On Sunday I went to an Audi dealer to trade in my golf 1.6.se (02 reg , 8500, import full uk spec) for an audi tt.
I was offered £7500 because it was an import - the dealer rang up the underwriting dept and then gleefully told me that this is the best price and that's it normal in the industry to do this.
What annoyed me was that there's no difference between this and a UK sourced car and it seems that car dealers are carving up the car market (I'm sure that this is illegal because an indirect effect of "discriminating" against imports on resale/trade-in price is to prevent people buying them in the future esp if a smug dealer going to knock off a couple of grand off book price)
Comments/course of action (apart from selling car privately)would be welcome. My ideal would be to lodge a complaint with the Competetion authorities in the UK to see what they say.
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Just go somewhere else with it. That or ask the dealer to sign a piece of paper saying he'd put it on the forecourt for a grand less than an identical UK-sourced car.
Bet he wouldn't sign...
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I agree I doubt if he'd sign - as for going elsewhere I think the same issue'll come up
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This is a well acknowledged situation and has been spoken of here before now particularly with regard to the ethics associated with whether to tell the dealer it's an import or not. I think you will find that your experience varies from dealer to dealer although maybe all VAG dealers have knocked their heads together and have decided to implement the situation you've encountered. As you say a private sale may well be the best way to go.
VAG dealers on this site don't seem to be as well regarded as others - smug and a tad dismissive seems to have been the overall attitude.
There is, in all honesty, the question of the 3 year warranty on your car. Japanese imports usually have the full 3 year factory warranty as opposed to most others which have 2. Unless, of course, you've extended it yourself. Also the service book may not show a UK dealer as being the supplier which, despite the UK spec., may put off some prospective buyers.
KB.
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I read Perturbed's thread with interest and it proved valuable.
However I feel that the way the car industry works is unfair and especially in respect of resale trade vale of imports - I'll accept a a small difference due to 2 year warranty but almost £3000 less than UK car...hmmm.....it's a bit rich from dealers who've been milking us for years and in my opinion seem to want to continue to do so. (I know private sale is he way forward - yes I'll be up front about it being an import)
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Hold on a minute!
I seem to recall a thread a few weeks/months ago when someone complained that they bought a car from a dealer who did not disclose that a car was an import. The weight of opinion on that thread was that the dealer had acted wrongly, that a punter has the right to know and that it was taken as read that an import was worth less.
If an import is genuinely worth less, the a dealer is perfectly entitled to offer a lower trade in. If it is not worth less, then sell it privately.
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I guess an import may be worth a little less, but by all accounts many dealers are punitively undervaluing imports - no doubt to 'encourage' the punters to buy only from UK sources. Just be thankful it wasn't an import Mercedes - a friend of mine has one of the early 'new' C-class and our local dealer offered him something around 30% under 'book', nicely eliminating his 'saving' when he bought it new.
I wonder if cars collected from the German plants under the Mercedes "factory collection scheme" are similarly valued at trade-in time?
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Ridiculous! Three grand under list price!?! 30% less than book!?!
When I traded the Fiesta in they didn't even bother asking if it was imported, until they realised it was bought in Slough :) They asked, so I told them that it was from the Republic Of Ireland, it made no difference to their trade in, especially as mine is actually better equipped than a UK Fiesta Ghia. If he had tried to undervalue it, I would have been walking, I know what my car is worth on a forecourt, as the dealers provide a 2 year used car warranty anyway, a buyer can't even claim warranty issues as a reason for price reduction.
Go elsewhere, they may be more willing to do a deal... oh, and it was a Ford main dealer that I'm talking about. In fact, so far so good, so a big recomendation for Jennings Ford Sunderland. I'll confirm that recommendation when I actually get my car...
Blue
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The situation with Ford, GM , Peugeot etc. trade-ins is probably a little easier. I guess the problem is more acute with more up-market brands such as M-B, BMW, Audi etc. In the case of my friend's C-class, for example, it is not that old and most buyers of s/hand examples would tend to go to a dealer - it could be quite hard to sell it privately. Moreover there are not that many dealers to 'shop around' at.
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Ravster: Look at it this way -
Suppose I foolishly bought an identical Golf 1.6SE from a VW/Audi dealer at the same time you saved £5000(?) by buying yours by importing it.
We go along to the dealer together to part exchange for identical Audi TTs.
He offers me £3000 more for my car than yours.
Is that fair or not? Or do you expect the dealer ignore the £5000 he lost but you saved by buying abroad?
