Originally Posted by jsedlak
How can they be absorbing something if they are still selling for over invoice? Anything over cost would mean that they aren't absorbing any of the price, since it isn't costing them anything... or am I missing something?
I doubt you can apply the incentive to the price at this point. The CA has a bottom line to work with and it probably doesn't really matter to them how they hit it. The incentives allow them to ask for a higher price knowing they can throw in the incentive if you start to walk. It would be stupid of a salesperson to negotiate to their limit and then let you throw in the incentive. I can't imagine many make this mistake... if they do, they'll backpedal and say that the price includes the incentive.
Edit: My take from "absorbing cost" implies loss from their normal profit, guessing 1K off MSRP?
Consider that this is my first time ever buying a car, let alone a custom ordered one, so it's pretty clear I made some mistakes...I'm pretty sure I can't do anything at this point to lower the price.
I guess what I seem to hear around these forums is "dealer negotiated a price of ____, then I was able to use incentive x,y,z to lower it to ___". From that statement, it seems like the dealers profit margin is not affected by the incentives, ie that money comes off of BMWUSA's profit? If this was not the case, why would the dealer want to sell one of their allocations for such a relative loss, ie could sell default built vehicle for ~MSRP. I'm assuming that the lack of disposable income these days is forcing dealers to price more aggressively to meet selling quota?
My overall question is: is this CA pulling a fast one on me and should I not trust him for future business dealings? He already tried to slide one by when I re-optioned and the price went up $700 for an additional $500 option, using some crap about a "300 MI anti theft tax"
. I pointed it out, and he said the manager made a mistake, I'll give him the benefit of the doubt...