What’s in it for dealers?

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    Topic
  • #224137
    MFillingham
    Participant

      I was under the impression that dealers got a fixed rate, something around £500, for ‘selling’ a car to a Motability customer.  Yet I see deals where there’s a limited number of cars available with £1,000+ reduced off the AP plus mats and a full tank.  Even allowing for creative advertising where the discount includes the New Car Payment of £750 direct to dealership, that still leaves a chunk of money coming from the dealership.  If they’re having to do all the paperwork, register the car and everything else that follows, surely they’re getting more than I think, aren’t they?

      I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
      I'll try to give my honest opinion but am always open to learning.

      Mark

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    • #224142
      Glos Guy
      Participant

        Already answered this evening in the “prioritising retail sales over Motability” thread.

        In summary, yes dealers get a fixed handling fee. It used to be around £150 but it went up during the pandemic to (if I recall correctly) around £220. However, this is only part of the story. Cars ordered for Motability customers also count towards various volume bonus schemes (which are worth many thousands of pounds), so that’s why people should never believe a dealer that tells you that they only get a tiny handling fee and nothing else. It also explains why some dealers will offer additional discounts off the AP.

        #224148
        kezo
        Participant

          Dealers also get a fee for carrying out a service, MOT and a gcb check at the end of lease. I can’t recall the figurers for this but Glos Guy is correct.

          #224149
          Stevie

            Yes your quite right when I got my Volvo v40 inscription from marshals I didn’t have pay an AP they paid £500 into my bank account I know this was because it was the last of the v40’s but there used to be all kinds of deals about 5 years ago maybe not as good as that deal but Nevertheless plenty of good deals with low APs don’t get me wrong motability is still a great help to  me and the only way I’m getting a decent car but what I don’t understand is why the advance payments have gone up so much in general when you consider second hand car prices have never been so high surely that should have a positive effect on the advance payment’s

            #224158
            Rico
            Participant

              Dealer told me clearly they get £750 for a minimum sale and not related to the new car payment, he also told me most manufactures give a discount to the dealers if a target  number of sales, this is why some are willing to give a discount near the end of a month. So if your trying to get a car from stock, always ring up 3 yo 4 days before the end of the month if they are short on quota they will sell it to you

              this is only from franchised main dealers,

              brands such as Mercedes, Renault etc that have a mixture of main group dealers in the uk(owned by the car manufacturer themselves) won’t give you much at all even if it’s near the end of the month, but they will sell you a in stock car as the salesman will get the same bonus from the sale as he would for retail.

              #224237
              Avatar photoWinston
              Participant

                Not to forget plenty of work and money for carrying out repairs, recalls, servicing and MOT’s etc

                they wouldn’t be doing it out the kindness of their hearts, no matter what they make us believe… they are making ???

                When life hands you melons...,
                Make melonade!

                #224244
                RogerWilko

                  There will be changes as more manufacturers go towards the agency system.

                  in that system, the manufacturer dictates the price and the dealer gets a handling fee for pre delivery inspection etc.

                  you will also see a reduction in dealerships too

                  #224261
                  MFillingham
                  Participant

                    Thanks all.

                     

                    Yes, I’m under no illusion that they’re not making money, any business would tell another company where to go if it was required to do something for no return.  There’s always going to be a payment and I was just wondering on what basis that payment is calculated in order to try and negotiate from a position of knowledge should I finally be in a position to get a car.

                     

                    I assume the payments for servicing events are above and beyond the price for said service?

                     

                    @RogerWilko the agency model should see more dealers see scheme customers more as equals given I’d expect them to get a payment from the scheme and a smaller one from the manufacturer (maybe).

                    I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
                    I'll try to give my honest opinion but am always open to learning.

                    Mark

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