Basically, what he is saying to you is this - you did not buy from a UK dealer in the first place so now that you want the TT, deal on my terms, or go and buy elsewhere (import?) again. There is no retail price-control in UK. Traders and customers are free to buy/sell or not buy/sell at any price that suits them.
In English, there is a saying "Having your cake and eating eat".
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For once I'm with MB's slightly abrupt stance.
The dealer can downvalue a trade-in for wrong colour, unpopular engine size, a towbar, bodykit, reg number that nearly spells a rude word. He can even offer very low prices on Citroens because he doesn't like them.....or knock £1K off because he's got a hangover.
Up to you then to drag it round the other dealers and see what their thoughts are. If they all go the extra mile then dealer one will fail to get any business. If they all say the same then you've established a true market value for your car.
It might not feel good but it's life.
MM
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MB
Look at this another way.
You buy a 4 bed 'estate' home for say £200,000.
I buy a plot of land next door for £50,000, build an almost identical house to yours for another £100,000. Because I put a lot of time, effort and work into project managing the development, I save £50,000.
In three years time, should my house be worth less than yours?
The fact that a dealer 'lost out' or didn't because you didn't buy there is irrelevant. You could have bought from another dealer, so he equally lost out on the original sale. Volkswagen, however didn't lose out, as they sold a car.
I do agree that he should go elsewhere, or even sell privately.
Jonathan
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Jonathan
As you rightly point out you would save 50K but you would have had the hassle. So for example I can go to work and earn the 50K (I wish) or I can build the house myself. That's the trade-off; the 50K still has to come from somewhere. If you buy an import you take the hassle and save some money. As it turns out that was the easy part; in order to make the saving stick you have more hassle to contend with at the end of the deal too. This is why people still use dealers: it's (supposed to be) less hassle. For many people that's worth the extra money and if the dealer wants to protect his margin by offering less for imports, who can really blame him? In effect private importers have set themselves up in competition with the dealers. So now they have to compete; that's how markets work.
Chris
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Complete red herring Jonathan.
This is not a hypothetical situation...it's reality and sometimes reality can be tough.
The reality is that imported cars "save money" on the initial purchase and the purchasers run around telling all and sundry what a great deal they did. Those same people then whinge to high heaven when they want to trade the same car in and get offered less than an equivalent UK car.
The reality of the housing market is that the price is more about location than house. Having built a house some years ago I would suggest you should get more for a self build than a mass operator build. Controls by a supervisory architect are significantly more stringent than someone who just wants to get "boxes" out of the ground as quickly and cheaply as possible.
If you buy an import you will not get as much on a trade in. That's the reality so stop moaning.
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The situation might be somwhat different if it could be shown that there is a deliberate policy for franchised dealers to make low offers on imported cars without justification. If it were true that on a private sale an imported car is worth the same, then there is no justification for dealers to offer low prices. Their conduct could then be seen as a deliberate policy to discourage imports, and this in turn might be seen as a breach of UK and European competition law.
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Agree with Joe on this one.
If there is a genuine difference in the desirability of the cars, it's only fair that this should be reflected in offer prices. I think there is some difference, over and above the year's less warranty, probably in the upper hundreds on a car like this. With the warranty, it means that this p/x price is fair enough if he'd only have offered £9k on an equivalent UK car.
If, on the other hand, the car will be sold for the same price (or much less than the difference in trade in offers) then I agree that this looks very like a breach of article 28 of the European Convention (free movement of goods) although an individual dealer with this policy will in practical terms be well below the radar.
As to what you can do about it - either find another dealer or better still, sell it privately. It should be a comparative breeze to sell it at £9995 as long as the market for private sales will deal with anything over £3k... sometimes it does, sometimes it doesn't.
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Are you implying then that you should be able to force a dealer to buy your car off you, at a price you want?
And before you comment that you want a "fair price", then why should you be able to demand this? Since, in theory, there is little or no difference between an import and UK car, then any difference in price is purely down to the lower desirability of the import. Why do you think that you can quantify this effect better than the dealer, who sells cars every day?
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Erm... are we all not getting a bit overcomplicated over what is essentially a simple point.
You have two virtually identical cars, both are imports as VAG does not make Golfs in UK, the only difference is one is 'official' and one is not. The dealer is clearly seeking to offer substantially less for an unofficial import. Why is he doing this? It should be all the same to him, tin is tin. The answer is he is doing it because he can get away with it. But why can he get away with it, the cars are virtually identical?
The answer, as we all know, is that the VAG dealers are acting in concert to exclude unoffical imports from the VAG network and 'punish' those who buy them. As stated above this is completely illegal under EU law, but as with all things you have to prove it.
