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View Full Version : Golf mkVII Buyers - What was the deal closer?



DV52
04-03-2014, 04:49 PM
I guess that for many of us, buying a new Golf can be a harrowing experience. Let's face it, Joe average enters the negotiating arena very much behind the eight-ball when pitted against a new car salesman (please read my gender specific terms generically). Sure there are dud salesmen but in general these guys are professional negotiators, plus they know all the tricks to cajole, tease and to influence the outcome. In truth, selling cars is their full time job and most are very good at it!

Joe average on the other hand probably buys a new car once every blue-moon. Whilst he might think that he is gun negotiator, in reality, any perception about Joe-average's equal position in the bargaining process is flawed because of the huge information asymmetry that exists. Even if Joe-average is himself a negotiator in another stream of work, the information available to the car salesman is always far better than that possessed by the buyer.

However, despite the tilt in the level-playing-field, in many cases deals are done and cars are sold with increasing frequency these days.

I reckon that a good way of helping to re-level the playing field is for new car buyers to share their experiences in a forum like this. Specifically, I think that it would be interesting to hear from others about what it was that actually sealed the deal. I'm not asking for anyone to discuss prices - except if you want - and then only in the broadest of terms.

In general, the question is: What was the thing in the negotiating process that drove you sign the sales contract? Was it for example, the salesman's manner (or his snappy suit and tie), or the free goodies, or the reputation of the dealership, or the quality of the coffee that the dealer offered, or anything else?

Interested in your responses.

veew
04-03-2014, 07:37 PM
Price is the main factor.

I'll have a price in mind after researching, discussing with sales people personally/over the phone, comparing to other peoples prices on the forum etc. Once I've set my price I approach the dealers I'm likely to buy off and silent auction them off between themselves until I have the best price.

The harrowing factor for me was mechanical issues that I had been following online for 5 years...so yeah I've been looking at potentially buying a Golf on and off for that long haha

egsolomon
04-03-2014, 07:43 PM
For me, at the end of the day, it is the change over cost.

I'm lucky enough to be in the position of not needing finance of any kind, it is simply a back cheque in favour of the dealer. With the current 103TSI Highline that I just purchased (moving down from a VEII SS), I was happy to walk away and keep the SS if I didn't get the change-over I wanted.

I'm upfront with the dealer, and let them know that change-over is all that counts, I don't need finance or anything else. This I have found with my last 3 purchases appears to put me and the wife in the drivers seat.

When I wasn't in that position, it came down to which dealer was offering the best deal, finance wasn't an issue, as we simply used the redraw on our home loan.

Alex31
04-03-2014, 09:06 PM
With the current 103TSI Highline that I just purchased (moving down from a VEII SS)

Moving Down form a VE?


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giveway
04-03-2014, 09:37 PM
What don't you understand about moving down from a commodore?

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Alex31
04-03-2014, 10:03 PM
Touched a nerve, sorry... I Think going from a GM to a VW would be considered a move up. Even with the loss of size and cylinders


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ziggyboy
04-03-2014, 10:44 PM
In general, the question is: What was the thing in the negotiating process that drove you sign the sales contract? Was it for example, the salesman's manner (or his snappy suit and tie), or the free goodies, or the reputation of the dealership, or the quality of the coffee that the dealer offered, or anything else?

It's really just price. I've got an Asian background and grew up watching my family and friends negotiate their asses of in many countries we've visited. We're immune to things like the salesman's manner, good demeanor, or small talk (LOL). Again, just price!

This is just for sales though. Choosing a dealership or mechanic to service your car is a different ballgame. The reason I don't mind buying from the dodgiest dealership if they can give me the best price is I don't need to return for warranty repairs or service. I can always go elsewhere.

I visited a Mazda dealership to look at the 3 couple of weeks ago. He had everything you mentioned...presentation, politeness, endless small talk, offered us coffe..everything. But we were really just there to check it out. He even talked about the possibility of giving us a really good deal. Afterwards the gf and I agreed that anyone else who never had experience buying a car would have bought one on the spot.

Sorry but I never understood the whole "my salesman was such a great guy to deal with, that's why I bought a car from him!" excuse!

Finance_Analyst
05-03-2014, 07:33 AM
It's really just price. I've got an Asian background and grew up watching my family and friends negotiate their asses of in many countries we've visited. We're immune to things like the salesman's manner, good demeanor, or small talk (LOL). Again, just price!

