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whats the mark up on a 2nd hand motorhome


terry1956

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hi, out of interest, what is the mark up on a 2nd hand motorhome from a dealer. does anyone know. When I buy a car from a main dealer, they always say the same thing. we are only making a few hundred on this car as it was a special purchase, or some other rubbish. I would be interested in knowing what a dealer adds on. michael
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All top secret I am afraid. However, having worked undercover for certain spying networks ( Action Reference Suspicious Escalation of Margin or A.R.S.E.M for short) I can confirm that it varies depending upon the gullibility of the customer.

 

I reckon the bottom end mark up is around 30% top end nearer 40%.

 

Just PX your M/H and go and have a look on the forecourt a couple of weeks later.

 

H B-)

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A dealer I know charges about £2,000 on a commission sale, i.e. the sale of a customer's MH placed with him which he doesn't have to pay for before it's sold. Out of this he covers the costs of cleaning and preparation for sale and providing a warranty. This is on a MH priced at about £25,000 and I suppose his commission might vary a bit with the price.

 

If you sell your motorhome to a dealer for cash he will of course pay you considerably less than £2,000 below the forecourt price.

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hi, I did px my motorhome last week. OK I had only used it for one trip to Europe for two weeks. I was surprised when their offer was the same I had paid for it from a private sale on ebay. I have know idea as yet what price they have placed on it or if they have just sold it on within the industry. I hope they don't add 30 or 40% on.I don't and never will use brokers to sale or indeed to buy anything. why pay someone to do what you can do yourself, and if you cant or don't want to do it get a mate to deal with it. as a buyer I don't wish to talk to a 3rd party, I want to see the seller and talk to them. michael .
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terry1956 - 2015-03-04 3:28 PM

 

hi, I did px my motorhome last week.

 

I hope they don't add 30 or 40% on.

 

But what if they do?...you've agreed a price/deal, which presumably you were happy with? and it's now theirs to sell for as much as they can (..but I doubt very much it'll be for 30-40% more, if it is, they saw you coming! ;-))

 

There is always the possibility that it could sit on their forecourt for months gathering moss..or it could go bang the week after they sell it, leaving them with a load of warranty to cover.....

 

 

 

 

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terry1956 - 2015-03-04 4:22 PM

 

... don't need your sort of reply. ok.

 

Eh?...What "sort" of reply is that then?... :-S

 

...but you seem happy enough with replies that imply that you may have been ripped off by the dealer giving you 30-40% below what it was worth? :-S .....

 

 

 

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Hi ,I was offered cash of £27k for my Motorhome and the dealer was truthfull enough to say that he needed to make 5k which would put my Motorhome on his forecourt at £32k. I did not take up his offer as my circumstances changed soon after, but I thought that his offer was about right. Note that it was a cash offer Not a PX valuation against a new Motorhome in the 50k bracket.

Mike

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The classic distribution model of manufacturer, wholesaler and retaler involved splitting the retail price in a 50%, 20% and 30% share, but these are gross profits and, for example, the manufacturer would only make a net profit of under 10% on his turnover. That "classic" structure does not apply to lots of trades so, for example, jewllery and ironmongery retailers need a bigger margin because they carry a lot of expensive stock which moves slowly. The model doesnlt apply to grocery supermarkets either because they buy and sell directly and exploit their size to manipulate the market. The motor trade is unusual too because the manufacturers franchise retailers and seek to control things very tightly, in spit of resale price maintenance legislation.

 

So, for example, in the motorcycle trade a retailer's gross margin is under 10% on bikes which isn't enough to cover all their costs and they make the real money on bonuses for achieving sales targets. Likewise, in the wake of retail price maintenance laws banning the prescription of retail prices by manufacturers lots of manufacturers seek to control things using "margin support" bonuses, and if retailers try to sell cheaper than the manufacturer or main importer wants, they will be penalised by loss of bonus. Manufacturers also finance the stock by allowing, say three months credit before the product has to be paid for - and of course the retailer will try to sell hi stock well within this timescale to avoid having to pay up before they have got the money from the sale to their customer. So it's complicated.

 

I don't know the specific margins of the motorhome trade but it's very likely that equivalent margin support mechanisms work in a similar way. Retailers have to pay for business premises, business rates, staff wages and lots of other costs so they are likely to need a substantial effective overall margin, somthing like 30% or more because they have to carry expensive stocks which they may have to hold for some time.

 

But it's compllicated because of deadlines related to bonus periods and to financial deadlines, by which they might really need to get the money in. Hence the bargain offers - which sometimes might even wipe out their basic retail margin completely. But overall unless motorhome dealers have a margin of 30% or more they are unlikely to be able to make a net profit.

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terry1956 - 2015-03-04 5:51 PM

 

I asked a question out of interest. and if you have read my first post you would of seen my reason for asking. I don't care one bit how much he makes on the deal, but I would and am interested in the mark ups they look for.

 

When it comes to used motorhomes, a dealer will farly obviously make what he can - so he will buy as cheaply as possible and he won't buy if he doesn't thnk he can make a profit. Sometimes he will cross-subsidise on a deal (eg allow more for a part-ex than he can sell that vehicle on for, but he won't lose overall and the slower he thinks the turnover will be and the more time he has before any financial deadline he faces, the bigger margin he will try to secure. The margin (or mark up) he looks for when pricing a purchase or part exchange and how much he actually makes when he sells aren't the same thing, but they are related. Dealers will probably have two margins in mind, one which determines their opening offer (what they might get away with) and the other which determines the maximum he will pay/allow.

 

There probably isn't really a fixed margin which they aim for or secure.

 

Does that help?

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How long is a piece of string?

