Why do UK dealers offer larger discounts than Irish ones?

I was looking at some UK owner forums while researching new cars and was struck by the level of discount people seen to achieve. Figures of 15% and 17% seemed very achievable with large "dealer contributions" being mentioned, even on high-spec BMWs and Mercedes. I have never been able to get anything close to this in Ireland. Am I a poor negotiator or do Irish dealers not have the margin to do this? What discount levels are possible in your experience?

Andrew Kelly (Limerick)

Nov 2013 Filed under: choosing new car

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Expert answer

Hi Andrew,

Whether it's a case of giving us the poor mouth or not I'm not sure but Irish dealers by and large operate on a margin of between 8 and 12 per cent. That can vary wildly between brands, of course. Dacia dealers for instance will probably tell you they work on a margin closer to five per cent, so don't go asking for discounts. Premium brand dealers will obviously have broader margins so there is a little more scope for discounting there. 

The UK market has a number of advantages over us when it comes to seeking out bargains. For a start, there's no VRT to pay, whereas anything from 30 to 50 per cent of every Irish dealer's sale goes straight into the tax man's pocket. Competition in the UK is also much more cut-throat and the big dealers have to compete with the likes of car supermarkets, so they're keener to offer discounts.

If you're looking for bargains at the moment in Ireland, the best thing to do is watch for pre-registrations. To meet their market share targets, many importers are pressuring their dealers to register cars that will then be sold as 'nearly new' or 'demo model' at a significant price cut. The best thing to do is shop at the start of the month, as most pre-registering will be done on the last working day of the previous month and dealers will be keen to off-load pre-registered stock.

Hope all that helps

Neil Briscoe - Complete Car Adviser
@neilmbriscoe