How Much Will a Dealership Come Down On Price On A New Car Uk

How Much Will A Dealership Come Down On Price On A New Car Uk

Purchasing a brand new car is an exciting experience. Seeing that shiny new vehicle sitting in the dealership showroom stirs up feelings of desire and picturing yourself behind the wheel. However, that initial enthusiasm often fades once you see the high manufacturer’s recommended retail price (MRRP) on the windscreen.

At that point, your thoughts turn to negotiating with the dealer and getting them to knock off as much from the list price as possible. Haggling to pay below MRRP is expected on new car purchases in the UK market. This comprehensive guide provides

car buyers with expert advice on how much discount dealers realistically will offer, what factors influence their flexibility on price, smart negotiating tactics to use, and real world examples of exceptional deals buyers secured.

Key Factors That Determine a UK Dealer’s Ability to Discount New Cars

Several important factors come into play that will determine just how much leeway a car dealership has to reduce the price below MRRP on a new vehicle:

How Much Will A Dealership Come Down On Price On A New Car Uk
Key Factors That Determine a UK Dealer’s Ability to Discount New Cars

Current Demand and Popularity of the Car Model

The level of consumer demand for a particular car model has a major influence on discount flexibility. Vehicles that are very popular and in high demand among car buyers allow dealers to hold pricing firm close to MRRP. When lots of people are clamoring to get their hands on the latest hot model,

dealers have no motivation to offer significant cost reductions. However, car models that are less popular or lagging in sales typically have much more wiggle room in the pricing. Dealers are eager to move slower selling vehicles off the lot, giving savvy negotiators an opportunity to bargain for bigger price concessions.

If you have your eye on a new car model that seems a bit niche or one that doesn’t have buzz around it like the top sellers, you will likely have a much easier time talking down the price.

Availability of Inventory and Supply Levels

In addition to broad demand for a car model, the specific inventory situation at the dealership also determines their ability to offer discounts. When a dealership has limited quantities of a certain new vehicle in stock, they have little incentive to come down much on the pricing if demand is high.

Scarcity limits their flexibility. However, when they have an abundant supply of a particular make and model on the lot, it puts the consumer in a position of leverage during price negotiations. The dealer will be much more motivated to make a deal and will likely approve bigger reductions to clear out excess inventory.

As a buyer, you can use this to your advantage by targeting dealers that show a high quantity of the desired vehicle in stock online or in person. Use the leverage of their oversupply to negotiate the biggest savings.

Availability Of Inventory And Supply Levels
Availability of Inventory and Supply Levels

Incentives, Rebates and Manufacturer Promotions

Car manufacturers and dealerships periodically offer special incentives, rebates, and promotional financing offers to help boost lagging sales during slow periods or to clear out older inventory. Examples include 0% APR financing for a certain number of months, cashback offers,

and special discount pricing on models that need to be moved off the lot. The presence of these incentives gives the dealer much more flexibility to pass along significant savings in the form of bigger price reductions without eating into their profit margins.

Savvy buyers can take advantage of these seasonal promotions to maximize their negotiating leverage. Doing research online and timing your purchase around these incentive deals can result in huge savings from the dealer.

Profit Margins on the Specific Car Model

The total profit margin that the dealer has built into the pricing from the wholesale cost they paid the manufacturer to the full MRRP sticker price also determines their ability to discount. Models with very high profit margins give the dealer more room to take a hit on their profits while still making money on the sale.

Vehicles with slimmer margins limit how far they can come down before taking a loss. As a buyer, get insight into profit margins by researching the dealer invoice price for the specific model you want compared to MRRP. This shows you how much markup exists, which provides perspective on where you have negotiating potential based on their profits.

Profit Margins On The Specific Car Model
Profit Margins on the Specific Car Model

Goals and Incentives of Individual Salespeople

The salesperson you end up interacting with during the negotiating process brings their own specific goals, motivations, and incentives into the mix. Salespeople who still need to hit their monthly quotas will fight harder on pricing and have less flexibility.

However, timing your purchase at the very end of the month or quarter is advantageous, as needing to hit volume goals makes salespeople desperate to make deals. They have extra motivation to close sales, so can present you with bigger discounts to make the numbers.

End of annual sales also see heightened flexibility for discounts as annual targets approach. Beyond quotas, some salespeople simply get bonuses or other rewards from managers for closing deals. Coming in armed with competitive quotes and being prepared to walk away pushes salespeople to pull out all the stops to earn your business.

Typical Discount Ranges Dealers Offer on New Cars in the UK Market

While every vehicle purchase negotiation is unique based on the above factors, some general guidelines on typical new car discount ranges in the UK market are:

  • Best-selling models in high demand: 2-5% discounts off MRRP
  • Well-equipped premium models: 3-8% pricing reductions
  • Average selling mid-range vehicles: 5-10% off list price
  • Slow selling vehicles: 10-15% markdowns
  • Run-out models and previous model years: 15-30%+ discounts

For example, on a £30,000 MRRP new car, a 5% discount would save you £1,500, while a 15% pricing reduction would equal £4,500 in savings. Luxury vehicles usually have the highest discount rates, in the 10-20% range. Even on more coveted top sellers, savvy negotiators can often get at least 5% knocked off.