This is just for sales though. Choosing a dealership or mechanic to service your car is a different ballgame. The reason I don't mind buying from the dodgiest dealership if they can give me the best price is I don't need to return for warranty repairs or service. I can always go elsewhere.

I visited a Mazda dealership to look at the 3 couple of weeks ago. He had everything you mentioned...presentation, politeness, endless small talk, offered us coffe..everything. But we were really just there to check it out. He even talked about the possibility of giving us a really good deal. Afterwards the gf and I agreed that anyone else who never had experience buying a car would have bought one on the spot.

Sorry but I never understood the whole "my salesman was such a great guy to deal with, that's why I bought a car from him!" excuse!

I second that. being also of Asian heritage, it all comes down to the dollars and cents and the value for money proposition. That is what our culture is built on. Case in point

1. My sister bought a 103TSI in Jan. never dealt with Norris, as I bought my GTi from GC VW. Gave them a chance, got the price down to $30,800 when RRP was $36,200. Promo not negotiable price was $31,990 but still fought for the extra $1200. Dealer was ok to deal with but getting that discount was all that mattered.

2. For my Range Rover, all dealers were offering free on roads etc as part of main event promo. Went to GC, tried to con me by not initially wanting to sell me a white car which I only wanted (partly to avoid paying the rip off metallic paint charge of $1,800), which also happens to be the most popular colour. When I would not budge, they suddenly found a white one not in the system and said it was my lucky day. BS!! Then went to Brisbane Land Rover, got the white one and free servicing for 3 years. The experience there did count for something as I do not like to be BS around when I know what I want and how much to pay.

Conclusion. I am not fooled by the sales pitch. While a nice experience is a bonus, as long as I get what I want at the right price, the extra bits are irrelevant but an added bonus if they come through

Dutch77
05-03-2014, 07:35 AM
The dealer threw in one of the new GTI caps..

Kidding - price, price and price again.

FWIW, dealers generally aren't making much on a discounted new car and always will try and make it back on the top ups afterwards whether that be finance, insurance or paint/rust packs. Therefore as a cash buyer not using those services I never rule that out until AFTER signing for the car as there can be times where the dealer might go a little lower in the hope of picking it back up on the add-ons.

giveway
05-03-2014, 01:11 PM
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DV52
05-03-2014, 03:10 PM
It's really just price. I've got an Asian background and grew up watching my family and friends negotiate their asses of in many countries we've visited. We're immune to things like the salesman's manner, good demeanor, or small talk (LOL). Again, just price!


I second that. being also of Asian heritage, it all comes down to the dollars and cents and the value for money proposition. That is what our culture is built on.

Gee it would have been great to be raised as a child in a culture where the exquisite art of negatiation is such a fundamental part of life! What a great legacy for your folks to leave their kids!


Price is the main factor.

For me, at the end of the day, it is the change over cost.

Kidding - price, price and price again.

I'm going out on a limb here, but I'm sensing an emerging pattern to responses. Not unreasonable to make "price" a necessary condition to close the deal. This was also a necessary (and sufficient) condition for me.

In my case, I first chose the car that I wanted and then I did a kind of "Tender" in which I invited five different dealers to give me their lowest price. I told each of the dealers, that I would not disclose any prices to other bidders and I held firm to this undertaking (despite repeated requests by salesman for me to disclose competitor prices). Four were willing to participate and in the end, two of the four gave me almost identical prices. From the two, I chose the one that was physically nearest to where I lived. Still not sure if this was a good process, but I couldn't think of a better one at the time.

A couple of responses mentioned buying a 103TSI (mine was also a 103TSI). I reckon that we all thought that we got the best price, but (for those of us that bought the same car) I bet that each of our prices were different!

So here's the rub:- why did we all consider the purchase price as being a good price? In looking back at my own experience, here's where I think the recommended retail price came into play. For me (and I guessing for many others), my expectations of what I would be prepared to pay for my 103TSI was set very early in my purchasing process by the dreaded RRP. I'm annoyed to admit that it was a sub-conscious decision that I made and it set the yardstick by which I would consider all subsequent proposals from dealers.

