What mark up do dealers make on MH's (3 Viewers)

[davidathomas42]

So ill be done with mine around mid April and started having a feel around what dealers would buy it for cash.

I know its the worst time. April/May will be start of the season and probably good timing to adjust prices north.

I paid £68,500 and have dropped another £5k+ in to the van in Victron and Lithium upgrades along with a few extra bits.
Comparable models for sale are only a few. But £65k £72k and one with delivery miles at £79k without the upgrades fitted this is.

3 Dealers have made offers of £47k. £50k & £54k!

The one at £47k tried telling me its only with £65k retail.... Ok so thats up to £18k mark up. Bearing in mind its a 21 plate with van varranty still and Bailey warranty for a few bits still. Last hab check done in Nov 23. Not much to warrant really so minimal risk.

Do they really expect that much mark up. Or is it just time of year not wanting stuff unless its silly cheap?

 

[Roger S]

The dealer will pay 20% vat on the difference between what they paid for the van and what they sold it at.

 

[bobnick]

I have a simple philosophy in that if the offered price is acceptable, sell.
If it isn't acceptable, don't sell.

Thinking about it when we re ready to sell i will contact Simon, if he offers a figure that i'm happy with (i'm realistic) then it makes sense to give it to him. No tyre kickers.

 

[ManTheVan]

If I was selling Via Simon Select I would take him a coffee

Nah, it would be cold by the time he got it. He has a perfectly good coffee machine in the showroom (and a beautiful aquarium to look at while you drink it and contemplate your next purchase).

 

[Coolcats]

Nah, it would be cold by the time he got it. He has a perfectly good coffee machine in the showroom (and a beautiful aquarium to look at while you drink it and contemplate your next purchase).

sounds almost like a relaxing retreat

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[The Wino]

I think it seems odd buying and selling so soon through dealers and not expecting a pretty big loss. The extras might add a bit to the value but nowhere near what they cost. If I bought a car with a similar price spent a few grand on extras and was offered the trade in you quoted I wouldn't be at all surprised.
On your car dealing what percentage of the value of the ones you sell is the £500 to £1000 you quoted?

 

[Jim]

I've never really got my head around what this "profit" is for if you have paid all the expenses + your wages?

You don't know what profit is for?

So they've sold all their vans this year, paid themselves. Made no profit. So how do they buy another van to sell, Or advertise their business, expand their business premises, or even pay wages on the 30th Jan.

 

[WESTY66]

But did you get a coffee

Countless coffees

 

[BikerGraham]

You don't know what profit is for?

So they've sold all their vans this year, paid themselves. Made no profit. So how do they buy another van to sell, Or advertise their business, expand their business premises, or even pay wages on the 30th Jan.

Exactly

And they also need some “buffer” for quiet times when business is slow or say when the government shuts businesses down for weeks on end like during Covid.
People forget that for those who did use furlough, it only covered some of the companies costs, not all.

 

[Jim]

Exactly

And they also need some “buffer” for quiet times when business is slow or say when the government shuts businesses down for weeks on end like during Covid.
People forget that for those who did use furlough, it only covered some of the companies costs, not all.

And after they have paid the taxman a full quarter of their profit, if there is any left, they can pay a dividend to their faithful shareholders who invested in the company in the first place.

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[BikerGraham]

Strange how profit in this

And after they have paid the taxman a full quarter of their profit, if there is any left, they can pay a dividend to their faithful shareholders who invested in the company in the first place.

country is considered a dirty word but in other countries it is a sign of success and respected.
Strange old world

 

[Tombola]

If your prices have never been queried as too high. Then you are too cheap.

 

[PaulW2]

Obviously they will offer as little as possible and sell it for as much as possible.

'Fairness' doesn't really come into it, does it? Here is Adam Smith on the subject:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

Is there a gap in the market for them to have a profitable business between the buying/selling margins they can achieve? That depends.

On their costs - premises, salaries, parts, utilities, advertising.

And on the market dynamics. How much of their capital is tied up in stock for how long?

If they have a hundred vans bought at an average of £40k and therefore (say) £ 4m tied up in stock, how rapidly do they sell them?

