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      11-16-2012, 02:15 PM   #1
drob23
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Pricing Question

I negotiated over the phone with a CA from Ann Arbor Michigan who agreed to sell at 1k over invoice.

I'm using the college graduate program along with the holiday incentives. My question is this...the holiday incentive came out after our agreement, so I asked whether this could be applied on top of our agreement, his answer:

"When we spoke of price a few days ago I agreed I would sell you the 335 at 1,000 over invoice. We are absorbing all rebates and discounting the vehicle to meet that price."

My question is: does the dealer actually absorb a holiday/college grad incentives? I'd think that was between BMWUSA and myself. I know this is sort of money grubbing but I'd like to at least know the best negotiation strategy/rules for future purchases. The car has already gone into production and I figure I've lost most negotiating leverage considering I signed a purchase agreement and made a down payment. I will probably attempt to get better financing from them because the 3.8%/0 down rate I got doesn't seem great and inline with college grad - 3.3%/0 down advertised rate (if it matters my credit is great and income is good enough).

Thanks!
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      11-16-2012, 02:39 PM   #2
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dealer is trying to take more money from you...
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      11-16-2012, 02:46 PM   #3
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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.
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      11-16-2012, 02:58 PM   #4
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Originally Posted by jsedlak View Post
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...

Thanks all!
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      11-16-2012, 03:08 PM   #5
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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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      11-16-2012, 03:19 PM   #6
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Has anyone successfully negotiated a near-invoice price, and then be allowed to apply incentives?
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      11-16-2012, 03:23 PM   #7
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Has anyone successfully negotiated a near-invoice price, and then be allowed to apply incentives?
yes
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      11-16-2012, 03:24 PM   #8
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Originally Posted by SamS View Post
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.
OK, thanks, this is what my intuition said. I did this all in haste since I needed the car by new years. In the meantime, I won't let this take away from the excitement of my new 335. I'll make a note to never work with this dealer again regarding a new car/parts/extended warranty etc.
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      11-16-2012, 03:26 PM   #9
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Has anyone successfully negotiated a near-invoice price, and then be allowed to apply incentives?
Yes, absolutely.
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      11-16-2012, 03:28 PM   #10
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OK, thanks, this is what my intuition said. I did this all in haste since I needed the car by new years. In the meantime, I won't let this take away from the excitement of my new 335. I'll make a note to never work with this dealer again regarding a new car/parts/extended warranty etc.
If your car status is "Production Begins", you're not getting it before New Years.
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      11-16-2012, 03:28 PM   #11
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Originally Posted by jsedlak View Post
Has anyone successfully negotiated a near-invoice price, and then be allowed to apply incentives?
I'm guessing this would also depend on other factors such as allocation availability/model demand, flexibility in delivery timeline, time of the month/year, how far you're willing to travel for pickup etc...

Ultimately, I suppose you just have to do this by phone and hope the CA is more interested in sales quantity rather than quality.
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      11-16-2012, 03:32 PM   #12
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Originally Posted by SamS View Post
If your car status is "Production Begins", you're not getting it before New Years.
I know this is somewhat best case, but the car is scheduled for completion on 11/22 and I'm assuming the car would unload at one of the NE VPC's for delivery in Michigan, so I think it's "possible" - I'm expecting worst case to be end of first week January.

I start a new job in January and will need to borrow the GF family's Tahoe with 200k miles, so I'm not screwed but it will suck.
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      11-16-2012, 03:35 PM   #13
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Quote:
Originally Posted by drob23 View Post
I know this is somewhat best case, but the car is scheduled for completion on 11/22 and I'm assuming the car would unload at one of the NE VPC's for delivery in Michigan, so I think it's "possible" - I'm expecting worst case to be end of first week January.