Does anyone ever pay RRP for a new car? I guessing probably not, so what's the use of it? Well, I reckon that it's sole purpose is to establish the buyer's expectation of value, so that it forms the reference point for the buyer's ultimate decision. Competition is meant to reduce the price of goods down to cost plus a margin, but I very much doubt that this happens when buying a new car. I have absolutely no idea of the cost of a new car to the dealer, but I reckon that it has very little (if anything) to do with the RRP. Hence my assertion that information assymetry is alive and well in the new car industry!

egsolomon
05-03-2014, 04:13 PM
With the current 103TSI Highline that I just purchased (moving down from a VEII SS)

Moving Down form a VE?

Down in size,cylinders, overall power and torque, top end speed, 0-100 in 4.8 secs (and yes a slightly worked V8 with full exhaust, intake and reprogrammed)...and only three years old.

it came down to what I need right now, no kids, no more long commutes, now work 5 mins from home, and no more towing a boat. So no need for 16l/100km. That will change in the future. But really enjoying the Golf right now.

cox11
05-03-2014, 04:26 PM
I've had a Mini Cooper S for the past 3 years and with a 10 month old getting him into the back was getting awkward. We were determined to manage with a small car so We narrowed our choice down to a countryman S or a GTi. We went for the GTi for 2 reasons. 1 after driving the mini we thought the countryman was the ugly, slightly handicapped sister of the Cooper s. 2 the countryman was considerably more expensive

veew
05-03-2014, 04:30 PM
RRP is used as part of the psychological game to give you the impression of a good deal. A great deal can always be had, but there are always factors that influence the price we have in mind. Factors such as when car was built/complianced, concurrent promotions, levels of stock and how long you're willing to wait for the car.

For me I got sick of waiting after 2 months for my factory order and looked around, glad I did as I ended up getting a car much sooner with leather for only $1000 more. I can tell you, however, that in the back of my mind I was working out how much more I was willing to pay to get the car as soon as possible.

If you are buying a car through the factory backed promotions, keep in mind that dealers get kick-backs from the factory for the eligible vehicles so you just need to find a dealer who is willing to shrink their margins further than the standard deals. Looking at the recent threads, it seems people are getting some great deals below the Volksfest Highline drive away prices.

ziggyboy
05-03-2014, 04:40 PM
I just hope you don't mistake my upbringing as being too money centric. My parents are Christians and I was brought up as one (though I'm not one anymore), but every single person on this planet will have to participate in some form of commerce in their lives. I'm sure even the pope concerns himself with Vatican financial matters and church purchases. I just want the best price I can get anything for.

What this demonstrates is that the purchasing process is very much a cultural thing. It's very easy for one party to get insulted if buying norms are different-- like I've heard of people get angry when someone offers 50% the original cost. But what they don't understand is that the buyer likely doesn't expect to buy it at that price.. but maybe something in between.

Another example is when I bought my bulldog as a puppy. Dog lovers here will know they are not cheap. After agreeing on the price, I told the breeder that I would like to pick up the puppy weeks earlier than originally anticipated. Because of this, my puppy will get 1 less vaccination shot than originally planned. I asked if I can get a "discount" on the puppy taht's approximately the cost of the vaccination he won't get. I was accussed of being too concerned with money and if I can't afford $150 I shouldn't be owning a bulldog etc etc. Let's just say that this person doesn't live in a part of Australia where he'd be exposed to a lot of different cultures with different buying habits. I still bought the puppy from him though.. mainly becaue they are very hard to come by and demand was high.

Last but not least... price is important but I will buy a car even $100 more than the cheapest if it was more convenient (ie 10kms from home vs 100kms). I'm not THAT crazy about a bargain.....

zardoz
05-03-2014, 09:57 PM
Hi,

Shopping around for a wagon and it seems nobody has a fully optioned one available so it looks like a factory build. Dealers aren't willing to move much on price since it's a new release. How much -are- they making out of this and how far could they be willing to go?

Hoping to avoid finance this time - perhaps it's best to disclose that after agreeing on price? Happy to talk about extras (paint protection etc) once I have a firm delivery date at least to make them -think- they're going to do better.

When I picked up the mark 6 wagon, I test drove a Calais wagon the same day and wasn't a fan. Perhaps the VF is an improvement.. but since I prefer the smaller vehicle, the Golf Wagon turns out to be cheaper (actually, so does the Passat, incidentally)...

I've got three dealers I'm willing to buy from and will be going with the cheapest price. I have one dealer I'd prefer to give my business to, however. Will using a tender method piss them off instead of build loyalty?

NewBuy
05-03-2014, 09:59 PM
Hi all

Let me start by saying we are a new sponsor of this site and dealer negotiations are what we are about.

