An end to dealerships

[Raymondo111]

As I have leased my cars over the last 6 years or so most of my contact has been online anyway, I just find the best deal on a specific car and then if I want a test drive I go to the nearest dealership, if the dealership is able to match the price I have been quoted then I will go with them. If not I go with the online price and the car is delivered direct to me by the dealership. It has all worked very well, the car is serviced by my local dealership so they get that part of the business. My previous XC60 was done this way and my current XC40 was delivered on a low loader from Grimsby by the dealership with 8 miles on the clock.

[Atlantic Lipsalve]

It's one of the advertising lines of Cazoo and Cinch, the two used car things on the TV at the moment... The thing is no two used cars are the same....

I guess that's why Cazoo and Cinch offer a 7 day and 14 day, respectively, money back guarantee and will come and pick the car up if you're not satisfied.

Are Volvo suggesting online for their second-hand range?

[frtsrm]

That's the rub. I've no problem with ordering on line if I have seen and test driven the car. What I really object to is a Tesla/Polestar approach where there are set prices and no discounts and no negotiation even on part exchange. I can see why Volvo want to do it - no discounts equals bigger profits but don't think I will be going there. Some people will like it as it takes away the need to negotiate or shop around and won't mind the higher prices.

I think it's the dealer "discounts" are the factor that causes higher list prices. List prices are always higher than they should be because car manufacturers factor in discounts. The price achieved after exhausting bargaining is more like the "real" price of the car. So, in theory, by eliminating the bargaining factor, online direct sales with set prices should bring about prices which are lower than what the list prices would be otherwise.

[Atlantic Lipsalve]

You think that prices will come down in real terms then?

I think the days of exhaustive bargaining are long gone. These days it's simply a matter of getting the best price on CarWow and insisting your local dealer matches the price or you'll walk and get the CarWow price.

[Deleted User 3359]

Back in the day (83 to 86), I was GM at a Volvo Dealer (Lex Streatham). New car margins then were 17.5%, but my site had been "told" to push fleet sales to two leasing companies and a large national brewer. The state when I arrived was that new car volumes were enormous, and that the site was lossmaking. The reason was simple, all those cars were sold at 15% discount, meaning we retained 2.5%. We rarely saw one of those vehicles again. The service dept made a gross profit margin on labour of about 40%, and within a year of focussing on local and used sales, we became profitable, even though we sold 200 new cars a year fewer... Currently I don't think new car margins are anything like 17.5%...