Secret Diary of a Car Dealer… part 2

In this age of technology the ‘tinterweb gives a level of transparency that we simply didn’t have in the olden days.

All of a sudden the world’s your accountant:’I know what you paid for the car’ is a recurring theme, so let me explain how it usually goes.

I buy a car at an auction, and the price I’ve paid is published online for all to see. I don’t have a problem with that: to a certain extent my profit is in the risk and I was the one who put my paddle up and took that risk. I then go on to pay the buyers’ fees, the transport, carry out a full service, any remedial mechanical and structural works, attend to any body and paintwork required, interior/trim repairs, MoT if appropriate and mint the sh1t out of it.

Now sometimes there’s very little work required and sometimes there is. We’re back to put your paddle up and take your risk – can you see where I’m going with this?

Oh, and don’t forget I then have my fixed operating overheads and advertising costs to cover, plus there’s VAT and Corporation Tax to pay.

So fast forward……the car’s ready for market and a customer comes along to view it, the inspection goes well and they’d like to make an offer. Cue ‘I know what you paid for the car’.

Now, I’m pretty patient and have no problem explaining what has gone into preparing the car for sale in terms of cost and time, followed by a brief explanation of the VAT scheme we use (payable on the gross profit) and politely pointing out that I wouldn’t mind not working for free. This normally does the trick and they can understand why my asking price is fair.

But there are a few in the trade who have a slightly different reply when the inevitable ‘I know what you paid for it’ crops up. ‘Well, you could have put your hand up at the auction’ etc – we take risks so you don’t have to, whether we buy at a public platform or privately, and hope to make a modest living out of it.

Would you walk into a greengrocer’s and question the margins?….probably not.