In my experience the best way to buy a car is to set your own price and tell the dealer - take it or leave it. If they say no, walk away. Try another dealer, re-evaluate your price etc...

To make it easier we've built a website that lets you set a price and push your offer out to every dealer instantly! That puts extra pressure on dealers to accept your offer before another dealer does.

So if you're in the market for a new car check us out at Home - NewBuy (http://www.newbuy.com.au).

James

Dutch77
06-03-2014, 06:22 AM
I've got three dealers I'm willing to buy from and will be going with the cheapest price. I have one dealer I'd prefer to give my business to, however. Will using a tender method piss them off instead of build loyalty?

It's business - if it pisses them off then maybe they're not the preferred dealer. I'd be inclined to get the best price and then, if it's not your preferred dealer, go to them and explain your keen on dealing with them so can they get to $x price level.

Also remember that quite often the best price can only be obtained after signing an offer - so don't be afraid to lowball on that and then look to negotiate (as long as you're happy to buy at the offer price should they accept it).

ziggyboy
06-03-2014, 09:05 AM
Hi all

Let me start by saying we are a new sponsor of this site and dealer negotiations are what we are about.

In my experience the best way to buy a car is to set your own price and tell the dealer - take it or leave it. If they say no, walk away. Try another dealer, re-evaluate your price etc...

To make it easier we've built a website that lets you set a price and push your offer out to every dealer instantly! That puts extra pressure on dealers to accept your offer before another dealer does.

So if you're in the market for a new car check us out at Home - NewBuy (http://www.newbuy.com.au).

James

Hi James. This sounds great. I would love to be able to just set the price and get a straightforward answer on whether I can buy it at that price or not.

Negotiations do take a while if you wanna get the best price. Worst thing about it is that salesmen know if they can sell it at a particular price or not, but drag you down a path of unnecessary negotiations to get you to pay more or sell accessories you don't really want. I know it works for others but not for me as I just keep saying no. Would be good to cut the crap and just tell me whether its ok at a price or not!

Just a question: how is this different from a car broker? What's your commission pricing like?

DV52
06-03-2014, 09:10 AM
I just hope you don't mistake my upbringing as being too money centric. My parents are Christians and I was brought up as one (though I'm not one anymore), but every single person on this planet will have to participate in some form of commerce in their lives. I'm sure even the pope concerns himself with Vatican financial matters and church purchases. I just want the best price I can get anything .....

Ziggyboy:whilst I'm not of Asian background, I also was raised a Christian. And like you I'm no longer a believer (agnostic now). My experience has been that being, or not being religious makes no difference in ones attitude to negotiation. Some of the best proponents of the art of negotiation have been devoutly religious.

The most important thing about negotiation is to remember that it is what game theorist call "a net sum game". It's amazing how many people forget this simple principle.

And yes, I'm certain that the pope is an expert in the art of negotiation. Perhaps he doesn't use his skills for financial gain (after all the Catholic Church's objective is not about attaining wealth - hmmm). But, I don't believe that someone gets to be the head of such a humongous organisation without being an extremely proficient negotiator. Doubtless " our Aussie George" (Pell) will need to hone-up his skills in his new role!

peanutz
06-03-2014, 11:04 AM
Deal closer for me is price, salesman's attitude, and time taken to negotiate. I bought Golf Highline last Saturday. The first dealer was too busy to talk to me. No problem, I moved on. The second dealer lied to get me in as I was considering Comfortline and Highline and they said they had Comfortline. When I went over, they didn't have one. Not sure because I told them I need a car as I sold my old car and had nothing now, they didn't want to budge on the driveaway price but kept bragging about how good the car is. I walked away, they then offered $1k discount, after they slapped on $500 for metallic paint at the start, pending manager's approval. The third and last dealer got my message that I wanted to talk price and nothing else so he started off by including metallic paint in the driveaway price and coming down from there in much lesser time than I spent with the second dealer.

NewBuy
06-03-2014, 02:35 PM
Hi James. This sounds great. I would love to be able to just set the price and get a straightforward answer on whether I can buy it at that price or not.

Negotiations do take a while if you wanna get the best price. Worst thing about it is that salesmen know if they can sell it at a particular price or not, but drag you down a path of unnecessary negotiations to get you to pay more or sell accessories you don't really want. I know it works for others but not for me as I just keep saying no. Would be good to cut the crap and just tell me whether its ok at a price or not!

