Buying a new car using game theory

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Mon 16 Jan 2012 17:15
Buying a new car using game theory - JohnCC

I wonder if this would actually work in the UK?

http://www.youtube.com/watch?v=LNrLfylgHE0

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Mon 16 Jan 2012 17:21
Buying a new car using game theory - unthrottled

It falls apart on the realisation that no two packages are going to be exactly the same. This trick has been used by retailers ever since the internet made price comparisons effortless. The solution was to make their deal, quite literally, incomparable.

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Mon 16 Jan 2012 17:24
Buying a new car using game theory - RT

It falls apart on the realisation that no two packages are going to be exactly the same. This trick has been used by retailers ever since the internet made price comparisons effortless. The solution was to make their deal, quite literally, incomparable.

Comet and Argos were doing just that long before the internet - electrical/electronic items were unique either by adding a low-cost feature or removing a feature from the otherwise "normal" specification,

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Mon 16 Jan 2012 17:31
Buying a new car using game theory - unthrottled

Of cause it is! Otherwise they'd get locked into an ultimately fatal race to the bottom.

It never ceases to amaze me that the more ignorant a person is regarding a product, the better a deal he thinks he can get.

The best deal is obtained by simply avoiding new cars.

Edited by unthrottled on 16/01/2012 at 17:31

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Mon 16 Jan 2012 17:48
Buying a new car using game theory - Bobbin Threadbare

You can't ever get a 'like-for-like'. If you're buying used cars, at minimum the mileage will be different between the same type of cars. If you're buying new, you'd have to ensure you were ringing dealerships that did compete. E.g there are lots of Evans Halshaw Ford dealers in a 40 mile radius of where I live. They're not franchised so they're not really competing with each other, except the salesmen's commission I suppose.

The other major fall down is that it has to be the dullest way to buy a car ever. I enjoy the process of going to look. Also you would sort of spoil the game if you went to look and turned the 'winning' vehicle down.

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Mon 16 Jan 2012 18:47
Buying a new car using game theory - tony g
It's nothing more than a Dutch auction,

New car dealers have been dealing with this for years.

When I worked in main dealers ,the manufacturers discouraged us from getting involved.
They prevented us from responding to this type of enquiry by operating a dealer standards bonus scheme. This would add about 3% to the profitability of a dealers car sales.
If we simply gave a price over the phone we stood to loose the bonus.

They discovered if we did this by making recorded phone calls to the branches .

The principle of buying like this excludes the issue of a part exchange .

It's often thought that new car dealers make vast profits ,they don't ,broadly the gross profit as a percentage of the retail price is 14%.The dealer needs to retain some of that to stay in business.

Tony g
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Mon 16 Jan 2012 19:02
Buying a new car using game theory - RT
It's often thought that new car dealers make vast profits ,they don't ,broadly the gross profit as a percentage of the retail price is 14%.The dealer needs to retain some of that to stay in business. Tony g

14% plus volume bonus plus target bonus plus fleet bonus plus finance promotion, etc, etc.

Of course the dealer needs to retain some gross margin to cover general costs and return on investment.

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Mon 16 Jan 2012 19:55
Buying a new car using game theory - tony g
Sorry rt ,theirs no plus plus about it.
The base profit is 14% plus 3% for a standards bonus,the standards bonus includes target achievement ,showroom standard ,mystery shopping standard .

Finance commission used to be a profitable part of the dealers business ,not anymore. It's not possible to sell finance on a monthly payment basis .
All buyers who want finance ,won't accept apr in excess of 10% .they organise their own .
Another profitable part of the business gone.

The best example I can give is already in the post( dodgy car dealers ,by rashid.)

Arnold Clarke ,the fourth largest car dealer in the country had a turnover of £2.27 billion pounds in 2010 ,their profit before tax was £52 million ,less than 2% profit.That also includes parts and servicing.

Not such a rosy picture .

Tony g
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Tue 17 Jan 2012 15:10
Buying a new car using game theory - bonzo dog

I wonder if this would actually work in the UK?

Of course it would ..... & does.

I have bought a vehicle in a similar way, but using a fax - required vehicle details sent, asking for best price to be faxed back.

Where it falls down in many cases is that the canny dealer says " No, I'm not prepared to quote you a discounted price over the phone. But if you come to my dealership at 5 pm with a cheque made payable to my dealership, I'll guarantee to knock £50 off the best price you have obtained"

And it works - the greed of the GBP is greater than its determination to play the game & stop at the best price it can get over the phone

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Tue 17 Jan 2012 15:38
Buying a new car using game theory - unthrottled

But if you come to my dealership at 5 pm with a cheque made payable to my dealership, I'll guarantee to knock £50 off the best price you have obtained"

He can't possibly make that promise. Another dealer might be prepared (in some circumstances) to sell a car at a loss to get rid of it. Besides, you would need a written quote from another dealer to take with you-and you won't get that over the phone.

If you're fussing over £500 or so-you can't afford a new car. It's going to lose circa half its valve (or more) in three years anyway. I don't get the new car fad. Warren Buffet drives an old car...

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Tue 17 Jan 2012 18:15
Buying a new car using game theory - oldroverboy
And i am pl

Edited by OldRoverboy on 17/01/2012 at 18:16

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Tue 17 Jan 2012 22:10
Buying a new car using game theory - balleballe

It seems to make more sense buying a new car nowadays if one is looking for a diesel

I would never buy a new petrol car though. The newest i'm prepared to go it at least 1 year old with around 20k on the clock and around 30% off the original price as a result

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