Are on road costs a rort in NZ?

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mattwnz

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#171686 27-Apr-2015 20:50

Friends are buying a brand new car. As part of the quote, the dealer has added in approx 1k for on road costs. As the registration and warrant on a new car is about half that they questioned what the difference in price covered. The dealer said that one cost was car grooming and cleaning. This is supposed to be a brand new car, so why would it need grooming? If you buy a new tv, you don't expect to have to pay for it to be cleaned before hand as an additional cost. Am I missing something here, or does this area of car sale need some form of consumer protection. They were told that it was negotiable, but adding grooming onto the price of a new car sound doesn't sound right to me. They did say that someone had to pay for it, but do these new cars arrive in NZ in filthy condition or something? Also shouldn't that be included as part of the new car price, that the purchase price means that it is sold in a condition that is saleable (eg in mint condition). I am somewhat surprised it isn't something Consumer NZ hasn't investigated.

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#1292536 27-Apr-2015 20:58

yes they are a rip, but here is a list of the current prices
http://beta.nzta.govt.nz/vehicles/licensing-rego/vehicle-fees/registration-fees/

if they are buying now get them to do the lowest period possible as in july the price drops on average 41% for a rego so if you pay the current rate for 12 months you a are wasting money. ie dont get 12 months.

negotiate it down.

MikeB4

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#1292543 27-Apr-2015 21:01

I have never paid the "on road costs" that has always told them that these are the fist part of discounts they are giving..

Here is a crazy notion, lets give peace a chance.

tdgeek

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#1292544 27-Apr-2015 21:01

Not a rort, just the cost over and above that quoted in the link above. Its just like Interest Free, then ad on booking fee, admin feee, etc, etc

mattwnz

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#1292564 27-Apr-2015 21:06

Jase2985: yes they are a rip, but here is a list of the current prices
http://beta.nzta.govt.nz/vehicles/licensing-rego/vehicle-fees/registration-fees/

if they are buying now get them to do the lowest period possible as in july the price drops on average 41% for a rego so if you pay the current rate for 12 months you a are wasting money. ie dont get 12 months.

negotiate it down.

Thanks, that is a good point about the changes to rego costs, which I believe is due to the reductions in ACC. The car they are purchasing is less than 2400 CC so would be one of the chepest levels, so I wouldn't expect the due onroad costs would be over $500 combined. But the dealer looks like they are adding a 100% margin on top of this. There maybe some cost with them filling up the fuel tank and fluids of the vehicle (say $50-$150).
With these changes to the registration , they do have potential to increase this margin, as I can't see them reducing their onroad costs.

mattwnz

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#1292570 27-Apr-2015 21:12

tdgeek: Not a rort, just the cost over and above that quoted in the link above. Its just like Interest Free, then ad on booking fee, admin feee, etc, etc

Yeah, but would you expect a brand new car would need grooming as part of onroad costs? This isn't an exdemo, but new out of their warehouse.

The way I see it, it is another opportunity to make a bit more of a margin on the sale. I have never paid onroad cost directly myself either, and it would have just come out of their margin. The other annoying thing they did was remove the GST, and then add it back on, to make it look like it was cheaper initially, but as it was a personal purchase, they really should haven't have done this IMO.
Admin fees, etc, are costs that also should be coming out of their margin, as they are a normal cost of sale, they shouldn' tbe getting added on. This is paying cash, not via a loan, you would only expect those costs when getting a loan.

MikeB4

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#1292574 27-Apr-2015 21:17

mattwnz:
tdgeek: Not a rort, just the cost over and above that quoted in the link above. Its just like Interest Free, then ad on booking fee, admin feee, etc, etc

Yeah, but would you expect a brand new car would need grooming as part of onroad costs? This isn't an exdemo, but new out of their warehouse.
The way I see it, it is another opportunity to make a bit more of a margin on the sale. I have never paid onroad cost directly myself either, and it would have just come out of their margin. The other annoying thing they did was remove the GST, and then add it back on, to make it look like it was cheaper initially, but as it was a personal purchase, they really should haven't have done this IMO.
Admin fees, etc, are costs that also should be coming out of their margin, as they are a normal cost of sale, they shouldn' tbe getting added on. This is paying cash, not via a loan, you would only expect those costs when getting a loan.

New cars come in built up they are covered in plastic and a coating to protect the paint etc while in transit. They require a lot of grooming to make the showroom presentable.

Here is a crazy notion, lets give peace a chance.

