on road handling fees

[xrapidx]

If you really want to get back at the dealers, then start doing your own work on your car and import your spares if you need them - the OTRC is a drop in the ocean.

I did exactly that on my S2000, and got a guy who worked for Honda to fit them privately, some parts Honda had over a 1000% markup (small parts like bolts).

Not only that, it was quicker to order from overseas, as Honda didn't keep stock for S2000's, so there was always a 21 working day delay. Ordering myself was a max of two weeks.

Ordered clutches, a diff gears, seals, a roof, roof catches, alternator, CMC, filters..... bolts, nuts.... the list goes on. Local is a rip off.

 

[ToxicBunny]

Sorry, but this statement underlines the fact that you have absolutely no idea what it costs to run a business/dealership.

I have probably said this before, but I'm not going back to check. Our particular dealership which is nothing special or grand in the whole scheme of things, costs 1.5 million, simply to open the doors every month.

Where do we find the 1.5 bar, first of all, and then hope like hell that we are actually making slightly more than that? "Giving away" 3000 per car is obviously going to impact on the final profit of the business - HOWEVER - selling cars is not where the money is made in the end, but in spares and workshop work - the ONLY two departments that do make a profit every month.

If you really want to get back at the dealers, then start doing your own work on your car and import your spares if you need them - the OTRC is a drop in the ocean.

I already do my own work on my car where I can, and I'm replacing my overly complicated car with an older one where I can do all the work myself.

But in terms of making a dealership profitable, I am aware that selling the vehicle isn't where the money is made, but its where the interaction with the customer begins, and if the customer leaves with a bitter taste in their mouth (as the OTRC does or any additional "fees"), it doesn't bode well for the rest of the relationship.

Its relatively simple business, you may not lose much money but the customer goes away thinking "This is a great dealership, I will recommend them to my friends, and will come back"

 

[HapticSimian]

There seems to be no rhyme or reason to parts prices, and from what I've been exposed to that holds true regardless of manufacturer. Some bits are perfectly reasonably priced, others are utterly, insanely ridiculous. As an example: A Citroën C4 Picasso's headlight - a big, complex unit - goes for about R1.8k. Measure that against an E39 5-series BMW's at almost R10k, for something no more complex (yes, both halogen). Then, on the other end of the scale, we recently imported a clutch kit for the self-same Picasso from Sachs in Germany; the entire kit, that's friction plate, flywheel, thrust bearing, the works, cost us less to import than the dealer wanted for the flywheel only. To boot, the clutches supplied to dealerships are a brand regarded as inferior to Sachs.

It's... annoying.

 

[ToxicBunny]

Unfortunately, and I say this with the utmost respect, your opinion just isn't terribly well informed in this instance.

The motor trade is a bit of an oddity, in the sense that it deals in very expensive consumer goods with proportionally expensive ancillary costs, coupled with oddly low profit margins. That R3k that you just want the dealer to absorb? Let's take an average month at a VW dealer, as that's what I'm most familiar with: that R3k will equate to anything between 15% and 60% of the profit margin on an average transaction. Sure, the odd Touareg will pay for a few registrations, but show me any business where one would even consider writing off half the possible profit on a given transaction because, hey, some bloke doesn't want to pay extra... and, for added fun, he has this odd idea that he is entitled to discount because he thinks paying cash makes him ****ing special.

The spurious analogies to chocolates and fridges above neglect another element of the equation: retail stores are supplied with stock in an immediately saleable condition. Do you think Makro might adjust their pricing a bit if they had to hire people to complete final assembly of their fridges once delivered? Cars are supplied to dealers, necessarily, in a condition far from roadworthy, because they are prone to spending months in stockyards before needing to be transported hundreds or thousands of kilometres to showroom floors. No non-critical fluids, no fuel, sticky-as-**** protective sheets on horizontal panels to combat industrial fallout, weeks or months of caked-on dirt, unadjusted control systems, various small bits of trim in little plastic bags in the boot... and, of course, unregistered.

People need to fix all these elements before you drive off, and you will pay their salaries one way or another. As has also been said earlier, your (in a general sense) smugness at not paying a R3k fee is severely misplaced - you just got a R3k smaller discount than you would have otherwise.

I know lots of business where their "expenses" easily add up to 60% of the potential profit of an item, its called the cost of doing business.

As for my smugness, I actually didn't pay R3k less or get a R3k smaller discount, I don't buy new cars and never will purely because they're overpriced in my opinion. I actually cancelled the deal for the used vehicle I was going to buy because I didn't like the terms the bank offered me and I don't NEED to buy another vehicle, and the dealership refused to give me a discount on the vehicle even before the transaction started so I lost nothing.

 

[HapticSimian]

I know lots of business where their "expenses" easily add up to 60% of the potential profit of an item, its called the cost of doing business.

This is a meaningless statement. 60% of what; what are your remaining costs of doing business in relation to your remaining profit? I think, if read without prejudice, Fazda's comments and mine give you a fair snapshot of the realities inside a dealership. There simply is no possibility of absorbing these costs...

As for my smugness, I actually didn't pay R3k less or get a R3k smaller discount, I don't buy new cars and never will purely because they're overpriced in my opinion. I actually cancelled the deal for the used vehicle I was going to buy because I didn't like the terms the bank offered me and I don't NEED to buy another vehicle, and the dealership refused to give me a discount on the vehicle even before the transaction started so I lost nothing.

I went to specific effort to qualify my use of 'your' as being in general. No need to be so defensive.