If I only sell only one van out of the hundred in a year, say bought for £ 40k and sold for £ 60k, I have 'made' £ 20k. 0.5% on the money I tied up in stock. Before meeting any expenses. Not good business. If I sell all the vans in the year it's £2m. I can probably then meet all my bills. But if the market forces me to sell for a markup of £ 10k maybe I can't. Or maybe I can at £ 10k but not at £ 5k.

These guys seem to go out of business from time to time, so I suspect it's not all plain sailing.

And if there are people with different business models, that don't pay for the van outright but sell it on behalf of the owner on commission, and therefore don't have capital tied up, they can compete differently.

Assuming that vans in the market sell to the final 'consumer', like for like, at similar prices, such dealers will be able to take a smaller cut and give the seller more. All of us would, in theory, then be better off with that sort of deal.

Unless we need the money sooner in order to buy another van, or unless we have our eye on one at a forecourt where we will be offered a part exchange. Opportunity cost. Maybe I'll accept less for an easier transition.

Or maybe I can sell it out of hand. Run the gauntlet with tyre kickers, people wanting test drives, giving me the runaround. Then I can get the whole of a smaller selling price (as I can't offer warranties, after sales service and the like).

It just depends.

 

[Tombola]

Obviously they will offer as little as possible and sell it for as much as possible.

'Fairness' doesn't really come into it, does it? Here is Adam Smith on the subject:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

Is there a gap in the market for them to have a profitable business between the buying/selling margins they can achieve? That depends.

On their costs - premises, salaries, parts, utilities, advertising.

And on the market dynamics. How much of their capital is tied up in stock for how long?

If they have a hundred vans bought at an average of £40k and therefore (say) £ 4m tied up in stock, how rapidly do they sell them?

If I only sell only one van out of the hundred in a year, say bought for £ 40k and sold for £ 60k, I have 'made' £ 20k. 0.5% on the money I tied up in stock. Before meeting any expenses. Not good business. If I sell all the vans in the year it's £2m. I can probably then meet all my bills. But if the market forces me to sell for a markup of £ 10k maybe I can't. Or maybe I can at £ 10k but not at £ 5k.

These guys seem to go out of business from time to time, so I suspect it's not all plain sailing.

And if there are people with different business models, that don't pay for the van outright but sell it on behalf of the owner on commission, and therefore don't have capital tied up, they can compete differently.

Assuming that vans in the market sell to the final 'consumer', like for like, at similar prices, such dealers will be able to take a smaller cut and give the seller more. All of us would, in theory, then be better off with that sort of deal.

Unless we need the money sooner in order to buy another van, or unless we have our eye on one at a forecourt where we will be offered a part exchange. Opportunity cost. Maybe I'll accept less for an easier transition.

Or maybe I can sell it out of hand. Run the gauntlet with tyre kickers, people wanting test drives, giving me the runaround. Then I can get the whole of a smaller selling price (as I can't offer warranties, after sales service and the like).

It just depends.

And depreciation of the 2 mill worth of stock if the market slows.

Im guessing there is a glasses guide book (online nowadays) that trade use as a general rule of thumb too ? Ther3 are for caravans and statics etc, but mhs have "a van" with engine attached too which needs consideration. Not an easy one id say

 

[davidathomas42]

You said it was a 2021 model.
Have you had it from new?
This suggests You have only for 4 months.
There is always going to be a significant gap between trade price and retail price.
If you try to sell it privately, you need to be prepared to deal with tyre kickers and potential fraudsters.
Is it owned outright or is there finance owing one it?
Your price will need to be significantly below the price of dealers, as the buyers have less consumer rights and no comeback on you.
You are unable to offer finance, so this limits your market, and then you have the issue of settling outstanding finance (if any) and the practical issues around the actual transaction, where trust needs to be gained on both sides as there are daily limits on sending large amounts of money and risk around the actual payment.