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Jase2985

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#1292576 27-Apr-2015 21:19

MikeB4: New cars come in built up they are covered in plastic and a coating to protect the paint etc while in transit. They require a lot of grooming to make the showroom presentable.

but isnt that just part of the cost of selling the car? not an extra, as they have to do it to every new car.

mattwnz

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#1292578 27-Apr-2015 21:21

MikeB4:
mattwnz:
tdgeek: Not a rort, just the cost over and above that quoted in the link above. Its just like Interest Free, then ad on booking fee, admin feee, etc, etc

Yeah, but would you expect a brand new car would need grooming as part of onroad costs? This isn't an exdemo, but new out of their warehouse.
The way I see it, it is another opportunity to make a bit more of a margin on the sale. I have never paid onroad cost directly myself either, and it would have just come out of their margin. The other annoying thing they did was remove the GST, and then add it back on, to make it look like it was cheaper initially, but as it was a personal purchase, they really should haven't have done this IMO.
Admin fees, etc, are costs that also should be coming out of their margin, as they are a normal cost of sale, they shouldn' tbe getting added on. This is paying cash, not via a loan, you would only expect those costs when getting a loan.

New cars come in built up they are covered in plastic and a coating to protect the paint etc while in transit. They require a lot of grooming to make the showroom presentable.

That is certainly a good point, and I have seen cars as they arrive in NZ, and yes they do have pull off plastic in the interior that you need to pull off, similar to what you get on a new TV or iphone on the shiny pieces of plastic.

Although wouldn't you expect that comes out of the margin on the sale price? At least that is what happens with most products that get sold to consumers. eg a retailer may buy things in bulk, and then repackage them to sell retail, but they don't charge a separate fee on top. I mean they wouldn't be able to sell it in the condition if it still in what is essetially a raw condition? Infact I would doubt the manufacturers would allow them too, as it wouldn't be a great look for the brand.

mattwnz

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#1292580 27-Apr-2015 21:23

Jase2985:
MikeB4: New cars come in built up they are covered in plastic and a coating to protect the paint etc while in transit. They require a lot of grooming to make the showroom presentable.

but isnt that just part of the cost of selling the car? not an extra, as they have to do it to every new car.

Exactly my point. Otherwise what does the margin they make actually cover, as cars are a commodity. The sales agents aren't actually adding any extra value to the car when they sell it. From what I can see, it is just another way to make an extra bit of margin on the sale.

MikeB4

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#1292581 27-Apr-2015 21:23

Jase2985:
MikeB4: New cars come in built up they are covered in plastic and a coating to protect the paint etc while in transit. They require a lot of grooming to make the showroom presentable.

but isnt that just part of the cost of selling the car? not an extra, as they have to do it to every new car.

Yep and why I don't pay it

Here is a crazy notion, lets give peace a chance.

alasta

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#1292587 27-Apr-2015 21:39

I had exactly the same experience when I bought my current car. In hindsight I should have told them that I would prefer to remove the protective plastic myself rather than pay several hundred dollars for someone else to do it for me.

Next time I will go in armed with exact figures for registration+WOF+tank of fuel and will pay only that.

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mattwnz

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#1292639 27-Apr-2015 22:18

They also told me that they got another quote for the same car from another dealer, and the onroad cost were $650, which seems more reasonable. Exactly the same car in all respects and a cash sale.

mattwnz

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#1292640 27-Apr-2015 22:19

alasta: I had exactly the same experience when I bought my current car. In hindsight I should have told them that I would prefer to remove the protective plastic myself rather than pay several hundred dollars for someone else to do it for me.

Next time I will go in armed with exact figures for registration+WOF+tank of fuel and will pay only that.

Unfortunately many consumers just take the dealers word for it that those are the true onroad costs

gehenna

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#1292642 27-Apr-2015 22:24

Just bought a new car the other day and on road costs were negotiated away as part of the deal. I would imagine all dealers are in a position to waive them, you only need to ask. But yes a new car needs grooming - once it comes off the boat it goes into storage for a while, then there's truck transit. Mine is coming down from Auckland so the exterior will need grooming, and the interior has been in storage for a while with dust collecting, and there's plastic wrap on everything which will leave marks when removed.

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#1292643 27-Apr-2015 22:28

Not sure if you have a price for the grooming to compare, but dealers typically get charged between $100 to $150 dollars per car, rather than $300 to $600 per car that a normal person off of the street would be charged.

If they are charging several hundred for the grooming, just tell them not to bother. Do it yourself, or not at all. They don't arrive filthy at all.

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