Just a question: how is this different from a car broker? What's your commission pricing like?

Exactly!

We charge the dealer a fixed dollar-price on contract signing.

There's no fee to the buyer for building their car/options etc and submitting it to the dealers, who then consider the price and transact if they can accept that price. No negotiating, no drama, just straight forward 'can I really sell the car for this much' yes or no.

We're more like a portal to the dealers, It makes the dealers experience easier because its a committed yet anonymous and proteted buyer until a deal is done, and more powerful to the new car buyer, as the price and options are set by the buyer - take it or leave it.

DV52
06-03-2014, 05:09 PM
Exactly!

We charge the dealer a fixed dollar-price on contract signing.

There's no fee to the buyer for building their car/options etc and submitting it to the dealers, who then consider the price and transact if they can accept that price. No negotiating, no drama, just straight forward 'can I really sell the car for this much' yes or no.


James: Like Ziggyboy I also consider your product to be innovative. At first, I thought that you were acting as a buyer's advocate. But having now read the FAQ on your website, it seems to me that you are providing an "introduction service" between buyer and seller - a kind-of intermediary service. If I understand your business model correctly, there would appear to be a degree of alignment between your service and many of the folk on forums such as this.

Whist I'm sure that your business will indeed prosper, the presence of new entrants like NewBuy is proof positive that the (normal) process of buying a car is far from efficient. In fact, the reason why NewBuy can offer its customers a service with real value is because the usual practice of buying a new car is so fraught with problems. Just read the issues that have been identified in many of the posts to this thread if there is any doubt about the tribulations that new car buyers have to face. And it needn't be so. Clearly the founders of NewBuy have been bright enough to see these problems as an opportunity and to create a product to fill the gap - well done!

The above plaudits notwithstanding, I'm still confused about your response to Ziggyboy's question regarding the commission structure. When you say "There's no fee to the buyer for building their car/options .....", who actually underwrites NewBuy's commission to the seller under your service?

My last bit of praise to NewBuy relates to your decision to sponsor VWW. I have absolutely no idea of the funding arrangements for a site like this, but I doubt whether the expenses incurred can be sustained without the support of companies like yours. I hope that the relationship is a long and profitable one - thanks.

DV52
06-03-2014, 05:13 PM
Deal closer for me is price, salesman's attitude, and time taken to negotiate. I bought Golf Highline last Saturday. The first dealer was too busy to talk to me. No problem, I moved on. The second dealer lied to get me in as I was considering Comfortline and Highline and they said they had Comfortline. When I went over, they didn't have one. Not sure because I told them I need a car as I sold my old car and had nothing now, they didn't want to budge on the driveaway price but kept bragging about how good the car is. I walked away, they then offered $1k discount, after they slapped on $500 for metallic paint at the start, pending manager's approval. The third and last dealer got my message that I wanted to talk price and nothing else so he started off by including metallic paint in the driveaway price and coming down from there in much lesser time than I spent with the second dealer.

peanutz: congratulations on buying the Higline. You will find it an absolute delight to drive (as do I)!

ziggyboy
06-03-2014, 05:28 PM
Exactly!

We charge the dealer a fixed dollar-price on contract signing.

There's no fee to the buyer for building their car/options etc and submitting it to the dealers, who then consider the price and transact if they can accept that price. No negotiating, no drama, just straight forward 'can I really sell the car for this much' yes or no.

We're more like a portal to the dealers, It makes the dealers experience easier because its a committed yet anonymous and proteted buyer until a deal is done, and more powerful to the new car buyer, as the price and options are set by the buyer - take it or leave it.

Sounds like a dating website :) The process seem very similar.

What would be better is if you can take my deposit money and give it to the first dealer that agrees on a price. It gives the dealership the assurance that I'm a serious buyer....because this also has the potential to turn into a back and forth negotiation process (from what I have read dealerships can counter offer).

Something like:

1. I want the car for $27k.

2. I enter my CC details and you debit an amount I'm willing to put up as deposit (ie $500).

3. You perform an auth on my CC for $500

4. Dealers see my offer and that a $500 is up for grabs to accept at that price.

5. A dealer accepts my offer

6. $500 is debited from my CC and credited to the dealer's account

7. We finalise the contract

8. Money is "released" to the dealership

Buyers need protection in case the dealership accepts but tries to renegotiate.

