Talk Morgan Forums Community The Malvern Arms Car Market in 2017

I purchased the GL in March/15 R.R.P £63k, i paid £58, when asked how i would be paying i said Cash, no sir you cannot give us cash.... bank transfer.....in effect thats what i meant, the finance guy had is usual 3 mins with me where he suggested if i was purchasing goods with euros from abroad, i would be much better off keeping my money and using it for my business and taking advantage of their 2.7% interest rate

We finalized at £30k down an £28k at 2.7% flat over 3years.... .beware you dont get confused between flat rate and APR the finance house are clever at twisting their words which results in your monthly payment been very different from actual net money.

For those who are unaware, dealers pre reg new vehicles to turn them into second hand units, therefore eliminating a lot of the V.A.T

You get a car effectively no one has preowned at a reduced cost.

prompted by this thread I typed "car mileage correction device" into ebay and got several different ones in the £200 to £350 range.

what price a low mileage car?


OK its normal to blame politicians for everything but I wonder where you see "incompetence" here.



The ticket price is the price that Joe Public is offered - fleets have always bought at a lot less than that. And of course there are two costs of manufacture - the full cost including all overheads and the marginal cost which for a huge mass production outfit like MB is way lower.

That said this situation smells just like then mortgage situation of the last financial crisis or the bad lending of previous financial crises. I've lost count of how many bank crises I have gone through but they all have the same nature. A lending practice that starts off as a sensible idea, becomes a fashion and gets out of hand driven by poor management control and incentives.

I was under the impression that dealers pre-register cars in order to meet new car sales targets and achieve their bonus from the manufacturer.

You'll find a lot more pre-registered cars around when the car market is slow, as it is now.

"That said this situation smells just like then mortgage situation of the last financial crisis or the bad lending of previous financial crises. I've lost count of how many bank crises I have gone through but they all have the same nature. A lending practice that starts off as a sensible idea, becomes a fashion and gets out of hand driven by poor management control and incentives."

No regulation - lets the sharks feed. This is why I am stunned at the US cries for reduced regulation once again following the FannieMae/Mac events that happened so recently. Maybe the people involved were unable to get a real job so this is their only choice.

Howard, the financial press is concerned about Pendragon, they own multiple dealer chains and have issued a significant profit warning to the city.

Yes, car finance through a PCP is out of control, no tests of affordability or any other questions about means to pay. At the end the dar is handed back and then what happens?

I can see the FCA stepping in, that will result in sales further falling and I'm sure one of the big PLCs behind the dealers failing.

It is interesting that Mercedes Benz UK is buying up dealerships where possible.
How can you tell? Simple:
Salisbury Mercedes = Mercedes Benz UK Ltd owned
Mercedes of Salisbury = third party owned.

So is MB acting as an unlicensed financial services provider?

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I was under the impression that dealers pre-register cars in order to meet new car sales targets and achieve their bonus from the manufacturer.

You'll find a lot more pre-registered cars around when the car market is slow, as it is now.

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Agreed.
The current sales slump seems to be a combination of several factors.

Firstly, car technology is advancing at an unbelievable rate and people are worried that the car they buy today will be rapidly out of date in 2 years time and therefore the residual value will suffer badly.

Secondly, the whole Brexit issue has created such unpredictable times that it's difficult to forecast what will happen to the economy over the next couple of years and how personal finances will be affected.

Thirdly, interest rates; what will they increase to and by how much.

In addition and I'm sure there's more, buying habits are rapidly changing, as has been mentioned before. The traditional outright purchase customer is now in the majority, with most new car sales being part of a PCP or lease arrangement.

I was recently talking to a couple of Directors from 2 blue chip manufacturers and both said there has never been a period of such massive change in the industry. Autonomous cars will be with us very soon and major dealer ship sites that cost millions will quickly disappear or merge with several brands.

Interesting times for sure..

MPH
Yes you are correct that inline with the information i posted makes the Dealer tick along, however the highest profit for the Dealer doesnt come from the car sale, but from the servicing department, also to include warranty claims.

Its a Ryanair effect, revers sale syndrom, sell it at cost, then when you have hold of the clients elastic
Pull their pants down hard.

And therein lies a massive problem for dealers and their future. EV's need far less servicing and repair work (theoretically) than ICE cars, so the opportunity to earn will have to shift to the front end sale.

In fact, will we really need dealers at all? Why not simply configure and buy cars from Amazon? They could deliver themselves .

Software updates would be downloaded automatically via the internet, like Tesla already do. All the other servicing like tyres and brake pads can be handled by Kwik-fit type franchises.