Negotiation Tactics and Strategies to Maximize Your Savings

While knowing the potential discount rates dealers may offer and the influencing factors are helpful, you also need to enter negotiations armed with proven tactics to push the pricing down. Here are some of the most effective ones to employ:

  • Get Pre-Approved Financing at Lower Rates – Dealers make a lot of their profit on financing markups. Having your own pre-arranged financing already secured gives you a major upper hand.
  • Mention Competing Quotes From Other Dealers – Leverage the power of competition and let each dealer know you are shopping quotes. This pressures them to give their lowest price to earn your business.
  • Negotiate Only After Test Driving the Vehicle – Test driving gets the dealer invested in closing the sale. Wait until after the drive to begin price discussions.
  • Inspect the Vehicle Carefully and Point Out Any Flaws – Use any defects you find during inspection to justify a lower price to offset needing to fix the flaws.
  • Reference Invoice Pricing – Research and reference the dealer invoice price to demonstrate you know their actual costs and profit margin. This justifies a bigger discount.
  • Make the First Offer Below Your Ideal Price – An initial low offer allows room for the dealer to counter and for you to compromise up to your target savings goal.
  • Be Ready to Walk Out – Dealers will often call back with a better offer if you begin leaving after reaching an impasse. Communicate you are willing to purchase elsewhere unless they meet expectations.

Following an informed, disciplined approach while employing these tactics will maximize success in getting the largest discounts.

Other Costs and Fees Beyond Just the Vehicle Price

When focused on negotiating the best deal on the vehicle price itself, it’s easy to overlook the other costs involved in a new car purchase. Remember to factor in:

  • Delivery charges to have the vehicle transported to you
  • Registration and documentation fees
  • Applicable taxes
  • Insurance premiums
  • Any options, extended warranty or service plans selected
  • Finance charges if not paying in full upfront

Some of these fees like taxes and registration are fixed at set rates, but others like financing rates and warranty costs may have wiggle room for negotiations as well. Make sure you evaluate the total out the door cost when budgeting for your purchase.

Real World Examples of Exceptional UK New Car Price Negotiation Deals

To give you a sense of the incredible discounts that are possible using the right combination of negotiation tactics and timing, here are two real world examples:

  • A 2018 Vauxhall Astra Elite list priced at £27,000 was purchased for an incredible £22,000 after negotiations. By leveraging 0% financing offers and end of model year clearance, the buyer secured an £5,000 or 19% discount off MRRP.
  • A previous model year Land Rover Discovery SE listed for £47,000 was bought for £38,000. By referencing the high dealer invoice cost, assessing the market value, and shopping multiple dealers on the last day of the month, the buyer negotiated nearly £9,000 (or 19%) off.

FAQs

How much below MSRP do dealerships discount new cars in the UK?

Discounts around 10-15% off MSRP are common for most models. Some in-demand vehicles see less discounting.

Does the time of year impact dealership new car pricing?

Yes, larger discounts tend to be offered during slower sales months and to clear outgoing model year inventory.

What strategies can get me the best price from a UK dealership?

Do research online, get quotes from multiple retailers, negotiate politely using competitions’ prices, and be ready to walk away.

Can dealerships go even lower than their advertised internet price?

There may be some additional wiggle room, but typically online specials reflect rock-bottom pricing.

What extras should I avoid when negotiating with dealers?

Don’t get swayed into paying for unneeded add-ons like extended warranties that don’t boost resale value.

Should I focus on percentage off MSRP or total out the door price?

The final bottom line price after taxes and fees is what really matters rather than percentage discounts.

What’s the worst time to negotiate pricing with dealerships?

Trying to get maximum discounts on in-demand models right when they hit the market is difficult.

Do dealers really give their best prices to those who pay cash?

Dealers make a profit on financing, so you may have more leverage paying with cash.

How can I get a dealership’s best price without haggling?

Online buying services like Carwow provide upfront discounted pricing from local dealers competing for your business.

Does the UK have laws regulating dealership pricing practices?

No, pricing is mainly driven by market competition rather than regulations.

conclusion

Getting the best possible price when purchasing a new car requires arming yourself with research, timing your purchase right, employing negotiation tactics, and ultimately being ready to walk away if unreasonable. While dealerships have some flexibility to come down from the MSRP,

don’t expect dramatic discounts on hot models. Realistically, aim for 10-15% below MSRP on most vehicles and be prepared to compromise. Focus your negotiations on total out the door pricing rather than percent off. With preparation, persistence, and competitive shopping,

you can likely save a reasonable amount off the sticker price. But ultimately, finding the car you want at a fair overall value should take priority over acing the negotiation and ending up with a model you don’t really want just because it was cheap.

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