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Do you own a diesel powered BMW? Maybe a 335d or a BMW x35d? Come and talk about what makes your car great!

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  #1  
Old 11-10-2011, 01:50 PM
Black 328xi Black 328xi is offline
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Should I trade?

Recently had my 328xi at the dealer for a laundry list of service items. I was fortunate enough to be given a "d" as a loaner. Needless to say the car was awesome. I spoke with my CA and asked her to work up some numbers to trade for the service loaner which they just listed for sale. Here are the particulars:

My trade:
2008 CPO 328xi sdn, Premium, Cold Weather, Nav, Auto 42,000 miles (just off warranty, start CPO) - KBB trade in value- $22,000

"New"
2011 335d Premium, Cold Weather, Nav, 7k miles, service loaner

I only spoke briefly with my CA about the deal. Bottom line was my car plus $23,000 (out the door price, t/t and bs included).

What's your thoughts on the deal? A few of my reservations about the deal are losing the AWD for the winter which we are going into and I don't drive very many miles per year (should I even bother going with a "d")

Thanks
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  #2  
Old 11-10-2011, 02:00 PM
cssnms cssnms is offline
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Only if you have money to throw away.
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  #3  
Old 11-10-2011, 03:03 PM
TeddyBGame TeddyBGame is offline
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make sure the $3500 eco credit is factored in.
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Old 11-10-2011, 03:15 PM
SteveGu SteveGu is offline
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for perspective,

This strikes me as a *not bad* price...if the car was new.

So, perhaps deduct the appropriate depreciation and loss of 7000 miles warranty and use.

Also and FWIW, the car you describe maxes out at KBB with a tradin value of about $39K, so I think they are at least 6K too high.
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Old 11-10-2011, 03:32 PM
Matt_UKTX Matt_UKTX is offline
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Quote:
Originally Posted by Black 328xi View Post
Recently had my 328xi at the dealer for a laundry list of service items. I was fortunate enough to be given a "d" as a loaner. Needless to say the car was awesome. I spoke with my CA and asked her to work up some numbers to trade for the service loaner which they just listed for sale. Here are the particulars:

My trade:
2008 CPO 328xi sdn, Premium, Cold Weather, Nav, Auto 42,000 miles (just off warranty, start CPO) - KBB trade in value- $22,000

"New"
2011 335d Premium, Cold Weather, Nav, 7k miles, service loaner

I only spoke briefly with my CA about the deal. Bottom line was my car plus $23,000 (out the door price, t/t and bs included).

What's your thoughts on the deal? A few of my reservations about the deal are losing the AWD for the winter which we are going into and I don't drive very many miles per year (should I even bother going with a "d")

Thanks
You are getting raped. Please do the following:

- Get the invoice price of a new 335d on www.bmwconfig.com.
- Add $500 to that price for dealer profit
- Subtract all current incentives (eco credit, November drive credit, owner loyalty credit, etc.)
This will give you your target price on a NEW car.

Now subtract $0.20c per mile for depreciation...

This is what you should pay for the car.
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  #6  
Old 11-10-2011, 03:38 PM
TeddyBGame TeddyBGame is offline
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Quote:
Originally Posted by Matt_UKTX View Post
You are getting raped. Please do the following:

Now subtract $0.20c per mile for depreciation...
I would double that depreciation figure. $1400 for a service loaner seems very low.
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  #7  
Old 11-10-2011, 03:39 PM
Dino-V12 Dino-V12 is offline
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Thats Nice car wow
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  #8  
Old 11-10-2011, 03:52 PM
Matt_UKTX Matt_UKTX is offline
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Quote:
Originally Posted by TeddyBGame View Post
I would double that depreciation figure. $1400 for a service loaner seems very low.
Yes, you're right... Not sure what I was thinking. Use the IRS mileage rate. It's as good as any
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  #9  
Old 11-10-2011, 04:00 PM
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TXPearl TXPearl is online now
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7000 miles is about half a year's use. I'd say a new car depreciates about 20% the first year, so about half that, or 10% seems like a reasonable discount for this vehicle.
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Old 11-10-2011, 04:21 PM
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Just keep in mind that fuel savings based on MPG improvements will only be in the $100's per year, at best. So if you're considering the d based on torque, drivability and the fact that it's a newer car, then that's one thing and certainly an attractive option (as you've found out ). But based on economy, it's probably not the right move. If you're able to get away with all season tires on your xi now, you'll also need to factor in the cost of a set of snow tires (and probably wheels).

