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I posted this as part of another thread but got no response. I'm hoping it will provoke some discussion on it's own thread.
'I'm having trouble with this used van pricing thing.
We're told that when a new van is sold it depreciates by the VAT amount immediately and then by £2K, 5% or 10% per year, depending who you've read.
If we take a £40K list price van and take off the VAT = £34K, then after a year take off another £2K = £32K. Now is that the PX price or the dealer's selling price? Well, let's say the dealer adds £2K margin. We're back to £34K.
But some dealers don't seem to have read the book.
Spinney have two one year old Autotrail Tracker EK's on their books, at around £35K each. Now an EK with SE Pack lists this year at £37,252. So who would buy a one year old van with a good few thousand miles for only £2,250 below the price of a brand new one. Indeed if you're canny you might even get £2,000 knocked off a new one with some dealers.
Using my formula (above) a one year old Tracker should PX for around £29,500 and with the dealer's £2K margin that's £31,500. So who's making the extra £3,500 and what happened to the principle that the first owner suffers the biggest depreciation hit? In this case the not so lucky buyers will get a PX price of £25,000 for a 3 year old van if they trade on in two years, so that's £10,000 depreciation in two years on a secondhand van. I could understand £6,000 in two years but that extra £4,000 isn't funny.
Sorry Spinney I have no particular axe to grind with you, you were chosen at random, many other dealers also seem to be selling nearly new vans only just below their new list price. Are they looking for a mug, don't they want to sell or will they drop the price by £4,000 to a serious punter?'
Andy
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The following members of MHF thanked Steamdrivenandy for this posting
Spinneys will give you 2,500 to 3,000 off a new van if you go in with cash, as will most dealers. So you would be better off buying new in the examples offered above.
I think the "1st year depreciation loss" is something only suffered by the buyers and not something that affects dealers!
The following members of MHF thanked Annsman for this posting
many other dealers also seem to be selling nearly new vans only just below their new list price. Are they looking for a mug, don't they want to sell or will they drop the price by £4,000 to a serious punter?'
I assume that the higher the initial screen price the more flexible the dealer can be when you arrive with your van for a part-ex price.
No part-ex and you should be able to negotiate a very substantial discount.
Sorry - that was a short reply. I thought I had to go and do some work. Managed to put it off
When we were looking to trade in our old Pollensa, we were generally offered "around £17,000" against vans of around £30,000 value. We had bought it privately at a good price a year before at £19,100.
Ticket prices of these are in the region of £21,000, allowing a bit to be negotiated off, so the dealer would get £20,000.
Mind you, I made the mistake of asking a dealer whether he could do a part/ex inside a week on a £30k van, and then he rang me back with an offer of £15,000 Cheeky wotsit.
I suppose the truth is that the dealer never thinks they're worth as much as we think they are, and the 'value' would be the eventual sale price. So, a £40k (new) van, lose 17.5% is £34k, then lose 10% comes to around £30k. This is its value, and you are likely to be offered something less than that (say £28k), and it will then be put back on the market at £35k, with the prospect of negotiating down by a couple of k, so the dealer will get £33k, making £5k on the deal (less a bit of workshop time / warranty work maybe), the new owner saves £7k on a new one. The only loser is the part exchanger, who paid £40k and loses £12k for a whole one year's use.
Obviously, the numbers are variable, depending on how tough a negotiator you are, and how desperate you are / they are.
Gerald
The following members of MHF thanked geraldandannie for this posting
When demand outstrips supply dealers make good margins and customers pay the price demanded by them.
With order books filled and a lead time of 6 to 12 months they don't need to give anything away
The following members of MHF thanked EJB for this posting
I'm just waiting for JohnsCross to come on, and tell us they only make £200 on a deal
Gerald
Wrong Gerald we make at least £15000-00 NETT sometimes more when we can steal the part exchange and beat Swift down another £6000 off our 45% discount off list price.
I wish!
______________________________________________________________ Swift Main Dealer - UK FiammaCare Centre
Peter
The following members of MHF thanked JohnsCrossMotorHomes for this posting
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Cheeky wotsit.
