Car dealership and selling tactics

[Deleted member 18588]

Not for long......

Who knows?

Talk of transferring some production to Austria but nothing definite at present.

 

[Lord Tyrion]

A dealer, who is financially independant of BMW as they all are, is not going to stock an expensive option wheel. As far as the corrosion goes, I've yet to see a BMW that hasnt got wheel corrosion around the centre caps. They are known for this.

My Volvo xc60 had the same issue with alloy corrosion. I googled it and I was not alone. It's common for a number of marques sad to say.

 

[Bunkermagnet]

My Volvo xc60 had the same issue with alloy corrosion. I googled it and I was not alone. It's common for a number of marques sad to say.

Its because they dont powder coat them fully if at all, and then road salt gets under the laquer and causes corrosion.
My Mazda3 had 3 new wheels after 6 months because of it, and already 1 of those is repeating the bubbling under the laquer. I will get it/them done under warranty again, but I know the only long term answer is to have them all fully powder coated correctly. Silly thing is, it doesn't really cost a lot to have done.

 

[Smiffy]

It's a well worn path. As someone who works in financial advice I know the level of disclosure and treating customers fairly that has to go on in that industry, and should surely apply to the car industry too given the level of financial commitment people are making.

Went into a local Mercedes dealer last year. Saw the car I was after, that had been on the website. Wasn't desperate to get it, but sat down to speak to the guy. In fairness they offered me a decent price for my existing car, so that moved things on a bit as I'd been planning to try and sell it privately first.

We then came to the finance. After trade in and the savings I was putting to it, I was going to borrow the rest. The guy went through the motions even though I told him I would just take a bank loan. He told me the monthly amount which was roughly what I'd been budgeting for when deciding if I would get a new car. I asked him what the interest rate was. '3%' was his exact response.

I did a rough assessment and thought I might as well just go for that and save myself the hassle of getting a loan and having to wait for that process to run its course and probably not get the car for a couple of weeks.

Later in the week the stuff came in from Mercedes Finance to electronically sign and send back. The interest rate was 6%!

I was absolutely raging. The guy had obviously added up the cost of finance and divided it by the amount being financed and got to 3%. Never mind that you only owe an average of half the money over the 5 years, as you are paying capital off every month. The monthly payments had been closer to what I was thinking as I'd budgeted for a bit less in trade in, plus his figures had me paying a £500 deposit that day - fair enough, the monthly amount was correct, the interest was the deceitful but.

I know that if someone in my industry was representing mortgage figures on that basis they'd be struck off (and rightly so) following one complaint against them.

I thought about making a big issue of it and writing letters and e-mails to Mercedes, but in the end I just spoke to the guy and told him he was absolutely at it and I wouldn't be signing his finance agreement but would arrange my own loan.

He was quoting you the flat rate, not the APR.
Naughty.

 

[Slab]

Remember when most people bought 2nd hand (or 4th 5th & 6th hand) our cars cost a few hundred quid, and the ‘history’ they came with consisted entirely of scratches, dents, dings and scrapes (so collecting future minor damage etc of the same kind didn’t matter or involve insurance, just collect a few tenner’s from the guy that tapped you) and we kept them for 12-18 months before starting the cycle again. Cash deals were preferred and got the best discount and changing a bulb/oil didn’t involve booking it into some diary for a day and your 'parts' came from a scrap yard or the local motor factor.

I'm not convinced we're better off now


Edit: forgot to add;

And when you did want to splash out 1,500 on a ‘better’ car you went to your bank and applied for a loan… then the excruciating wait to see if it would be approved (because they dam well knew if you could afford it and didn’t let you have it otherwise!)

 

[Mudball]

Btw any one see new PCP deals like Evoque £450 down with £450 monthly, Audi A1 £299 down with £299 monthly etc .. balloon payment goes to 30k for the Evoque!!

How is this sustainable or are they fully convinced that people will no longer want to keep the car?

 

[Deleted Member 1156]

Btw any one see new PCP deals like Evoque £450 down with £450 monthly, Audi A1 £299 down with £299 monthly etc .. balloon payment goes to 30k for the Evoque!!

How is this sustainable or are they fully convinced that people will no longer want to keep the car?

It's sustainable because you are just renting the vehicle. Nobody cares about the balloon payment. £450 a month is £15 a day, try renting an Evoque from Avis for that amount 👍

 

[Blue in Munich]

Personally don't understand the love for PCP deals but it's all bike dealers want to push at the moment.

 

[Smiffy]

Personally don't understand the love for PCP deals but it's all bike dealers want to push at the moment.

Allows you to buy a newer, or better spec model for your monthly budget mush.
Peoples greed drives them.

