Dealership charged over price fixing scam

[c-saw]

http://www.independent.ie/national-...ed-over-alleged-pricefixing-scam-1260024.html

I was considering buying a new car the last few months and phoned loads of dealers throughout Ireland, mainly from a curiosity point of view, to see how much of a variation there was in price.

€650 was the maximum difference between two dealers and most had only a €100 difference. There main aim was to try get me to call in. All prices was within a 100 euro of each other over the phone... The whole thing seemed like a set up... Does this not point to price fixing?

 

[ClubMan]

Does this not point to price fixing?

Isn't that for courts to decide in the specific case(s) mentioned?

 

[c-saw]

Sure, but I use it to draw attention to the very little variation in price between many dealers throughout the Country.

The individual case is a matter for the courts. From what I gather is there is little competition...

 

[Guest120]

Sure, but I use it to draw attention to the very little variation in price between many dealers throughout the Country.

In all honesty you did your pricing via the phone, not many dealers take a phone call seriously nor give an indicative final price over the phone.

 

[Purple]

The margin on cars is low, unions fix the pay rates for most staff and the trade-in values are all taken from the same source. There's not much to play with, what do you expect?

 

[c-saw]

I did call to six dealers, three in the Dublin area and three outside of the Dublin area. €650 was the difference I got... (Cash deal - no trade in). Same as on the phone...
I would have thought that for a car value of 30,000 there would have been a bigger price variation but as pointed out with car margin low, and pay rates fixed then I suppose this would constrain the price variation between dealer.

Still, it doesn't leave a lot of room for competition and a lot of option to shop around.

 

[MrMan]

I suppose you could say that the competition is between the car makes and their pricing rather than the dealers, i.e new nissan being cheaper than new mazda etc

 

[werner]

I did call to six dealers, three in the Dublin area and three outside of the Dublin area. €650 was the difference I got... (Cash deal - no trade in). Same as on the phone...
I would have thought that for a car value of 30,000 there would have been a bigger price variation but as pointed out with car margin low, and pay rates fixed then I suppose this would constrain the price variation between dealer.

Still, it doesn't leave a lot of room for competition and a lot of option to shop around.

In a truly competitive market there would be greater variation. I had a much better buying experience in the UK.

Having seen the previous RTE program highlighting (Car)tel's I am not surprised at all.

Some links
http://www.rte.ie/news/2007/0130/manningd.html

[broken link removed]

 

[efm]

But the prices and rebates etc are set by the manufacturers and their distributors not by individual garages - you would be surprised at how low the margin is on new car sales for some marques

 

[Miles]

But the prices and rebates etc are set by the manufacturers and their distributors not by individual garages - you would be surprised at how low the margin is on new car sales for some marques

Can anyone give an idea of the margins on a new car?

 

[Mr2]

Between 5%-17%, example, Small Car cost a dealer €14,000, retail €15,400. You think garage make €1,400 out of that deal, times a 100 cars is €140,000. Most that margin is lost in either the trade in price (car sits on the lot, cost garage money in finance) salesman make between 10-15% of profit for his wage at the end of the week.

The french/italian cars usually have largest margins and will give you 10% off nearly straight away but that effects the price of your trade in.

Look at the MINI, you will find it very hard to even get a euro of the sticker price in Ireland but there is confidence then in the person buying the car as they can almost know what there going to get in two years etc when they trade it in.

Like someone said up above the real competition is with the different brands, Corolla v's Focus v's Golf etc.

Remember if you get a large dis-count etc there is always a reason, the brand is crap, the car is an old model, the dealership can't sell a car and has been around a long time and wants rid of it (the finance is costing the dealership).