Dealer commissions

[moptisam2]

I have been told that dealers make about 9% on new cars. Does anyone know how much they make on the extras?

I have spec'd up my new A4. It includes just over £4000 of extras. In view of the rather ridiculous prices for some extras I feel dealers must be making more than the 9%.

Does anyone have any reliable information?

I want to place my order by the end of the month.

Thanks.

[Bloater]

I've no idea about exact figures, but when I ordered my new A4 2 weeks ago, the salesamn was haapy to give 10% off the car. He didn't need to speak to anyone more senior for that.

He did let on as well, that as a private buyer, he would still get his commission, and I also understand that the dealership as a whole gets quarterly bonuses from Audi based on numbers of cars sold. Therefore it is probably worth it to a dealer to make very little on a car, knowing that thousands are coming from Audi.

This is only my understanding, I have nothing to do with car dealerships, so am willing to be corrected is its wrong.

Bloater

[MalcQV]

I have been lead to believe the money is in used cars and servicing. This is not 1st hand info though.

[dansansome]

yep. similar to the aircraft industry. very little profit in the actual aircraft sale. all the money is made by servicing, upgrading and parts.

i wouldnt be at all surprised to find out if this is true of the car insustry.

[the_gasman]

I've no idea about exact figures, but when I ordered my new A4 2 weeks ago, the salesamn was haapy to give 10% off the car. He didn't need to speak to anyone more senior for that.

Bloater

Was this 10% of the RRP or the OTR price? 10% of options as well? Just to help me with bargaining if I decide to buy one.

Thanks,

Martin

[Bloater]

It was 10% off the on the road price, complete with options.

Hope this helps.

Bloater

[moptisam2]

Thanks Bloater. That's very useful to know. All the talk seems to be that 'discounts will be difficult to get', as the car seems to be building a good name for itself, even now.

It means I'll be negotiating a bit 'harder'.

Thanks again.

[Moodshadow]

Have a look at the brokers, motorlogix, drive the deal etc, they are offering various discounts and if you do your homework they know you aren't going to be fobbed off - I'm waiting for the 170 engine to be released before I order but this is the route I am likely to take - it worked well three years ago when I bought the A3 for the wife

[moptisam2]

Thanks Moodshadow, I will.

I've already had one dealer in S. Yorkshire who offered me a low part-ex and full price on a £ 27 530 spec. I told him 'no way'.

One down.....

[John140]

I guess dealres are heavily discounting (by Audi standards) new old-shape A4's right now, so 10% off the OTR price doesn't surprise me at all. I got 9% off my new A4 AVant a year
ago. I think it is pretty true that in some dealerships they are willng to do new car sales at 'break even' as long as the servicing and 'Audi approved used' business is strong.
Personally I bought new as there seemed to be so little saving in buying the same car 8 months old with say 8K on the clock.

[KABKAT]

As dealers near end of their month/quarterly targets they are more likely to share registration bonus money per car to get the deal. This happens throughout the car trade and as Audi are on an upward spiral they will never have a better opportunity to be the laeding German brand (Sales wise). Friends who have worked in Audi dealers tell me the targets are very challenging - Audi are aggresively selling their cars just now. 10% on most of the range should be possible.

[imyahmed]

I've no idea about exact figures, but when I ordered my new A4 2 weeks ago, the salesamn was haapy to give 10% off the car. He didn't need to speak to anyone more senior for that.

He did let on as well, that as a private buyer, he would still get his commission, and I also understand that the dealership as a whole gets quarterly bonuses from Audi based on numbers of cars sold. Therefore it is probably worth it to a dealer to make very little on a car, knowing that thousands are coming from Audi.

This is only my understanding, I have nothing to do with car dealerships, so am willing to be corrected is its wrong.

Bloater
which dealer did you go to?

[Bloater]

I'm not going to tell you the exact dealer, but I live in the North Bucks, and not far from the concrete cows. There are a few dealers around here, so take your choice. I believe mopatism did the same in this area, and came out quite well.

[lalbert]

Hello, in 21.04.2008 I took over my white 1.8T - 160 hp, A4 - with s-line sport packet - 18" start design wheels, xenon, bluetooth mobile phone connection, heated front seats, rain sensor.