 

[Tashyboy]

Personally don't understand the love for PCP deals but it's all bike dealers want to push at the moment.

I get the fact you have a shiny new car every two years, but it's like having a second mortgage and at the end of fifty years you have nowt.

 

[Deleted member 18588]

I get the fact you have a shiny new car every two years, but it's like having a second mortgage and at the end of fifty years you have nowt.

Alternatively you could purchase a new car outright and watch your money depreciate by, on average, 22% the moment it leaves the dealer's forecourt.

Personally I lease and have no intention of ever buying a car in the future.

 

[Dibby]

Alternatively you could purchase a new car outright and watch your money depreciate by, on average, 22% the moment it leaves the dealer's forecourt.

Personally I lease and have no intention of ever buying a car in the future.

Not that there is a right or wrong answer, as it depends on circumstances and outlook, but I think Tashys point is that if 2 people got the same car brand new, after X years the person that bought the car outright has lost Y% through depreciation but owns a set of wheels that can get them around, whereas the person that leased has likely paid a very similar amount, but has nothing. After all with a lease you are paying for depreciation and running of the car, plus a profit margin for the lease company, it's just that this based on a bulk discount rate the lease company will have purchased the car for.

My personal outlook is that if you have the capital to buy a new car every couple of years, it makes sense to lease and keep the money invested elsewhere, same if you run a business and can get tax breaks. If you lease because you can't really afford that car, you would be better to adjust your lifestyle to fit your budget, but of course everyone's view is different.

 

[Deleted Member 1156]

I get the fact you have a shiny new car every two years, but it's like having a second mortgage and at the end of fifty years you have nowt.

True but the fact is people need cars these days unless you live in the middle of a major city. It's just an expense that we have to accept the same as mortgage or rent.

 

[Kennysarmy]

True but the fact is people need cars these days unless you live in the middle of a major city. It's just an expense that we have to accept the same as mortgage or rent.

Don't think anyone is disputing most of us need a car...

It's whether leasing or buying is more cost effective.
Obviously buying is - but that does n't always get you the nice shiny car you want!

 

[Robin Hood]

Is leasing a generational phenomenon
None of my family and peer group (of a similar age) have a leasing agreement.
However out of my kids and their partners there are 3 owned, 1 company car and 2 leased.
I have just changed my car and didn't consider leasing.

 

[Bunkermagnet]

Is leasing a generational phenomenon
None of my family and peer group (of a similar age) have a leasing agreement.
However out of my kids and their partners there are 3 owned, 1 company car and 2 leased.
I have just changed my car and didn't consider leasing.

Isn't it just a result of everyone wanting the latest and best and if they really had to pay for it fully they couldnt afford it.?
If everyone who had a lease/PCP were to have to actually pay the full value there would be carnage. I view them in the same light as a mortgage on 5/6/7 times your earnings.

 

[Deleted member 18588]

Isn't it just a result of everyone wanting the latest and best and if they really had to pay for it fully they couldnt afford it.?
If everyone who had a lease/PCP were to have to actually pay the full value there would be carnage. I view them in the same light as a mortgage on 5/6/7 times your earnings.

No.

It's more about making best use of your money.

As I said why would I waste my hard earned cash on buying something that is guaranteed to depreciate in value at an alarming rate.

And, as for the generational argument I am 70.

 

[Bunkermagnet]

No.

It's more about making best use of your money.

As I said why would I waste my hard earned cash on buying something that is guaranteed to depreciate in value at an alarming rate.

And, as for the generational argument I am 70.

I agree fully with the bold bit.
As far as depreciating value, aren't you just really paying a finance company for the depreciation of their car?

The thing for me though, it's not about those using their money wisely but more about those taking on these lease/pcp's when they cannot afford the real costs and that is the problem.

 

[Deleted Member 1156]

Don't think anyone is disputing most of us need a car...

It's whether leasing or buying is more cost effective.
Obviously buying is - but that does n't always get you the nice shiny car you want!

I wasn't disputing it either. I was commenting on the point that we just have to accept car payments whether we choose to buy or lease.

 

[Dibby]

I agree fully with the bold bit.
As far as depreciating value, aren't you just really paying a finance company for the depreciation of their car?

The thing for me though, it's not about those using their money wisely but more about those taking on these lease/pcp's when they cannot afford the real costs and that is the problem.

Exactly, the key distinction is whether you had the capital to buy the car, and are reallocating it elsewhere to earn money, or if you didn't and are using the lease to obtain something you could never have bought.

If it was purely about depreciation, the optimum strategy would be to lease a used car that has taken the biggest depreciation hit, and that you could have bought outright, providing the APR on the lease is less than the APR from your alternative investment of the cash that would have been tied up in the outright purchase.