How much does a dealer make on a Motability Car?

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  • #62253 Reply
    Winston

    Hello Folks,

    hope everyone is well ?

    Im sure this subject will have been covered before so apologies in advance

    as I’ll be able to order a new car in Jan I’m still sitting on the fence with regards to extending the lease on my current car

    but I’m going to venture into a few dealerships soon , arrange a few test drives and see what deals I can secure ( if any )

    So I really want to make sure I have the right info and response to the automatic dealer stance of “we hardly make any money from a Motability car “ ( excluding options obviously )

    So…. can anyone explain to me just how much a dealer makes per Motability car? Does it vary on the AP, RRP etc? Or is a flat set fee

    haggling and saying no isn’t a problem for me, but knowledge is power and I’d rather hear how the fee is worked out from some of the experienced members on here ?

    thanks guys , and gals ?

Viewing 25 replies - 1 through 25 (of 40 total)
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  • #62256 Reply
    DrOctor

    I was told £50 by a dealer but I believe it’s actually £100 per car sold according to Motability rules i.e. the dealer must follow certain procedures to get the £100.

    #62258 Reply
    Trev
    Participant

    Hiya Winston,

    It’s more complicated that a dealer making £x amount per car.

    The only things i know for sure is a salesperson will make between £45 – £55 commission on each sale.

    The dealership will get rewards from motability £100 for giving you the new car, £75 for taking the old car back, and £40 for the 1st service – in addition to the servicing costs.

    When i say complicated, it’s because the dealer will have sales targets to meet, and if achieved can reward them with greater discounts from the manufacturer – motability sales are included – so it could be worth a lot more to the dealer to make up the numbers then the profit on an individual sale.

    To be a motability ‘partner’ the dealership has to pay motability to put it’s dedicated specialist through training, and pay for promotional material, etc…. and a dealer won’t fork out money like that if they weren’t making a profit from a motability sale – add on the work it can bring to the servicing department for repairs, etc.

    Good to hear from you again Mr T Winston lol


    Mota History - Nissan Qashqai Ford Focus Seat Leon ST Mazda CX-5

    #62288 Reply
    Winston

    Thanks guys!

    i know it wouldn’t be too much intitially but as the wise man of the woods aka Trev points out all the future servicing, repairs etc etc would bring in the £££’s for them

    So today I contacted Mercedes , never been a real fan of them ( well not the ones in my budget ) but that new A Class really does appeal to me, especially innthebinside, but being much lower down than my current car I’m pretty certain that it wouldn’t be ideal given my conditions , so I asked for a 48 hour test drive so I really could have w good feel for it, and see just how easily I could get in and out, Motability agent gasped at first… paused then said Yes it shouldn’t be a problem, so she will check with her manager and call me back to arrange this

    I still prefer the Tiguan R line of all the cars on the scheme as it as close to my current car out of all of them , but with all the delays and uncertainty regarding delivery times I’m looking around at other options and any possible changes to the scheme come 2019 before test driving one

    if the Merc is just too painful and awkward to get in and out of, well atleast I will have got my hands on some fancy and colourful tech in the cabin, and that’s right up my street

    ill post an update once I have one, thanks again

    good to hear from you Trev, hope the other Amigo ( Brydo ) is doing well and that everyone else is behaving … except Mike , he never behaves lol

    #62289 Reply
    Brydo

    Still here winston great to see you posting again.

    #62291 Reply
    Trev
    Participant

    We’re all here for you brother – the 3 amigo’s ride again!

    Have you considered the Mazda CX-5 Winston? it has lots of toys!

    Must admit the display offering in the a-class is streets ahead of the competitors


    Mota History - Nissan Qashqai Ford Focus Seat Leon ST Mazda CX-5

    #62292 Reply
    Littledave

    Vauxhall pays the dealer £285 per unit. Out of this comes the PDI and valet, approx £100, salesmans commission say £40, fuel in the car, interest, contribution to the salesmans salary, contribution to the dealership overheads. Motability sales do not count to quarterly or annual bonuses. If the customer terminates early the dealership is charged £100. There is very little made on the sale. The are two annual services and an MOT, but again these are heavily discounted. It is east to see why many dealerships are not keen on Motability, however it us a condition of the franchise agreement. Additionally, the discount given to Motability has to be paid back to the dealer by Vauxhall. This takes a minimum of two weeks and in a large dealership means that They can owed at least £200k at any time.

