Mark up between selling and for sale price

[croyde]

I know dealers like to make a profit on used cars and yes, they have to prep the car, service it, polish it and in my case, fill a stone chip on the bonnet.

All 4 wheels totally unkerbed btw.

Sold mine to dealer on Wednesday and it's already in the showroom at £6500 more than I got paid for it.

In fact it's on for what I paid for it exactly one year ago but with nearly 3x the mileage.

Consoling myself that it cost me 'only' just under £540 a month, plus I just swerved the service and road tax due at around £1200.

Had some fantastic drives in that car, and it still had me smiling just for a short hop to Tescos.

Highlight being my road trip to Tenerife, back in February.

I had hoped that the Alpine would be my forever car, well until I couldn't get into it daily squats help at my age.

But no longer working, and having to be sensible and practical. It was a lot of money to be left out on the street every night.

Gutted.

If anyone is interested in any Alpine extras, they can be found right here on Market Place.

[Austin_Metro]

Sorry to hear you’ve sold it. Hope you had great fun in it.

[Gourockian]

It does always seem a bit much when you see the difference in price doesn't it.

Yet they'll only be able to sell it for a price the market will bare, right?

In this case I imagine customers are quite happy to spend a few thousand to avoid the (perceived) risks of a private purchase and experience the fancy showrooms (next to the Dacias of course)

[Chris Peacock]

croyde said:

Consoling myself that it cost me 'only' just under £540 a month

This is the best way to look at it. That's a bargain to put a load of fun miles on an Alpine for a year. My brother paid more than that to lease a 4 pot diesel SUV.

[craigjm]

What they have it up for sale for and what it will actually sell for are of course two different things. Can’t blame them in having the opening barter price higher than what they expect to achieve. Be interesting to see how long it takes to sell

[Chris Peacock]

Not to mention of course any profit made from the buyer using their finance on the car which will probably make them a good few quid.

[Trevor555]

Chris Peacock said:

croyde said:

Consoling myself that it cost me 'only' just under £540 a month

This is the best way to look at it. That's a bargain to put a load of fun miles on an Alpine for a year. My brother paid more than that to lease a 4 pot diesel SUV.

This..

That's only £124.62 per week.

[detee]

croyde said:

I know dealers like to make a profit on used cars and yes, they have to prep the car, service it, polish it and in my case, fill a stone chip on the bonnet.

All 4 wheels totally unkerbed btw.

Sold mine to dealer on Wednesday and it's already in the showroom at £6500 more than I got paid for it.

In fact it's on for what I paid for it exactly one year ago but with nearly 3x the mileage.

Consoling myself that it cost me 'only' just under £540 a month, plus I just swerved the service and road tax due at around £1200.

Had some fantastic drives in that car, and it still had me smiling just for a short hop to Tescos.

Highlight being my road trip to Tenerife, back in February.

I had hoped that the Alpine would be my forever car, well until I couldn't get into it daily squats help at my age.

But no longer working, and having to be sensible and practical. It was a lot of money to be left out on the street every night.

Gutted.

If anyone is interested in any Alpine extras, they can be found right here on Market Place.

Is marketplace the classified, I could only see cars.

[fridaypassion]

Assuming a main dealer that would be about ok. I'm an indie an on an Alpine would work on less than that.

A bit more info on how dealers work and if you break it down there a lot to more to it than its £6000 more

So first off 6k is actually 3k as we have a nominal tax rate of 50% £1000 of that is going straight to the tax man in VAT this is regardless of any spend even if they spent £7000 on repairs. It's a grossly unfair tax but we have to pay it. Then you have the usual Corp tax/directors dividend tax/personal income tax. Big dealers also have NI and pension contributions.

Premises and staff costs in big dealers are truly eye watering for obvious reasons. Their insurance will be £30k Business rates probably more.

I would imagine on the A110 side the dealers make very little I would be surprised from that £6000 if it added £1000 to the net profit of the business on their accounts. Generally it wouldn't surprise me if the Alpine concessions might be a loss leader or at least essentially ended with incentives from Renault rather than cash generates from sales. It may come good for them if the EV stuff takes off.

Moderator edit: no advertising

[sniffer63]

I'm always curious when VAT gets mentioned. Surely any chargeable VAT would be able to be offset against VAT deductible operating/material cost(s)

[Wacky Racer]

I p/x my motorhome for 39k two weeks ago.

The dealer sold it for 46k four days later.

I wasn't bothered because I only paid 41k for it (new) six years ago, and it wanted a new cambelt and other routine service work costing nearly 2k.......which the dealer did at their cost before they sold it.

Motorhomes seem to hold their values really well compared to cars.

[Panamax]

fridaypassion said:

So first off 6k is actually 3k as we have a nominal tax rate of 50% £1000 of that is going straight to the tax man in VAT

The VAT margin scheme on used cars charges VAT at 1/6 (one sixth) of the mark-up so, yes, there's about £1,000 of VAT.

But what's the other £2,000 of tax you're talking about? Corporation tax is charged at 19% on net Profit (not margin). If profits exceed £250,000 p.a. the tax rate is 25%

"Profit" on this car wouldn't be anywhere near £5,000 once preparation and overheads are taken into account. Let's say £3,000 so the corporation tax shouldn't exceed £570 (or £750)

To put it another way, how do you get to that "nominal tax rate" of 50%? It sounds very high.

[fridaypassion]

sniffer63 said:

I'm always curious when VAT gets mentioned. Surely any chargeable VAT would be able to be offset against VAT deductible operating/material cost(s)

It is but we still have the VAT margin to pay regardless. Our output VAT on cars is essentially generated from fresh air. On a car that already had VAT paid on it new. If you buy a car for 10k spend 9k on it and sell it for 20k you still pay VAT on the 10k price difference. It would work a lot better if second hand cars were VAT exempt as they are to the buyer but not to us sellers.

I wouldn't expect any sympathy of course but it's useful for the public to know that The Government take a sixth of the margin regardless straight away.

Re motor home sellers that sounds like a tight margin. I can't begin to imagine the level of headache they get with warranty/rectifying electrics/hab checks etc plus they probably can't trade for at least 3 months over winter. Tough business have seen a couple of sites locally close.

[croyde]

detee said:

Is marketplace the classified, I could only see cars.

Took me a while to find it. It's one of the forums.