 

[ToxicBunny]

This is a meaningless statement. 60% of what; what are your remaining costs of doing business in relation to your remaining profit? I think, if read without prejudice, Fazda's comments and mine give you a fair snapshot of the realities inside a dealership. There simply is no possibility of absorbing these costs...

Ok, let me qualify it then, Business buys products for x value, they sell it for y value. Their costs for selling said product are 60% of the difference between x and y. Make sense now?

The problem with realities in a dealership is that they seem to engender a mistrust from the consumer from the get go, and this OTRC issue is just one of them, and a relatively simple thing to resolve to make consumers trust dealerships slightly more.

I went to specific effort to qualify my use of 'your' as being in general. No need to be so defensive.

Not really being defensive, just clarifying my stand on this whole thing. I am very much against buying a new car, if only because of the inherent massive depreciation hit you take the minute its driven off the floor, as well as for the exorbitant costs that new cars go for.

 

[supersunbird]

There simply is no possibility of absorbing these costs...

Who said you must do that? We saying include it in the price and be done with it.

 

[ToxicBunny]

Who said you must do that? We saying include it in the price and be done with it.

In terms of a new car, they would have to absorb them, since the manufacturer advertises the final price of the vehicle without consideration of the expenses of the dealer, but I'm coming from the point of view of it making consumers happier, and thus getting more new business as well as repeat business from the consumer.

Yes its a lower profit margin per deal, but it should turn into more profit from more deals overall.

 

[HapticSimian]

Ok, let me qualify it then, Business buys products for x value, they sell it for y value. Their costs for selling said product are 60% of the difference between x and y. Make sense now?

More words, no more meaning. Perhaps I expressed myself poorly, so let me try again: 40% nett profit per transaction might allow you to remain in business if it amounts to R25k, but not so much if it amounts to R5k - it's relative, and dealer margins on cars simply don't allow even for consideration of such practices.

The problem with realities in a dealership is that they seem to engender a mistrust from the consumer from the get go, and this OTRC issue is just one of them, and a relatively simple thing to resolve to make consumers trust dealerships slightly more.

I agree with your sentiment, but I stand by my assertion that it is simply an unworkable solution. However, because I respect the sentiment, I was always upfront with prospective buyers regarding additional costs. 100s of cars put on the road, and not a single complaint fielded regarding on the road fees. Communication is paramount.

Not really being defensive, just clarifying my stand on this whole thing. I am very much against buying a new car, if only because of the inherent massive depreciation hit you take the minute its driven off the floor, as well as for the exorbitant costs that new cars go for.

But... the smell...

3 years or so old; that's about as new as I'll personally go. But people want shiny things, and I happily facilitated that for a fair few years. Who knows... I might even do it again, just not in a sales capacity. Ever again.

 

[ToxicBunny]

More words, no more meaning. Perhaps I expressed myself poorly, so let me try again: 40% nett profit per transaction might allow you to remain in business if it amounts to R25k, but not so much if it amounts to R5k - it's relative, and dealer margins on cars simply don't allow even for consideration of such practices.


I agree with your sentiment, but I stand by my assertion that it is simply an unworkable solution. However, because I respect the sentiment, I was always upfront with prospective buyers regarding additional costs. 100s of cars put on the road, and not a single complaint fielded regarding on the road fees. Communication is paramount.


But... the smell...

3 years or so old; that's about as new as I'll personally go. But people want shiny things, and I happily facilitated that for a fair few years. Who knows... I might even do it again, just not in a sales capacity. Ever again.

Fair enough, if the profit margin is so low that a R3k fee can't be absorbed for great long term profits, then so be it.. but then the motor industry needs to work on the perceptions of their profit margins, because the assumption is that they're large (R50k+ on R250k car)...

Completely agree, communication is paramount and its probably why I'm so anti the OTRC cost purely because the salespeople have always tried to sneak it in at the point of signing the OTP and just gloss over the costs...

Yeah about 3 years is as new as I will go as well, hell I'm stumping up for a 12 yr old car atm, purely because it will be easy to maintain until such time as finances allow me to have a "better" car again.

 

[HapticSimian]

I think the manufacturers are quite happy with the perception that dealers make big bucks, as it shifts focus away from them. Again an example: The Golf I, in original guise and as various CitiGolfs, sold for near 30 years on the local market. They were locally built and very popular, so one can assume the costs of the original production line were recouped rather quickly. This line was likely pretty much unaltered throughout, as evidenced by even the very last CitiGolf built having a rubber plug on the left-hand front fender where the original Golf's aerial was located. Mass production on a long-since paid for production line = massive profits, right?

On average, after discounts and registrations and whatever else, about 6% on the CitiGolf sales I saw processed. There was a helluva lot of money being made, but not by dealers.

 

[ToxicBunny]

I think the manufacturers are quite happy with the perception that dealers make big bucks, as it shifts focus away from them. Again an example: The Golf I, in original guise and as various CitiGolfs, sold for near 30 years on the local market. They were locally built and very popular, so one can assume the costs of the original production line were recouped rather quickly. This line was likely pretty much unaltered throughout, as evidenced by even the very last CitiGolf built having a rubber plug on the left-hand front fender where the original Golf's aerial was located. Mass production on a long-since paid for production line = massive profits, right?

On average, after discounts and registrations and whatever else, about 6% on the CitiGolf sales I saw processed. There was a helluva lot of money being made, but not by dealers.

Yeah too true actually, I know the Manufacturers make stupid money, I've seen some of the "cost" sheets associated with vehicles.