I start a new job in January and will need to borrow the GF family's Tahoe with 200k miles, so I'm not screwed but it will suck.
My car is schedule for completion 11/21. It's a solid 4 week trip from the factory, on the boat, and to a US port. Then another week or so for customs. Remember we've got some holidays in there. Maybe another week to your dealer. Mid-January might be a better expectation. But at least you have a ride in the meantime!
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      11-16-2012, 03:40 PM   #14
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Not to hijack as this is a similar question but every dealer around Atlanta is trying to charge me a doc fee plus a dealer fee. I'd love to tell them to pound sand but it's pretty consistent. Were you guys charged these types of fees? If so, did you negotiate them off?
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      11-16-2012, 03:52 PM   #15
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Not to hijack as this is a similar question but every dealer around Atlanta is trying to charge me a doc fee plus a dealer fee. I'd love to tell them to pound sand but it's pretty consistent. Were you guys charged these types of fees? If so, did you negotiate them off?
Not that I'm the best source of bargain info but I did pay a doc fees (in "other taxable charges") on top of the sale price. My understanding is this fee is capped depending on the state, which can range from nearly 1K to $90 in CA. It was $190 in MI...

The dealer fee's include training and advertisement fee's, but should be included in the "negotiated price". Check out bmwconfig.com for invoice pricing and the basics of dealer add-on.
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      11-16-2012, 03:56 PM   #16
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My car is schedule for completion 11/21. It's a solid 4 week trip from the factory, on the boat, and to a US port. Then another week or so for customs. Remember we've got some holidays in there. Maybe another week to your dealer. Mid-January might be a better expectation. But at least you have a ride in the meantime!
Hmm...what's the best source for this kind of info? I'm assuming there's always some fluctuation in this, and I guess I'm hoping for best case

We'll see, really not hoping I have to drive that Tahoe much, considering the drivers window is broken and slowly falls down as you drive, which is an awesome "auto cooling" feature to have in the winter
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      11-16-2012, 04:08 PM   #17
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Hmm...what's the best source for this kind of info? I'm assuming there's always some fluctuation in this, and I guess I'm hoping for best case

We'll see, really not hoping I have to drive that Tahoe much, considering the drivers window is broken and slowly falls down as you drive, which is an awesome "auto cooling" feature to have in the winter
There is no best or official source. I'm just going by experience, as I ordered a new M3 last year, so I'm pretty familiar with the process. Others can confirm.

Could be worse... some folks pay for a rental while waiting for their car to ship over!
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      11-16-2012, 04:10 PM   #18
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Not to hijack as this is a similar question but every dealer around Atlanta is trying to charge me a doc fee plus a dealer fee. I'd love to tell them to pound sand but it's pretty consistent. Were you guys charged these types of fees? If so, did you negotiate them off?
PM sent.
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      11-16-2012, 04:29 PM   #19
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There is no best or official source. I'm just going by experience, as I ordered a new M3 last year, so I'm pretty familiar with the process. Others can confirm.

Could be worse... some folks pay for a rental while waiting for their car to ship over!
Hehe, sounds like you know what you're talking about! According to this blog the worst was in between finishing production and getting on the boat. I can tell this wait going to be brutal...especially because I don't have anything better to do.

If you don't mind me asking, why'd you sell the M3 so soon?
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      11-16-2012, 04:41 PM   #20
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Hehe, sounds like you know what you're talking about! According to this blog the worst was in between finishing production and getting on the boat. I can tell this wait going to be brutal...especially because I don't have anything better to do.
Yep, the wait is no fun Just count on Mid-January, and be pleasantly surprised if it shows up sooner.

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If you don't mind me asking, why'd you sell the M3 so soon?
The M3 wasn't exactly a good commuter car, and I had another kid since I bought it. In other words, it's not the best family hauler and gets terrible mpg. I have another car, but that meant the M3 rarely saw use. Now, it's time for an ActiveHybrid 3, that should get 30mpg+ and fit two car seats nicely And more torque than the M3
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      11-16-2012, 04:52 PM   #21
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Yep, the wait is no fun Just count on Mid-January, and be pleasantly surprised if it shows up sooner.



The M3 wasn't exactly a good commuter car, and I had another kid since I bought it. In other words, it's not the best family hauler and gets terrible mpg. I have another car, but that meant the M3 rarely saw use. Now, it's time for an ActiveHybrid 3, that should get 30mpg+ and fit two car seats nicely And more torque than the M3
Well congrats on the burgeoning family and the "more practical" ride. I have some friends who were forced down the minivan path by their better halves...so it could always be worse than a 350HP sports sedan
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      11-16-2012, 05:03 PM   #22
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Well congrats on the burgeoning family and the "more practical" ride. I have some friends who were forced down the minivan path by their better halves...so it could always be worse than a 350HP sports sedan
I'm fortunate to have a very understanding wife
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