I think you should find another dealer.
BMW incentives are applied "after" your best-negotiated-price.
I have noticed that some things are designated on the bill of sale as a rebate (i.e. Holiday Cash + Loyalty credit) vs. others (Eco-credit, USAA credit) come off the "Delivered Price of Unit". I think this just means the dealer has to submit to get their money back one way, vs. another.
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