OilBurna
06-03-2014, 05:34 PM
Give the stealer your lowball price and expect to walk or be told to walk. Recent buying experience dealer told me to give him a figure I did and expected to be told to walk but he said let me put the number to the regional manager. He came back with a figure which was 500 higher so he agreed to chuck in a tint and first service free so both parties happy.


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OilBurna
06-03-2014, 05:36 PM
Also good to go in late on a Saturday at the beginning or end of the month


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ziggyboy
06-03-2014, 05:41 PM
Holy crap you already do all that! Sorry just read the complete FAQ now.

Good job!

marcsamus
06-03-2014, 05:54 PM
The deal closer would have been the dealer having the car they said they had when I sent the purchase order through. I remain golfless

NewBuy
06-03-2014, 08:06 PM
[QUOTE=DV52;1036351]James:
The above plaudits notwithstanding, I'm still confused about your response to Ziggyboy's question regarding the commission structure. When you say "There's no fee to the buyer for building their car/options .....", who actually underwrites NewBuy's commission to the seller under your service?

Thanks for the positive comments DV52. As for fees NewBuy will invoice the dealer after the event for each successful transaction. The fee is a low fixed dollar amount per transaction, not a percentage of the car price.

NewBuy
06-03-2014, 08:08 PM
Holy crap you already do all that! Sorry just read the complete FAQ now.

Good job!

You even guessed the deposit amount right! Unbelievable!

ziggyboy
07-03-2014, 07:38 AM
You even guessed the deposit amount right! Unbelievable!

LOL I do this for work. I'm a IT business/solutions analyst and design systems around business processes....

ziggyboy
07-03-2014, 07:51 AM
The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

As I suggested in my original process, fulfill the payment following the CC auth on dealer acceptance then maybe consider "releasing" the funds to the dealer after proof of a full contract being signed. The releasing bit can be that they cannot credit the money to their account (PayPal or bank) until proof of completed contract.

Because it may only take one dealership to try and do that to ruin the experience and slow your business. THe internet can be a powerful tool and the type of people who will initially use your service are the type of people who will post in these forums. I'm not being pessimistic but if it did happen to me, I will warn others on forums such as these and word travels fast with "car forum savvy" drivers....

AdamD
07-03-2014, 08:24 AM
The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

A contract doesn't need to be signed to be legally binding. The parties simply need to agree (and it helps if the terms are clear when they do!). Agreement can be in many forms, and doesn't even need to be verbal. Acceptance of a deposit is likely to be considered agreement (although the terms under such circumstances may be up for debate). If the dealer accepts the deposit at the agreed price then the contract is binding, and they are bound to deliver the vehicle at the agreed price. In practice I would assume that the dealer would only enter into any contract of sale subject to their own standard terms of sale which may well give them recourse to get out of the contract should certain circumstances change (and may even extend to a "we got it wrong" - as to whether it's legal or not to impose such a term under contract law is another matter). Worst-case scenario, both parties exit the contract and the buyer is entitled to a full refund of the deposit.

ziggyboy
07-03-2014, 09:18 AM
A contract doesn't need to be signed to be legally binding. The parties simply need to agree (and it helps if the terms are clear when they do!). Agreement can be in many forms, and doesn't even need to be verbal. Acceptance of a deposit is likely to be considered agreement (although the terms under such circumstances may be up for debate). If the dealer accepts the deposit at the agreed price then the contract is binding, and they are bound to deliver the vehicle at the agreed price. In practice I would assume that the dealer would only enter into any contract of sale subject to their own standard terms of sale which may well give them recourse to get out of the contract should certain circumstances change (and may even extend to a "we got it wrong" - as to whether it's legal or not to impose such a term under contract law is another matter). Worst-case scenario, both parties exit the contract and the buyer is entitled to a full refund of the deposit.

Even if the contract is technically binding, what will prevent this from happening? In the real world, no one sues for $500. Regulatory bodies such as Fair Trading are toothless tigers. They can write letters that demand payment but it it is as good as my grandma writing the same letter. Only a court can enforce this. Why? Because Fair Trading won't get their lawyers to sue a dealership for $500. In fact, if you do research, these bodies only go to court when many individuals are affected (ie. class action type cases). They won't legally represent one Joe Bloggs. You may take them to the small claims court but that should be the last resort. Even that, takes time, effort and more money.

