChocAndGray]

It's been a long while since this has been the case I think; maybe back in the days of literally bundles of cash being handed to a backstreet dealer, but where we are talking new cars (which we should be if comparing with lease cars) its hard to remember a time when cash buyers wore a crown.

Absolutely.

It was a time where small dealers wouldn't pay the vat so could offer a larger discount, the same way some traders do private work. I used to get stuff done to my car years back and would always get a discount for cash as he wouldn't put it through the books.

It's funny when you get people that still walk into dealerships and ask "best price for cash?" they really are oblivious as to what the benefit was or could even be.

I think the likes of Phillip Schofield and whatever car thing he advertises for, (can't think whether its webuyanycar or not) mentioning selling your car for cash to get the best deal doesn't help.

With new cars in particular you'd be missing out paying cash as you wouldn't get the deposit contributions on PCP. So if someone was genuinely cash you'd be better off buying on PCP to take advantage of the fda and then settle.

Also a dealership makes finance commission (minimal on new cars) on used cars so if anything we are able to offer more as we can use the profit in the commission.

 

[HangTime]

I think the likes of Phillip Schofield and whatever car thing he advertises for, (can't think whether its webuyanycar or not) mentioning selling your car for cash to get the best deal doesn't help.

With new cars in particular you'd be missing out paying cash as you wouldn't get the deposit contributions on PCP. So if someone was genuinely cash you'd be better off buying on PCP to take advantage of the fda and then settle.

Also a dealership makes finance commission (minimal on new cars) on used cars so if anything we are able to offer more as we can use the profit in the commission.

I think the WBAC message is more about the fact that you might get a better deal overall because you don't get screwed over on the p/x. In other words it's not so much that paying cash gets you a better deal more that a combination of trade-in plus cash (or finance) might be less efficient than selling the car elsewhere and then paying cash (or finance). Dealers know that people will like the convenience of p/x and it gives them another angle to grind their pound of flesh. They can give a 'discount' on the sticker price for the new car if they are low-balling you on the p/x, the delta between the two might still be higher than selling the old car to WBAC and paying full price for the new car.

When it comes to the modern market obviously you have to consider finance deals to get contributions, our current car was bought on finance just because doing that and then settling early made it cheaper than paying cash, we didn't actually want finance.

 

[ChocAndGray]

I think the WBAC message is more about the fact that you might get a better deal overall because you don't get screwed over on the p/x. In other words it's not so much that paying cash gets you a better deal more that a combination of trade-in plus cash (or finance) might be less efficient than selling the car elsewhere and then paying cash (or finance). Dealers know that people will like the convenience of p/x and it gives them another angle to grind their pound of flesh. They can give a 'discount' on the sticker price for the new car if they are low-balling you on the p/x, the delta between the two might still be higher than selling the old car to WBAC and paying full price for the new car.

When it comes to the modern market obviously you have to consider finance deals to get contributions, our current car was bought on finance just because doing that and then settling early made it cheaper than paying cash, we didn't actually want finance.

You're right that convenience is massive factor. People generally prefer to drive in and drive out in one place. Having to either sell privately with random people coming to your house, test driving etc, or having to drive to webuyanycar and then make your way to the dealership is a pain.

And sometimes getting £500 less is worthwhile for a more convenient way.

Part exchange prices are a common objection and as I mentioned previously it can be easy to overcome that objection if you can justify the price. It's all well and good someone saying webuyanycar offered me a grand more, but if you can tell someone you've priced their car based on the lack of service history, 4 kerbed wheels, one key, a scuff on the bumper, two tyres with 2mm tread etc most reasonable people will accept the price. They'll also start talking themselves out of taking it to webuyanycar for them to kick them in the nuts over price too.

For most cash buyers all that matters is the cost to change, so if you can stand a car in at a low value and then discount the car you're selling to get the cost to change where it needs to be, and then have a car with a good bit of profit in it to re-sell everyone's happy.

The majority of customers we get have all been offered more than we do, but a lot of these online places offer cap clean for cars (some even more than that). The thing is these car's aren't clean, so we tend to pay cap average, or even below if it's a real shed.

With regards to people paying off finance early to benefit from the deposit contributions, it happens more often than we like. It's annoying as we get the commission clawed back unless it's settled after 6 months. Some sales execs have even been as cheeky as to tell a customer they can't settle before that time, that's a whole can of fca worms right there lol

 

[CraigN]

Some finance types I used to work with always used to use the phrase lease things that depreciate.

It doesn't really apply to personal finance I believe. Was something to do with how operating leases used to be reflected on the company balance sheet. The difference if it is recorded as a liability or an asset and the implications of this.

There were some rules in which certain types of leases didn't have to be reported on the balance sheet and thus could be "hidden". This could be all tosh, but that's as it was explained to me.

I am about to switch car using works Salary Sacrifice EV scheme. I'm in the Tax window which makes this a really good deal for me when comparing to buying, financing or leasing privately.

 

[HangTime]

Yes the hassle is a factor but not one I would lose £500 over. We actually have a WBAC within walking distance so I'm certainly not dismissing it as an option when we come to sell.

As for p/x objections that's all well and good but I've had dealers offer less in p/x than WBAC offered following an inspection. The last car we bought was the 3rd dealership we visited, the two prior had offered p/x values below that we got visiting WBAC. They were prepared to let people walk away (this was 5 years ago when stock was more plentiful), it made no sense to me. Then a few days later he pipes up on email asking where they need to be to make a deal - I told them that in person at the weekend ffs! I guess the idea is they want me to go away, not find a better deal and then come crawling back, that's why they wait a few days, but it still seems odd. I was prepared to pay their sticker price, I was prepared to accept less p/x than CAP valuation, I was prepared to transfer funds there and then on the day.

One thing I did do differently was phone up the 3rd dealer in advance to get a view on p/x valuation (pre-inspection). Didn't want to do another long journey to get low-balled again. I thought they might dismiss this as a time-waster but I guess conversely the advantage of being on the phone is they know I'm not a captive audience like I am in a dealership. Maybe the thought process is if someone is sat in your showroom, has test driven the new car and likes it, they will just cave in and agree to a nonsense p/x valuation because they are emotionally attached to the new car or something or are just going to have less experience in F2F negotiation.