     

    #62293 Reply
    DrOctor

    Trev is the Oracle of Motability knowledge I think!

     

    LittleDave, that is very useful to know. The impression I get from dealers is still the same though. The sales staff do it because they have to and given a choice would choose a normal retail customer over a Motability one every time.

    #62296 Reply
    drphibes

    I have been told that many figures from various dealers that it is very hard to make out what kind of money they make out of a Motability sale. My new mini came from Stratstone who payed £500 towards the deposit. Other mini dealers that I spoke to would not offer anything at all telling me the usual prices are set by Motability or we don’t make much out of the scheme..

    #62299 Reply
    JS
    Moderator

    Hyundai dealerships recieve £380 handling charge from manufacturer (plus I believe most dealers have some deal with the paint) combine that with Motability payments of: £235 for promoting the scheme and dealing with the return car and supply of the new one. They then recieve £40 upon first service completed. Not huge figures but enough to be able to haggle with.

     

    #62310 Reply
    Chris Allsopp

    Sounds like every brand works differently. We get paid in a load of different ways. In a nutshell we would get paid more for doing it 100% accurately but can get fined for a minor misstake (these can happen very easily) overall they are not lucrative deals however they would count towards our annual targets.

    #62313 Reply
    drphibes

    I visited a Seat/Citroen dealer in the summer when I was on the hunt for my next car. The sales guy there told me that any Seat cars sold on Motability counted towards their sales targets but Citroen had only just caught up with this and previously a Motability sale did not count towards and targets.

    #62317 Reply
    Baljit

    I was told by the BMW garage in Peterborough  they get the same commission on a Motability car as they do on a private car sale. As he was astounded the London dealer had not made a effort. He was more than happy to meet my needs i.e extended test drive fuel included.  He never said how much but from the effort he put in I would presume it was worth while.

    #62318 Reply
    gilders
    Participant

    I was told that the only reason my discount on AP was authorised, was because it counts towards sales. Sales means that the dealer can get larger discounts direct from manufacturer for actual sales.

    I don’t know the actual discount amount, but discounts can be huge. We had a local, family run, Vauxhall dealership where my dad worked. They didn’t sell as many new cars as the big chains. The discounts were so large for the bulk buying chains that it actually worked out cheaper to buy from them to sell on as new than buying direct from the manufacturer. How can a family run franchise compete with the large chains like Stoneace? Simple, they can’t and the local dealership had to close, making my dad redundant.

    #62350 Reply
    Andrea

    they must make a good amount, otherwise they’d not do motability. however, the only people that profit are both the dealers and motability. they could absorb the costs of the AP, if they really cared about the disabled (that goes for both dealers and motability. the scheme started out with good intentions but has now become a profiteering racket off the back of the disable. shameful. and their boss [Betts]is overpaid! the only customers i think really benefit from the scheme are children, who pay nothing anyway. maybe also young drivers under 25, though limited on power of cars available, because their insurance would be high and they are less likely to afford buying a new car. anyone over 25, who maybe had £10k in savings, should invest in new car (or good 2nd hand), insure it themselves and not put almost £10k per lease into motability monopoly operations bank account!

    #62375 Reply
    boldbob

    I have been told by a family member who works at a BMW dealership in Herts, she gets £55 for a completed deal (once the pin has been put in), provided that everything is done correctly in the correct order with all the paperwork. The dealership gets around £250 per motorbility car, provided all done correctly, in the correct order. But they do count towards her targets, but also any that get cancelled or mobility have to get involved with they get small amounts taken away, and that can end up being more than the contract is worth. But they all count towards the discounts the dealership can achive from BMW targets.

    She said they make more from the service & MOT. From what I have been told they would prefer not to do motability as more problems are caused by motability customers, cancellations/changed mind that is why they now have to take a deposit upfront, and any extras have to be paid up in full before the car is ordered.

    Also she said the lack of information from BMW can be frustrating at times, as car build slots for sales can be put in front of motability ones, this is done by BMW not the dealership, and they have no control over it.

