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Dealers beating dotcoms on price

The price disparity between the UK and Europe is now negligible as the majority of internet-based importers begin to increase prices and UK dealers become more competitive, according to the latest Car Price Check report.

Analysis is based on the top 14 models (listed below) searched by 80,000 internet car buyers on the Car Price Check web site (www.carpricecheck.com) between November 2000 and March 2001 period.

The report also highlights the wide fluctuations in price on a month-by-month basis between the two sources, with UK sources supplying 46% of the sample cheaper than European retailers in December alone.

However, UK dealers are being advised to be aggressive on pricing from the start of any negotiation.

"From the raw data we have, it is clear that dealers appear to be waiting for consumers to find the best price before they react competitively. Consumers reject most initial dealer quotations if they are not immediately competitive, a sad reflection that some dealers have failed to recognise that they may not get that second chance to make a first impression with a digital car buyer," said Steve Evans, chief executive officer of Car Price Check.

Although there may still be a gap between European & UK sourced list prices at present, it has narrowed considerably. In more than 41% of cases, the savings offered by the importer over the average UK dealer price was so low as to raise a question mark over the benefits of buying from Europe, said Mr Evans.

Some UK sourced cars are now “significantly” cheaper to buy than those from the continent. For example, the Citroen Xsara Picasso showed a £1,971 price difference (or 14.29% saving from the manufacturer list price) between the best UK supplier and the best importer. A similar case is made for the Mercedes E Class and Renault Megane Scenic.

In fact two champions of internet-based importing, Carbusters (operated by the Consumer Associations') and Virgin Cars, have recorded a rise in transaction prices during the period for the majority of models studied, according to Car Price Check.

Carbusters now supplies 72% of the sample at a higher price today than they were in November. There is a similar story for Virgin Cars whose transaction prices have increased for 88% of the models it was able to supply from the sample. Virgin Cars was also more expensive than the average UK dealer price - so not necessarily the lowest price obtainable - on 60% of the models analysed.

This trend compares to the recorded fall in prices for 66% of all the UK dealer sourced models during the November to March period. Similarly, the other major brand-led 'etailer', Direct Line's JamJar operation, recorded a fall in prices for 80% of the models it was able to source.

Oneswoop is shown by the research to be the cheapest supplier with 66% of the models sampled selling at better prices than those from UK dealers.

"The clearest message for the industry has to be that competitive forces and consumer pricing benefits can and do change dramatically. Such movement is happening over a short period of time and should therefore be monitored," said Mr Evans.

"More than ever, manufacturers and franchised dealers need to understand how their product is being priced and sold to the UK consumer. The internet has given the end consumer access to knowledge. Manufacturers and dealers need to make that search for knowledge a part of their marketing mechanism."

The top 14 models in order were: VW Golf, Peugeot 206, Ford Focus, Citroen Xsara Picasso, BMW 3 series, Renault Megane Scenic, Ford Ka, Toyota Yaris, RAV 4, Vauxhall Astra, Audi TT, Seat Leon, Mercedes E Class, Ford Puma.

The full report can be read at www.carpricecheck.com/mi

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