The dealer may have a buyer lined up, or they may have to sit on it as stocks for month ( and pay for finance on it's in the mean time)

All things to consider

I bought it in Nov last year as an interim place to live when my house sold. I have a new job starting March so needed to be in Gatwick for 4-6 weeks training. It’s perfect for this.

No finance on it. I paid cash.

As it’s under warranty still I hope that it will give some buyer confidence.

But yes it’s a lot of money for a sale. I’ve only ever sold cars up to £30k value for cash. This is a big step past.

Hoping the fact I’m an airline captain for a major operator will give people confidence I’m not some Itinerant looking to rob them.

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[davidathomas42]

On your car dealing what percentage of the value of the ones you sell is the £500 to £1000 you quoted?

Cheapest cars I buy are around £1500 and dearest £5000.

A few mates are small dealers and now and then I pick up a PX they don’t want for stock.

If I see a decent car parked outside a house with a sale sign in it I always pull over and look if I can polish some money into it.

It’s just a hobby.

 

[gus-lopez]

You don't know what profit is for?

So they've sold all their vans this year, paid themselves. Made no profit. So how do they buy another van to sell, Or advertise their business, expand their business premises, or even pay wages on the 30th Jan.

Same as I did ,borrow from the bank.

And they also need some “buffer” for quiet times when business is slow or say when the government shuts businesses down for weeks on end like during Covid.

Why? Millions never got anything whether employed or self employed.

, they can pay a dividend to their faithful shareholders who invested in the company in the first place.

Now the truth is coming out.
Unearned income for people who don't work.

If your prices have never been queried as too high. Then you are too cheap.

That was always me then. I've even had Belgian and Germans
telling me I needed to charge more?

 

[The Wino]

Cheapest cars I buy are around £1500 and dearest £5000.

A few mates are small dealers and now and then I pick up a PX they don’t want for stock.

If I see a decent car parked outside a house with a sale sign in it I always pull over and look if I can polish some money into it.

It’s just a hobby.

On the average of the two figures you're making about a 25% mark up with no overheads other than the polish and presumably no tax to pay or overheads or warranty. Maybe your the one that's more of a rip off than the dealers!

 

[SpeedyDux]

And depreciation of the 2 mill worth of stock if the market slows.

Im guessing there is a glasses guide book (online nowadays) that trade use as a general rule of thumb too ? Ther3 are for caravans and statics etc, but mhs have "a van" with engine attached too which needs consideration. Not an easy one id say

I believe there is a Glass guide for MHs although consumers don't get access. Trade only. That is something that the Competition and Markets Authority watchdog ought to look at. I was under the impression that a dealer margin of £15k was quite normal.

It is so juicy compared to the used car trade that during the current boom I think a number of shady start-ups have joined this business. I could say more about that.

As for allowing a dealer to sell on your behalf and receive the money, there are so many legal pitfalls I would never do that. Much less risky to sell privately.

 

[nicholsong]

Cheapest cars I buy are around £1500 and dearest £5000.

A few mates are small dealers and now and then I pick up a PX they don’t want for stock.

If I see a decent car parked outside a house with a sale sign in it I always pull over and look if I can polish some money into it.

It’s just a hobby.

"...and what is your hobby?"

"I am a used car salesman"

How embarrassing!

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[Coolcats]

Yes but it is all the other things that you don't pay when running a business,or can off set against tax.


I've never really got my head around what this "profit" is for if you have paid all the expenses + your wages?

Profit is sanity
Turnover is Vanity

Its a simple truth but if your in business its a quick one to learn

 

[Jim]

Same as I did ,borrow from the bank.

Against what?

 

[Jim]

Profit is sanity
Turnover is Vanity

Its a simple truth but if your in business its a quick one to learn

Very true. Some people clearly have no idea. Profit, who needs that, just go an borrow some more money.

