I am a complete novice at buying cars having driven the same one for the last 8 years (it was even my old company car). Now I am thinking about buying new Fiat Panda 4x4. I have always said I would never buy a new car due to the high initial depreciation but the dealer who gave me a test drive has said he will let me have one at Dealer Cost if I register it this month. I understand that this means he is selling it to me at no profit to him. Why would he do this or am I being thick? Is it a deal worth looking at ( he hasn't comitted to any figures yet) or should I just wait for a decent second hand one to come along?
Help!
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If you are ScottishLizzie i have just answered this question for you at MoneySaving Expert, if not here is my explanation - he won't be selling the car at cost but will give you a bit more than normal discount - if you search the net you will almost certainly find a cheaper price elsewhere. Fiat haven't sold many Panda 4x4's so it could be some time before you find a suitable 2nd hand example.
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Does it matter to you how much, if anythingthe other guy makes ?
If I wanted a Panda 4x4 or whatever, my objective would be to buy it at the mimimum cost possible. Whether the other guy makes a profit or loss is his problem.
Decide what you want
Find the cheapest source ( not suplier making least profit )
Decide if it is worth it
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I have absolutely no objection to him making a profit from it. On the contrary, I just didn't understand why he would want to sell it without doing so. I think I see now that he will still make something from it which I certainly don't mind but like you said I want to get it for the smallest amount possible. I'm coming round to thinking that as I'm not that bothered about having a brand new one I should just wait and see when a decent second hand one turns up. I suppose what I'm thinking is that if the price difference between a new one and a 6 -12 month old one is not that great perhaps it would be worth looking at the new one. I guess I should ask him what his bottom price is.
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I'd say have a look around some of the brokers on the best deal lists and see what they will do a new on for, then speak to the dealer and see what he will do one for and compare the differences. I think your problem would be finding a nearly new panda 4x4 rather than the price difference.
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Yes I am also Scottish Lizzie and thank you for taking the time to reply twice! He did say to me that I would find it hard to get a second hand one at least for a while but then he would I suppose.
If I buy a new car do I have to take it to the original dealer for servicing? I would prefer to take it to my local mechanic who has serviced my Renault faithfully for several years. He is a Peugeot and Citroen specialist but does others too I suppose. If I buy the car I would intend to keep it a long time - I don't change my car often.
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You would be under no obligation to take it back to him for servicing, as long as your gagrage does it to renault schedules with genuine parts the warranty would remain in tact.
Is there any reason you prefer the 4x4 version? i had read reviews that weren't great about the 4x4 but the normal Panda is meant to be very good as a cheap town car.
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I like the 4x4 as I live in a hilly area down a bumpy track and it all gets a bit difficult in the winter. But I also want something that's easy around town.
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He isn't selling it at no profit to him; merely he won't make anything directly from the sale. However, he will potentially make money on:-
1. Options such as GAP insurance, Diamondbrite and factory extras including metallic paint;
2. Servicing over the next three years;
3. Selling any part exchange that you may have;
4. A bonus for meeting his volume targets;
5. Finance commission.
Add that little lot up and if he gets all of them, he could be looking at over £1k of additional revenue even if he sells the car at cost. Of course there's no guarantee that he'll get any of them but it would be a very unusual deal where none of those extra boxes were ticked.
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He told me my car was virtually worthless - I think he mentioned the figure of £50 at one point, just enough to cover the costs of getting it to auction. Think I would be better selling it privately.
They are doing interest free credit - do they still earn commission on this?
Many thanks.
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> do they still earn commission on this?
who cares ?
is it a good deal for you ?
let him look after himself
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I'm just interested that's all.No need to be quite so curt.
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re-read what L4C said, I think he is exactly right.
Let the dealer worry about whether or nto it is a good deal for him, you worry about whether or not it is a good deal for you - if it is not, walk away but if it is then buy it. Neither action should be coloured by how much the dealer likes the deal.
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Oh - I meant to ask, is the GAP insurance and Diamond brite worth having?
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I'll get to bed at some point tonight!
If he is cutting the deal to the bone there will be no way he can give you more than your car is worth as PX so have a go at selling it private if not you've always got his low bid as a fall back plan.
Both GAP and Diamondbrite have been discussed at length on here - they can be useful products but they will try to charge you a fortune for them as a way of building profit into the deal again - feel free to haggle these down too, aim for less than £100 for each of the products. If they try to charge you more than this tell them no thanks, with a search on the net you can buy bothe products for less than this off the net.
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I'd be interested to know what this "worthless" car is - make/model, age, mileage, condition and length of MoT.
I've no idea if the dealer makes commission on the interest free credit - it can be a way for the manufacturer to incentivise that particular model for the dealer, without reducing the price - but as said above, it doesn't matter as long as the deal is a good one for you.
GAP insurance is basically insurance in years two and three for the difference, in the event that your car is written off, for the difference between market value and invoice price. (In year one, insurance will usually be new-for-old if the car is bought new). If the car is £9k now and will be worth £6,500 in a year and £4k in three years' time, that means the average payout if a claim is made will be £3,750 so if less than 10% of cars are written off in those two specific years, the insurer is making a profit at £375... and so on.
Diamondbrite will cost the dealer less than £50 but he will probably ask over £200 for it. Essentially it is a valet package that will make it easier to keep your car looking shiny. If you are either willing to put in the effort to keep it looking shiny, or not bothered whether it looks shiny or not, it's probably not worth it but may be worthwhile for an easy life and a shiny car, if both are that important for you.
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He can afford to sell at cost if he is giving you £50 for a car he can sell for £500 or £1000. What is the car you are replacing?
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Renault Laguna 1.8 RT R reg 1996. 117,000 miles.
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R reg is 1997 or 1998, likewise 1996 is N or P. Nevertheless if in very good condition you might sell the Renault for £1000, reckon £500 would be fair trade in. So if the dealer gives you £50 for it you can see where he is making his money.
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A dealer can sell a car at cost - List price minus his % (say 12.5%) and still amke money - HOW Specific ranges or even models might be difficult to shift - The manufacturer will give him a target and if he meets or exceeds the target he may get a lump sum per car (£500 / £1000 £X,000) or £XX,000 bonus for shifting 10/20/30 cars.
After all major fleet buyers & rental fleets get huge up front discounts - retail cars have the cost to the manufacturer.
This huge margin of £££s can be given to dealers as additional discounts / incentives /bonuses, can fund /low or Zero % finance deals/model upgardes or whatever.
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