Sure this can happen even in a face to face car sales transaction, but less likely. Having the web as a medium will also invite abuse from both sides. It's much easier to do this online than it is in real life. I can go to Coles, fill up my cart, have the cashier chick scan everything then when asked to pay, just walk away. Nothing illegal here, but as you can see it is much less likely to happen in person than online. I can log onto eBay, select "Buy Now" and just not pay for it. Admittedly I have done this once when I bought the wrong product. I had multiple eBay pages open and bought the wrong item. Seller threatened me, said I was legally bound to buy it. I ignored it. eBay dispute was initiated and I said I bought the wrong item. They eventually just closed it. Did I waste their time? Probably. Was it a legally binding sale? Probably.... but a court will probably just laugh if brought to their attention, especially for $200 when no money was transferred and no product/service rendered.

BUT.... even after all this I will try their service out. My partner is looking for a new car right now. Will test drive over the weekend and give the site a shot. We live in the ACT but don't mind buying from Sydney without ORC (NewBuy, does your site allow me to set this as a condition?).

DV52
07-03-2014, 12:06 PM
Thanks for the positive comments DV52. As for fees NewBuy will invoice the dealer after the event for each successful transaction. The fee is a low fixed dollar amount per transaction, not a percentage of the car price.

James: I kinda knew the answer, but I had to ask - my appology! My (tongue-in-cheek) question was directed at the way that you phrased your response (no enmity intended). Whilst I'm still of the opinion that NewBuy is an interesting product, I didn't think that you had set-up a philanthropic organisation. In the end, the consumer always pays and that's probably the way that it should be!

Given my admittedly novice understanding of the way NewBuy works, I assume that what the Buyer is really doing when completing your proforma is bidding for the cost of a new car (with options), plus the cost of the (modest) fee that the seller passes back to the introduction agency. Nothing wrong with this, just a different way of answering Ziggyboy's question.

I've re-read your FAQ and I have one last question (I promise not to bother you any further). I assume that participating in your product does not prohibit the "punter" from independently seeking her own deals with prospective dealers. I'm not certain, but such a prohibition (if it existed) might fall foul of the third-line forcing provisions in our competition law. Anyway, what is the status of the punter's bid to NeyBuy if a dealer has received a price from you and the punter separately (and coincidentally) places the same bid to the same dealer - and it is accepted?

NewBuy
09-03-2014, 12:12 PM
The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

As I suggested in my original process, fulfill the payment following the CC auth on dealer acceptance then maybe consider "releasing" the funds to the dealer after proof of a full contract being signed. The releasing bit can be that they cannot credit the money to their account (PayPal or bank) until proof of completed contract.

Because it may only take one dealership to try and do that to ruin the experience and slow your business. THe internet can be a powerful tool and the type of people who will initially use your service are the type of people who will post in these forums. I'm not being pessimistic but if it did happen to me, I will warn others on forums such as these and word travels fast with "car forum savvy" drivers....

Hi ziggyboy, as you suggest we do not intend to release the deposit to the dealer until they let us know a contract has been signed. We'll check our FAQs if that is not clear. Whatever the case, if anything goes wrong and the contract does not get signed we will refund the buyers deposit no questions asked.

NewBuy
09-03-2014, 12:17 PM
James: I kinda knew the answer, but I had to ask - my appology! My (tongue-in-cheek) question was directed at the way that you phrased your response (no enmity intended). Whilst I'm still of the opinion that NewBuy is an interesting product, I didn't think that you had set-up a philanthropic organisation. In the end, the consumer always pays and that's probably the way that it should be!

Given my admittedly novice understanding of the way NewBuy works, I assume that what the Buyer is really doing when completing your proforma is bidding for the cost of a new car (with options), plus the cost of the (modest) fee that the seller passes back to the introduction agency. Nothing wrong with this, just a different way of answering Ziggyboy's question.

I've re-read your FAQ and I have one last question (I promise not to bother you any further). I assume that participating in your product does not prohibit the "punter" from independently seeking her own deals with prospective dealers. I'm not certain, but such a prohibition (if it existed) might fall foul of the third-line forcing provisions in our competition law. Anyway, what is the status of the punter's bid to NeyBuy if a dealer has received a price from you and the punter separately (and coincidentally) places the same bid to the same dealer - and it is accepted?

Hi DV52, yes I agree with how you have described what the punter is making an offer for.

If you use NewBuy you are not prohibited in any way from continuing to negotiate elsewhere. My only suggestion would be that you pull your NewBuy offer from the market before you agree to another deal.

Cheers
James