 

There is no fixed markup and as has already been said the onus is on the seller to get the best possible deal when selling or p/xing and that means pushing hard and giving no indication that you are ready to deal because once you do the shutters will come down fast on any extras.

 

Margins vary not only between dealers but groups like Marquis and Brownhills with allegedly lavish warranties and huge marketing and show budgets will need a higher level of profit per unit than your local family dealer to survive and prosper.

 

That said from between £4k to about £8k ought to cover it depending on overall value as the higher the value generally the higher the margin in pounds although the percentage may well remain about the same.

 

Tis a black art and the principle that you can always take less if pushed but never raise the price holds good.

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terry1956 - 2015-03-04 5:51 PM

 

I asked a question out of interest. and if you have read my first post you would of seen my reason for asking. I don't care one bit how much he makes on the deal, but I would and am interested in the mark ups they look for.

 

A curious question. He buys for as little as possible and sells for as much as possible. Nothing unusual about that. You say you don't care how much he makes but you do for you asked the question and to which there is never an answer.

 

Will

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Guest Had Enough
tugga - 2015-03-05 9:04 PM

 

We exchanged our Hymer with a dealer in exchange and we got 27k and we saw it up for sale for 35k. They had a 8k mark up on our motorhome.

 

But they probably didn't get £35K. Dealers put their top price on a used 'van as they know that clients like to haggle and get something off. If they sell it without another part-exchange they may well have been happy to take £32 or £33K. If there was another part-ex involved they can give an artificially high part-ex price as they've a large margin to play with.

 

But when the receipt is printed your old 'van would have a sale price of say £32K and a lower part-ex price than originally quoted. So the customer was told that he'd get say £20k for his own 'van, leaving £15K to pay. The bill of sale would have the sold 'van at £32K and the part-ex at £17K, still leaving £15K to pay but listing the part-ex 'van on his books at a sensible price and not the over-valued one he offered to tempt the buyer.

 

If he did a sale with no p/x and took as much as £33K he isn't making £6K profit as he has to pay VAT on the profit margin, so he'd have actually sold the 'van for £32K plus another £1K VAT on his profit, so on a sale of £33K of a 'van that cost him £27K he's made £5K, which, considering all his overheads and warrant risks is very reasonable.

 

 

 

 

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When we were looking at upsizng from our VW California we had a number of part-ex offers some of which were ridiculously low. A year or so ago we were interested in an new Adria twin SF whch while new had been on the dealers forecourt for maybe 6 months (Id been checking vans for a bit) and so had been reduced by £2500. However the part-ex offer wasnt acceptable, when I queried this the salesman shared some unwritten 'rule' that they needed to work on a margin of about 6K which limited the part-ex available. 6K would have been about 15% on the Twin in question. I accept the dealer has overheads to pay for and obviously if their turnover of vans is quite low then I can see how they have to maximise their mark up to remain viable. Certainly when I was looking at 6m Panel Van Conversions some dealers seemed to have some vans on their books for a long time. Re: the warranty risk wouldnt most warranties on 2nd hand motorhomes be insurance backed anyway - so maybe £400 out of his margin would go on that - but wouldnt that be the 'extent' of the risk to the dealer ?
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When I used to work in the used car market (non franchise) we used to mark up at least 30% on the forecourt but had plenty of room to haggle. Some people just come in and pay the screen price. So on some sales we did make 30%. But we were happy if we got 15-20%

 

We did have to pay for cleaning, repairs, give a warranty on the vehicle and had wages, rent and rates to pay.

 

But some cars we actually lost money on. Their is no straight answer as so many factors have to be considered.

 

I would say when ever you see a screen price on a MH and you have no PX their is always a minimum of between 7-10% discount to be taken off that price. Depending on how long they have had the stock.

 

 

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thanks for the feed back. but its a pity that one cant ask a question without some people trying to pick a fight. maybe that's an internet thing I don't know, but I bet they don't act in the same manner face to face.

I like to know things, that's the way my mind works. michael

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Guest Had Enough
terry1956 - 2015-03-06 8:38 AM

 

thanks for the feed back. but its a pity that one cant ask a question without some people trying to pick a fight. maybe that's an internet thing I don't know, but I bet they don't act in the same manner face to face.

I like to know things, that's the way my mind works. michael

 

I've come to this thread quite late but I've not seen anyone trying to pick a fight. The most pugnacious comment was from you in replying to Pepe63's very reasonable comments, when you said:

 

'pepe. I am asking the question out of interest. I am grown up and know that dealers need to make money, its their living. But I am asking a question. sorry don't need your sort of reply. ok.'

 

And guess who wrote this in the 'Moving to the light side' thread?

 

'what the hell are you on. I post my views on MY motorhome, It would not matter if it was Germany made or Italian or even if it came from the same planet you are living on. its my reason for changing LIVE WITH IT.'

 

It must be an Internet thing! ;-)

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Had Enough - 2015-03-06 9:32 AM

 

terry1956 - 2015-03-06 8:38 AM

 

thanks for the feed back. but its a pity that one cant ask a question without some people trying to pick a fight. maybe that's an internet thing I don't know, but I bet they don't act in the same manner face to face.

I like to know things, that's the way my mind works. michael

 

I've come to this thread quite late but I've not seen anyone trying to pick a fight. The most pugnacious comment was from you in replying to Pepe63's very reasonable comments, when you said:

 

'pepe. I am asking the question out of interest. I am grown up and know that dealers need to make money, its their living. But I am asking a question. sorry don't need your sort of reply. ok.'

 

And guess who wrote this in the 'Moving to the light side' thread?

 

'what the hell are you on. I post my views on MY motorhome, It would not matter if it was Germany made or Italian or even if it came from the same planet you are living on. its my reason for changing LIVE WITH IT.'

 

It must be an Internet thing! ;-)

 

 

Well said that man lol

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