    So often when you are moaning at the sales person, they are just as frustrated & in the dark as you are!

    #62501 Reply
    Chris Allsopp

    What a bad view of the scheme you have. I for one think it’s anazing. I have worked in the trade for all my life and I can’t get that good of a deal. You are right there are cheaper options but they are not always the best. In my experience everybody wins with this scheme

    #62504 Reply
    JS
    Moderator

    dont worry Chris,

    it was suggested this user found an alternative forum to vent their anger  however they continued to be disrespectful to others views, resulting in their removal from the site. It is an unfortunate outcome but for the good of the Forum and it’s great users and readers alike.

    #62525 Reply
    Winston

    great news JS

    as we would say up here.,

    what a Heed the Baw she was!

    #62558 Reply
    Jack

    The invoice for my ford Kuga has ”motability overheads” @ £500

    #62628 Reply
    Antony George

    If they receive so little it probably accounts for how I have been treated from being told I couldn’t look at one car as the mobility salesman was not in and from the salesman of my current car you should be grateful you have slot of car for your money.

    #62632 Reply
    Mike

    Antony,

    If it is as you say, I would be looking at the Companies House website to obtain the details of the CEO/Managing Director and Directors of the relevant dealership (or even better, the parent company) and send them a personal letter (by recorded delivery) fully outlining how you were treated and how you felt about it (Don’t do it by e-mail or you will generally get a cut & paste response – a formal letter they have to do something with!).

    Invite them to kindly take any action they deem fit and to inform you of the outcome of their investigation into the matter.

    Directors, particularly of parent companies, generally do not receive complaints directly from customers, hence it carries rather more weight than just making a complaint to the dealership manager etc. Plus the errant staff at a dealership will not welcome ‘head office’ getting involved.

    I would also send a copy of your letter, under a covering letter for the information of the Chairman of Motability, Lord Sterling at the House of Lords, London, SW1A 0PW, whom in the past I have found particularly responsive (He is about to receive another letter from me but that is a different matter).

    It comes back to the old adage, if you want to complain, go to the very top.

    Mike

    #62710 Reply
    Robert

    Great advice Mike and it works. Back 2014 I had a Fiat 500xl 7 seater on order, it kept getting delayed. We had a family wedding to attend in Scotland and I was driving the whole family plus dog which meant I needed all 7 seats. I knew this wasn’t the dealers fault they were giving me regular updates so I was happy from their point. To me this was a Fiat problem, so when it came to a fortnight to go and still no car I had a look online, got the Fiat UK bosses name, found his email and sent a very measured polite email. HALF AN HOUR!!  later the phone rang and it was the boss. He was very apologetic and told me that someone would be contacting me later to arrange a temporary car so that we could get to our wedding. Later that day I got the call to say they would drop off a car in time for our trip. The car arrived on time with a full tank and a Fiat fuel card to use for the return journey. On the morning of our departure the boss called to wish us a safe journey and to tell me that my car WOULD be with me a few days after our return. My car was delivered a week after we got back, with no charge for the options I ordered, a full tank and a free in car coffee maker.

    So I would advise to always get in touch with the company boss if you have any problems with service.

     

    #106874 Reply
    Motaxyz
    Participant

    This thread may be of interest and relevant to recent thread

    #106888 Reply
    BionicRusty
    Participant

    Good find @smallcar 😁

    As the £50 commented on is sales commission for the salesman (this is on top of wages), it does not refer to the profit made by the dealer. In the industry I’m familiar with, direct sales (manufacturer to end user) is based on 15-30% Gross Margin depending on a number of aspects but including units ordered, material/labour split, etc.
    I appreciate that for the dealers we deal with there are more factors in play but none of us should for one minute believe that they only make £50 or so per sale. Even 20 sales a day wouldn’t cover the days overheads.

    Motability has huge buying power and this is good news for us but it does mean that they buy at a reduced cost and I suspect that this is why some dealers seem a tad indifferent. That said I’ve dealt with a few dealers over the years and found no real difference between Motability and Non-Motability. Some are ok. Some are not.
     

    🏎 I will be remembered for nothing but had great fun doing it 🏎

    #106901 Reply
    Craig

    Some good info and advice given.

    I might be sending a few letters in the next few days.

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