I believe an interloper with a small recording device at a meeting of VAG dealers would do the trick...
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I believe an interloper with a small recording device at a meeting of VAG dealers would do the trick...
Yes, that should be no problem. Maybe the same interloper can find out where Elvis has been these past few years.
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Ooh, such suspicious minds...
...sorry, just had to
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>>If it were true that on a private sale an imported car is worth the same, then there is no justification for dealers to offer low prices.>>
Thanks to all who saw my point of view, even those that think I am blunt.
Joe and DavidHM: my final, simple, "blunt-words" on this -
There is no law that says you have to buy from a franchised or non-franchised-dealer or broker at a given maximum or minimum price. There is no law that says dealer must buy any car off you at a minimum or maximum price. He can offer you zilch for it, or maybe even charge you for taking your scrap off you, or offer you a price above list (eg. for a desirable 2nd hand MINI). You live in a free society where you (and the seller) can buy and sell where you like. The price is a matter for mutual agreement between the parties. There is no compulsion. End of story.
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There is no compulsion on him to offer a fair price, I agree... but that's not quite my point.
There is an obligation NOT to distort the market for goods supplied in one country but consumed in another, as long as both countries are within the EU. The origins of this are as much ideological as legal, but they are there.
Secondly, let's assume that this car would sell for £11500. A dealer might normally offer £10k for the UK car (to preserve residuals on new ones) but only £7500 for the import (to discourage people from importing). An individual dealer can't manipulate the market this way but a franchise network can.
More to the point, his notional £1500 of margin has now gone up to £4000 - so even if only 40% of customers agree to the lower p/x price, he's up on the deal. Therefore, to say there is no justification for offering a lower price for imports if there is no (or a much smaller) difference would only be true in a perfect market.
Where there is a limited market of VW franchises (i.e., the most obviously contactable buyers of VW Golfs) it is very easy for one side of the transaction to take advantage of this position. All the seller can do is attempt to improve the market by making his offer available to more buyers by selling privately or contacting more dealers who handle this kind of car.
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\"There is an obligation NOT to distort the market for goods supplied in one country but consumed in another, as long as both countries are within the EU. The origins of this are as much ideological as legal, but they are there.\"
DavidHM.
Exactly!
I am sure that there are practices certain manufacturers adopt that, despite the block exemption, are in direct contravention to Articles 81 & 82. Thereby if investigated and the case proven they would be liable for fines up to the value of 10% of their turnover.
VW group have already been found wanting, fined quite considerable sum IIRC.
Whilst many companies, my own included, take the EU competition rules extremely seriously, it appears some companies (no names; but not motoring afaik) may regard such fines as incidental operating expenses.
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M.B, you appear to be under the impression that we are all free to make the deals that we like, and that we live in an unregulated environment where "freedom of contract" is the name of the game.
That has not been the case for some time, and is becoming increasingly less so as a result of EC regulation and competition law.
I stand by what i have said in relation to any supposed conspiracy on the part of the franchised dealers. However, I would not argue that a non-franchised dealer should not be completely free to deal with trade-ins absolutely as he/she sees fit.
I think this is all about to change anyway as the result of changes in "block exemptions" etc. It will be interesting to see how this affects the market, and what it does to the value of second hand imported cars.
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Apologies for not knowing the answer to this, but if an unofficial import car is virtually identical to a standard car, then why is the import less desireable when it comes to selling it?
The only reason that I can see is because the franchises offer you less for one, then people who are concerned about the money they will get back in a few years time, will find it less desireable. Kind of self perpetuating I suppose.
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why is the import less desireable when it comes to selling it? >>
Of course dealers will try as best as they can lawfully to dissuade you from buying direct. Human nature.
If you hanker for certain makes of car, the manufacturer and dealer will try to preserve the image of that brand. That means the total cost of ownership (whether imported or bought from the dealer) must take account of your likely final disposal valuation. But most punters do not think of final values when they buy a car. Human nature.
Because Joe Public does not like to think he has been ripped off by a clever Richard who saved £5000 on his import but still wants a "full valuation" for his car at trade-in or private sale time. In real life, the two cars may be identical but the imported one is perceived as being "cheap" and hence daserving less money 2nd hand. It boils down to the fact that no one waants to see clever Richard making a good buck out of importing. The dealer and/or 2nd buyer want a cut of the initial import saving that Richard made. Human nature.
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We seem to have done this to death but the point I think I and others were trying to make is that in a free market competition would put the cost of two (near) identical items as the same.
The only reason there is a differential is that VAG dealers are seeking to distort the market and that is illegal. Human nature perhaps but illegal nonetheless.
