I'm looking to buy a car and finding that the cheapest ones are 5 to 10 hours from Melbourne, is it a fact that cars are cheaper in rural areas or is it just a coincidence for this particular model I'm after?
Are Cars Cheaper in Rural Area?
bn030687 on 16/08/2019 - 18:30
Last edited 16/08/2019 - 20:16 by 2 other users
Last edited 16/08/2019 - 20:16 by 2 other users
Comments
As a rule of thumb, rural cost more.
What about as a rule of toe?
I forgot.
Thank you
My observation is that they start out more expensive, because of limited supply and limited competition (new cars are more expensive in rural), but people tend to drop the price for used cars after a few weeks, because of limited demand.
Depends on the stealership and how desperate they are to sell their cars.
On my last new car I saved close to $2000 by driving an extra 150km to a more rural area than I currently live in.
It all depends on lots of factors.
Rural cars used to be sought after because they were less rusty (from a dry climate) and often manual, especially for V8 falcon/commodores and utes. Downside is they also often have more kms and stone chips due to distance and poorer road quality. More kms may not be bad for the engine as they were generally Lo her trips, but the suspension also gets more of a workout on rural highways.
New cars: Costs more, dealership vs stealership
Used cars: Costs less, less buyers
Old cars: Basically even, cheap as chips
New cars shouldn't cost more from a rural dealer, it's only if they dig their heels in because of location
Why "shouldn't" they cost more? When there's literally no competition for the next 500km, you would think they naturally charge more than when there are 5 dealerships within an hour of each other.
They shouldn't cost more because manufacturers cover transport costs to get their cars there. So their cost price is the same as a city dealer.
As I said it's more that they might not feel the need to negotiate.
@spackbace: New Cars cost more because less options to buy the car. Sure, you could haggle and get a cheaper price in the city, but then you have to drive it back and most rural people would just be fine paying extra for the convenience. Here you could attribute it to (more demand, less supply) "Seller's Market".
Used Cars are ones that aren't Shit Boxes, and do +90% of what a New Car does. Since there's less people, there's usually less buyers. And so you have an over-abundance and it becomes a "Buyer's Market" (less demand, more supply).
As for Old Cars, now I'm talking about those actual Shit Boxes, you know those old Holdens, Fords, and Hyundai Excels. These suck on the market regardless of where you are. There's very little demand, and heaps of supply anywhere. Sometimes the rego would cost you almost $1,000 and people are only willing to pay you $1,000…. basically cheap, free, or even at-cost!!
New Cars cost more because less options to buy the car.
We'll agree to disagree. The neg vote was pointless tho.
As a new car salesperson I regularly get calls from country buyers to keep their local dealer honest. Very rarely do they actually buy from a city dealer.
So yes, my comments are brought about by actual case examples, not just guesses.
@spackbace: As an economist, what you're saying is just not true. I spent most of my professional career investigating monopolies and potentially anticompetitive merger and acquisition transactions. Prices are set by market forces, not by costs. That's the whole rationale behind why we should regulate monopolies. Just as a basic example, Cournot competition is something regularly taught to economics students pretty early on in their degrees. You can easily show that as the number of competitors increase, the price approaches the perfectly competitive market price.
That's why I'm saying it's pretty reasonable to assume that when there's less competition in the local radius of a dealership, they charge higher prices. It's not just car dealerships, plenty of other examples of similar behaviour.
@p1 ama: The thing is, their prices are set by the manufacturer. If a Hilux is $22,990 in the city, it's $22,990 in the country.
Note that I've only been talking new cars. I've never mentioned anything else here.
Negotiable amounts may differ, though as I've stated, vast majority of country customers who shop prices just end up buying locally.
That's why I'm saying it's pretty reasonable to assume
sigh
Here I am talking real-world situations that I've personally witnessed, and you're assuming? Gtfo. Find some actual proof or evidence or kindly stfu. I can assume you never had anything to do with an economist except maybe bumping into 1 at a train station, doesn't make it fact.The thing is, their prices are set by the manufacturer. If a Hilux is $22,990 in the city, it's $22,990 in the country.
Come on, as a car salesman, you know that knowledgeable buyers don't pay sticker price for most common cars. So this is a moot point. The sticker price is irrelevant, we're talking about what the price the cars actually sold at.
Negotiable amounts may differ, though as I've stated, vast majority of country customers who shop prices just end up buying locally.
This is what I'm talking about. When you're a city dealer, you're competing against all the dealers in your area. You have an incentive to do a better price because if you don't, the customer goes to the dealer down the road. If you're the only dealer within 500km, you have much less of an incentive to offer a competitive price, because you know the customer will probably buy from you anyway because they can't be bothered going all the way to a city dealer (which is what you're saying).
Here I am talking real-world situations that I've personally witnessed, and you're assuming? Gtfo. Find some actual proof or evidence or kindly stfu.
Man, I don't know who needs to come up with "actual proof or evidence", you with your anecdotes or me with the backing of economic theory. If we didn't need to enforce regulations on firms that operate in monopolistic markets then you should be petitioning your local MP to axe the ACCC and whilst you're at it, overhaul the entirety of the past century of economic models and textbooks.
I think you're a reasonable guy, but unless you can come up with the average sale price of a particular car in the city vs. in the country, then it's not "actual proof or evidence".
Btw, I realise you're being negged - just to be clear, it's not me.
@p1 ama: I'll say again, to you this time, you can feel free to agree to disagree.
I know my customers.
Supply and demand. Some will be cheaper because they're less attractive to rural buyers while city buyers won't bother. But you won't get a discount on a new ute or something, especially when there's one dealership that serves the whole region. That said, every loaded farmer I know has a decked out Hilux or Ranger.
My Pop usually goes out of his way to buy cars from country dealers even though he lives in what would now be known as metro but he’s lived his whole life as a country man, so I think it’s a factor of liking the feeling of dealing with a country based dealership, for whatever that’s worth, as well as being fairly set in his ways, but he’s fairly frugal about this sort of thing so?
I’d have thought it would just come down to what cars are around and what people are buying. As Spackbace said the dealers get their costs of transport for new cars covered by the manufacturer anyway, so ideally it should just come down to market factors and competition etc.
Correct answer is.
YES and NO
Oh, thanks. That cleared it up.
When I looked, 4wds were never bargains in the country. Buy in the city where there's competition and economy of scale.
Mining auctions seemed a possible bargain source for country type vehicles.
Mining vehicles will probably be well serviced, but often given a very hard life with lots of km and used in corrosive environments.
If we are talking about buying a new car, my guess would be, yes it's cheaper.
A rural dealership would cost less to own and run. Staffing costs would be less too. So while demand might be less, this gives the dealership an incentive to make a sale at all costs. However most people would prefer a rural dealer because they would give better customer service. Price is not always the deciding factor.
I know someone who bought a jaguar from a rural town cheap.
Was it a cat or a car? I'll let you decide.
EDIT: Haha, you fixed the title quickly :)