 

[Roger S]

The main dealer that we bought our van from said that spend £1800 a month advertising with Auto trader

My thoughts are £10-£15 k is a good margin. You could argue the more expensive the van there is less likely something major will go wrong warranty wise so you don't need as much out of the sale then a 15 year old van

 

[Spriddler]

Profit is sanity
Turnover is Vanity

Its a simple truth but if your in business its a quick one to learn

For a couple of years I worked for the DTI (until I nearly lost the will to live) as an advisor to SME's. A 3 man ornamental ironwork firm had won a contract to make 150 wine racks for an off-licence chain and came to us thrilled to bits asking for advice on obtaining funding. I had a look at his fag packet costing for the quote and rather upset him when I advised him that he'd be better off spending his time at the village green under a tree with a pint watching cricket.

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[davidathomas42]

On the average of the two figures you're making about a 25% mark up with no overheads other than the polish and presumably no tax to pay or overheads or warranty. Maybe your the one that's more of a rip off than the dealers!

The thing is I tend to make more on the cheaper cars than the good one.

If I buy a really nice fiesta for £4000 and spend a couple hundred on advertising. Tax. Fuel. Polish and incidentals (maybe a tyre or two) I would advertise for £4995 and maybe draw £4700. Not a massive return.

Then I might end up with an old Focus for £700 and polish it to death. Repair a mirror glass or the like for £20 and I can see it up at £1995 to draw £1700.

What I find is when something is newer and high value with no maintaince issues there is nothing to help polish money into it. The value is clearly seen.

So that been said. A motorhome still under manufacture warranty and converter warranty with next to no miles or use. Just had its Hab check etc doesn’t warrant a £10-15k profit for finding a buyer and giving it a wash.

 

[davidathomas42]

"...and what is your hobby?"

"I am a used car salesman"

How embarrassing!

Lol. Well I have many hobbies.

But I’m a car guy. I’d like to own one of everything before I die. I don’t have the money to keep them all or a big enough garage. So I buy a lot of cars and run them and sell at the same time ready to get the next one.
Yes I spend a lot of time browsing eBay

In 2022 I had 3 different Mercs. an MX5. A Ford Pick up. An electric car and my Harley.

 

[Coolcats]

For a couple of years I worked for the DTI (until I nearly lost the will to live) as an advisor to SME's. A 3 man ornamental ironwork firm had won a contract to make 150 wine racks for an off-licence chain and came to us thrilled to bits asking for advice on obtaining funding. I had a look at his fag packet costing for the quote and rather upset him when I advised him that he'd be better off spending his time at the village green under a tree with a pint watching cricket.

But you did the right thing and sometimes we all need financial guidance, we can get a bit blind and over enthusiastic to commercial realities. Even a handyman should look at his costs I am amazed at how many people do not value their time.

I say handyman as some people will do this to try their hand as they are unemployed but £30 an hour minimum of two hours wouldn't be a bad start, many do not consider factoring in insurance, travel, tools consumables and other costs.

 

[BikerGraham]

Why? Millions never got anything whether employed or self employed

If the company hadn’t make previous profits and build it up as spare cashflow in the business they would have gone out of business and had to make everyone redundant.

 

[BikerGraham]

The thing is I tend to make more on the cheaper cars than the good one.

If I buy a really nice fiesta for £4000 and spend a couple hundred on advertising. Tax. Fuel. Polish and incidentals (maybe a tyre or two) I would advertise for £4995 and maybe draw £4700. Not a massive return.

Then I might end up with an old Focus for £700 and polish it to death. Repair a mirror glass or the like for £20 and I can see it up at £1995 to draw £1700.

What I find is when something is newer and high value with no maintaince issues there is nothing to help polish money into it. The value is clearly seen.

So that been said. A motorhome still under manufacture warranty and converter warranty with next to no miles or use. Just had its Hab check etc doesn’t warrant a £10-15k profit for finding a buyer and giving it a wash.

You also need to factor in the fact that generally, a motorhome dealer does not sell as many units per year as a car dealer.

So needs to have more added value in each deal to cover their overheads and make a modest profit for future growth in comparison to a car dealer.

The business model is different.

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[Coolcats]

You also need to factor in the fact that generally, a motorhome dealer does not sell as many units per year as a car dealer.

So needs to have more added value in each deal to cover their overheads and make a modest profit for future growth in comparison to a car dealer.

The business model is different.

Are you trying to make us feel sorry for the dealers?