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Do car dealers actually sell cars below cost?


Thegodzilla
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Hi!

Just want to understand how do this deals come about?

Please refer to

http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/car_cost.html

 

Close to bottom of link

refer to

"Car Prices

Click the following link for detailed breakdown of car costs:
(based on new cars registered in Jan 2014)"

 

No. 33 BMW M5

No. 177 Lexus GS250

 

Both at "below cost".

 

Are the dealers actually not making money of this couple of sales?

 

Edited by Thegodzilla
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I'm sure some dealers made no profit or even loss for certain transactions due to miscalculation of coe and aggressive strategies. Just like the K3 launch case. Some of the bros here got the car for 94k with 70k+ coe.

 

But I'm sure premiums car dealers probably wouldn't make such loss due to their high profit margin.

 

Unless maybe its a clearance sale of some sort, I noticed the 370z has got a 50k discount from tan Chong, and now it's removed from the car list in tan chong, the sales probably not doing good, so they may not want to bring in after the clearance sale. Anyone can confirm this?

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If everyone thinks like you, there wouldn't be Bugatti Veyron.

Known fact, it loses $6m per car sold.

 

 

 

Nobody will have the sanity to set up a business to lose money.

https://www.google.com/search?q=cars+made+to+lose+money#q=cars+made+to+lose+money&safe=active&start=0

 

http://www.businessinsider.com/bugatti-may-lose-6-million-per-veyron-2013-10?IR=T

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Yes, it is possible. I had bought a brand new car from an AD locally and they had incurred about $20k of loss from the sale to me due to a combination of factors: miscalculation of OMV/PARF and COE projection going wrong for them.

 

 

Hi!

Just want to understand how do this deals come about?

Please refer to

http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/car_cost.html

 

Close to bottom of link

refer to

"Car Prices

Click the following link for detailed breakdown of car costs:
(based on new cars registered in Jan 2014)"

 

No. 33 BMW M5

No. 177 Lexus GS250

 

Both at "below cost".

 

Are the dealers actually not making money of this couple of sales?

 

 

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Nobody would believe that dealer sell cars at cost, but i did on 2 occasions.

 

Donkey years ago, sold Passat at $XX, two half months later saw the same car at c/p, went forward ask the owner how much he bought, same $XX.

 

Sold my IS250 @$XY, dealer showed me the cost upon my take in price,coz thy made fork my trade-in, hence, my IS was 1st owner, well taken care car.

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If car dealers can believe, pigs can climb tree. You believe?

 

 

I have to agree with you, but somehow not all dealer have the same mentality, I do come across some dealer who are genuine and honest though.

 

Pig may not climb tree, but they do taste a lot better- Char Siew , pork knuckle & Bah Kut Teh.

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With the amount of volume they push, there might be an occasional miscalculation especially in our crazy retard car market.

 

For the M5, maybe they take the hit or take small margins just to push some halo cars out on to the road. There's always the benefit on the marketing side which you sometimes can't put a price to.

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Based on all their initial pricing strategy, its all to make money.

 

Given that Bugatti sells enough units per year, won't they make money?

 

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ADs sometimes drop price for models they plan to stop bringing in ... not necessarily discontinued ones, but for example, when COEs were rising quickly in 2010/11, many dealers stopped bringing in the smaller cars.

 

Got my Korean 1.4L back then for $43K only, on a $35K COE

And with deal sweeteners like leather steering wheel, leather gear stick knob and leather gear stick base cover.

 

Can say they sold it at a loss, at guaranteed COE.

COE jumped up after signing S&P agreement - but C&C still honored the contract.

Edited by Astrid
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Based on all their initial pricing strategy, its all to make money.

 

Given that Bugatti sells enough units per year, won't they make money?

 

It is? I'm not too sure.

But I'm sure that they dont have a projection to make $ even when there is demand for it.

 

a main chuck of loses are for R&D development, branding & marketing.

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Its stated in the article. Anyway.. similar to the Veyron, LFA from Lexus is also sold below cost if you factor in all other expenses. Then again, these cars serve other purpose other than to generate income. The publicity they bring in is priceless.

It is? I'm not too sure.

But I'm sure that they dont have a projection to make $ even when there is demand for it.

 

a main chuck of loses are for R&D development, branding & marketing.

 

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The "cost" of the veyron is base on estimate that they "could have earn" if using the normal formula for a production car.

 

Just like our HDB "making losses" every year. [sweatdrop]

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honestly speaking , our NEW car cost can be calculated from the OMV / PARF or ARF / GST / duties / COE

It is true some new cars are sold at LOST

may be due the COE (in hand) is Expire soon or some other commercial factors

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No, if the dealer sells the car at a low price, then he will not get the service charge. So it's impossible that dealers can't sell cars below cost.

 

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Neutral Newbie

One of my (at dealership) told me that sometimes they have to let car go on low price, for example if new year model is on the way and their lot of full with previous/current year model. Also, big dealers can get incentives also from manufacturer if their sales are good, so overall they will be in gain, no matter how :-)

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