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Said it before and I'll say it again - the UK retail car market is not a 'free market', its riddled with anti-competitive practises that have developed because of our relative geographical isolation and the fact that we need RHD cars. This is not a subjective opinion, various published reports from the EU, the UK Government, the Consumers' Association etc. have confirmed this as a fact.
UK retailers are scared witless by the prospect of 'block exemption' going - as well they should be, a lot will go out of business...
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I have heard stories of {German brand} main agents staff buying imports with their own money, running them for a short time then selling them on the franchise forecourt as ex demonstrators for UK money.
Quite simply the only difference between a UK car and "import" is the warranty period when talking of models built in the factory specifically for UK. {Another German brand} continue to screw around with the rules by not allowing Dutch dealers to spec the UK radio's on RHD cars. {German brand} in Denmark put so much pressure on their dealers not to quote UK customers, {German brand} in Sweden sacked several of the dealers last year for selling bulk orders to a large UK importer, the story goes on.
At the end of the day, you have a used car to sell. Pitch the price right and sell it in Autotrader. You will get a figure somewhere between the abismal trade in offer and the forecourt price dealers quote. My guess is somewhere around £2k under the main dealer price, you'll get plenty of calls and still have saved money at the end of the day.
Even if you saved £5k on the purchase and lost all of that on the resale, your total cost of ownership for that car has been less.
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To be fair, Colin, its not just the German brands. They are all at it. IIRC, the biggest difference in the recent EU table of car prices was a popular model from a Japanese manufacturer - it was something like 60% cheaper in Holland and Belgium!
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Outrageous and illegal. VAG were raided by the EU some years ago and subjected to a huge fine but obviously this is not enough to deter them or others.
In the motorcycle market imports forced the UK price down to Euro levels but obviously you don't have the whole right/left hand issue there.
Honda (motorcycles) outrageously intimidated a UK importer in to stopping importing Hondas but it did them no good as their customers rebelled, the other motorcycle manufacturers cut prices and Honda had to get back in to line.
Rip off Britain...
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Ha ha, yes. A very good friend of mine earns his full-time living by importing motorcycles from abroad - mostly Italy I think.
He doesn't live too far from the Triumph factory in Leicestershire, but he can import Triumphs from Canada and still undercut the local dealer. Crazy, or what! He also brings in the various special tools used in motorcycle repairs and they are much cheaper too - he seems to make good money out of it.
Its like the 10 DVD's I ordered for last Christmas - ordered them from a company in Australia and even with air mail they were cheaper than in the local Woolies! Incredible.
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As you say crazy. Triumph, made in UK, shipped to Canada, he buys it, ships to back, still cheaper than the Triumph dealer.
Economics of the madhouse.
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tell the thieving dealer where to go and go back to the car supermarket with your px.sorted!a friend of mine is in the market for a new coupe at tho mo.he observed that these dealers seem to have the attitude that they are doing you a favour.cant say i dissagree!dont think im ever going to buy from my local mazda garage after "the you cant afford it" type looks i got when i baught my mx5.nackers to em say.
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Wow... so many comments. However I feel the point I was trying to make may have been missed in some cases.
M.B- Just to clarify the issue is not about having my cake and eating it - if you want to see an example of this please look at car manufacturers/dealers
The issue is about market distortion and a policy that has an anti-competitive effect. Two cars are made on the same production line etc - one (at trade in time) is substantially less than the other becuase it was imported - why? Objectively there is no justification. The effect of the policy is to discourage imports and free trade within the EU.
I actually think this policy is deliberate and anti-competive. As one of the other contributor's stated franchises/manufacturers/dealers are in a far more powerful position than joe public. I do think that the whole issue requires furhter investigation by the appropriate authorities as I think it's time for car manufacturer's to be reminded that competition laws do exist. I might have to take the lead and buy a dictaphone.
As for buying a Mazda-apparently sales have bombed in the US and they can be picked up v cheap (It's expected that the same will happen here.) Maybe I'll look at the Nissan Z Car/Boxster instead of the TT. I think I've accepted that I'l have to sell it privately for £10K. Anyone interested...:)
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Not much help I know but...why get a TT when for less cash you could get a better car in the Mazda RX8? :-)
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Isnt it great to see that UK Spec Golf is now made in the UK. I always assumed they were all made in Germany (or spain or poland etc etc.) along with the European cars :-)
If he had haggled on the Spec of the car then it might be reasonable , but when identical cars come out the same factory its just taking the wee wee.
Personally I blame the English Channel.
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