I got 10% of the full price of the car without any special negotiation.
I love this car :-)

[moptisam2]

Bloater is quite right. I have ordered my new 2.0 TDI in the area he mentions. I live in the North and saved over £1000 from the best deal I was offered by one of the dealers in the North West that I visited - and that 'Northern' deal was hard to get (the salesman said I had misheard what he said and the part-ex value was only if I traded in the car immediately!).

I don't know whether it is the fact that 'Southerners' are more willing to do deals or since, as I have been told, there are more BMWs than Audis in the South and more Audi's than BMWs in the North (where I live I see at least 6 Audis for every BMW) that dealers in the South are trying harder to get Audi to their top manufacturer's spot.

Whatever it is, and I told this to the dealer who lent me a new A4 for 2 days, in the expectation of selling me a new car, that, if I am able to change again in 3 years, I may not even visit any dealers in the North, and head straight for the South.

[Teflon]

Bloater is quite right. I have ordered my new 2.0 TDI in the area he mentions. I live in the North and saved over £1000 from the best deal I was offered by one of the dealers in the North West that I visited - and that 'Northern' deal was hard to get (the salesman said I had misheard what he said and the part-ex value was only if I traded in the car immediately!).

I don't know whether it is the fact that 'Southerners' are more willing to do deals or since, as I have been told, there are more BMWs than Audis in the South and more Audi's than BMWs in the North (where I live I see at least 6 Audis for every BMW) that dealers in the South are trying harder to get Audi to their top manufacturer's spot.

Whatever it is, and I told this to the dealer who lent me a new A4 for 2 days, in the expectation of selling me a new car, that, if I am able to change again in 3 years, I may not even visit any dealers in the North, and head straight for the South.
Moptisam,

I reckon I've got a pretty good idea who your local dealer is, they also have a string of VW franchises. For both VW and Audi they initially try to offer low trade-ins and close to RRP prices. Big new showroom being built that needs to be paid for don't y'know!

If you go in with evidence of a good main dealer price from somewhere like Drivethedeal.com and are particularly hard nosed about negotiating, they will be prepared to move unless you want something in tight supply like an RS4 or a GTI. But, I can't get past the "I'm doing you a favour" attitude and the dreadful quality and customer service in the workshops, so they can stick it anyway.

Their fixed-price servicing costs always seem higher as well, so I've been willing to have a day out somewhere else to get a decent price on my A6

You don't need to go all the way down south, just pick up the phone and try all the dealers within, say, an hour's drive and you'll get some good deals if you are confident and have a target price. I've bought 3 new cars in the last 12 months, all of them from VAG dealers just outside South Yorkshire.

I hope this helps,
Teflon


p.s. If you look on some of the American sites like VWVortex, people regularly publish the net prices to dealers complete with state by state shipping charges, so that folks can see just how much negotiating room there really is. There are some wild claims about how close to zero dealer profit people buy cars for, but at least some of them must be true. Any disgruntled Audi UK salesmen willing to spill the beans?

[JohnH99]

I have been quoted full list price for a 2.0 tdi multitronic S line Avant with a few extras with a forward trade in (July / August). The trade in isn't too bad but when I mentioned discount I was told that it wasn't available as the avant model was "too new" but they would be prepared to knock off a couple of hundred to avoid losing the deal. The problem is that all the dealers in my area are part of the same group so I'm not sure if they would compete.

[browellm]

I have been quoted full list price for a 2.0 tdi multitronic S line Avant with a few extras with a forward trade in (July / August). The trade in isn't too bad but when I mentioned discount I was told that it wasn't available as the avant model was "too new" but they would be prepared to knock off a couple of hundred to avoid losing the deal. The problem is that all the dealers in my area are part of the same group so I'm not sure if they would compete.

Trade-in always muddies the waters when negotiating discount. Bear in mind that the dealer always has an overall pot of money available, and he will always take into consideration what he can get for your car with his trade buddies, balanced against his desire to discount and how close he is to his monthly/annual targets.

IMO, it gets a lot simpler if you take the trade-in out of the equation. Personally, I would always sell privately via the Autotrader website (not the mag, which is extortionately expensive and reaches far fewer people). It's really not at all difficult to sell your car for more money than the trade will ever offer you, and still give a private buyer a decent deal.