Graham
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Old 11-10-2011, 06:52 PM
Black 328xi Black 328xi is offline
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All. Thank you for the responses. Gave me some good information to look into to get a better deal. Dealer also has two more that are brand new.
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  #12  
Old 11-11-2011, 05:56 AM
cssnms cssnms is offline
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If you want a better deal, sell your car yourself. DO NOT TRADE IT IN.
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  #13  
Old 11-11-2011, 06:37 AM
SteveGu SteveGu is offline
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Quote:
Originally Posted by cssnms View Post
If you want a better deal, sell your car yourself. DO NOT TRADE IT IN.
True this is, except check each state law. in Ohio, the trade in value is subtracted from the sale price for sales tax calculation, and this price advantage accrues to the benefit of doing business with the dealer. For example, in this case (if it were in Ohio) a $23,000 tradein would save over $1500 in tax, a not insignificant part of any expected gain from a private sale, with obviously a lot less hassle or risk.
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  #14  
Old 11-11-2011, 07:05 AM
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Quote:
Originally Posted by SteveGu View Post
True this is, except check each state law. in Ohio, the trade in value is subtracted from the sale price for sales tax calculation, and this price advantage accrues to the benefit of doing business with the dealer. For example, in this case (if it were in Ohio) a $23,000 tradein would save over $1500 in tax, a not insignificant part of any expected gain from a private sale, with obviously a lot less hassle or risk.
+1 ! When I did a trade-in recently, it didn't make sense to sell it on my own given a reasonable trade value, significant tax savings and the guarantee that I wouldn't be making two car payments concurrently.
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Old 11-11-2011, 07:30 AM
cssnms cssnms is offline
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Make no mistake, trade-in value will be just that, trade-in value, which more often than not is in the range of 10-15+% below what one could sell their car for to a private party. That % gain in sale price will more than off-set any tax benefit and depending on how much the seller owes the bank should have money left over to apply to a downpayment on the new vehicle.

If the dealer is giving you more than trade-in it's only because you are getting screwed on the sale price of the new car. The best thing anyone can do that is even considering trading in their car is to negotiate a sale price before you inform the dealer you have a trade. Start the negotiation at dealer invoice NOT MSRP and go from there. Once you agree to a sale price bring in the trade and see how good of deal they offer you.
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Old 11-11-2011, 08:00 AM
SteveGu SteveGu is offline
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Quote:
Originally Posted by cssnms View Post
Make no mistake, trade-in value will be just that, trade-in value, which more often than not is in the range of 10-15+% below what one could sell their car for to a private party. That % gain in sale price will more than off-set any tax benefit and depending on how much the seller owes the bank should have money left over to apply to a downpayment on the new vehicle.

If the dealer is giving you more than trade-in it's only because you are getting screwed on the sale price of the new car. The best thing anyone can do that is even considering trading in their car is to negotiate a sale price before you inform the dealer you have a trade. Start the negotiation at dealer invoice NOT MSRP and go from there. Once you agree to a sale price bring in the trade and see how good of deal they offer you.
This is good advice, too, although I might note that in conversation with dealers the last couple of years (& YMMV, of course), the common approach seems to be that however you negotiate the purchase price, they will offer the same price with or without a tradein, excepting very rare instances (such as a highly-desirable model of the brand they represent). Almost exclusively the bottom line on tradedin cars is the auction value, and the same amount will be offered by just about any dealer of any make.
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  #17  
Old 11-11-2011, 08:24 AM
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My own example:

Traded in 2010 335d: received $35,500 towards purchase of 2012 328xiT.

MD 6% tax savings: $2100

I did the trade in early September and the car then appeared on the dealer's lot for $39,900. Some reconditioning was needed: small divot on rear bumper and replacement front windshield (chipped).

Edmunds TMV "Clean condition" is:

Trade-in $35,508
Private Party Sale $37,956
Dealer Retail $40,277

Those figures are almost to the dollar the same as my trade in credit and the current dealer retail price. So assuming I had instead tried to sell the car myself, I would have asked about $38,000. Lets also assume that eventually I sell the car for my asking price of $38,000 (a big assumption). The net increase to me is only $400. If I had paid to advertise the car, took off work to show the car, and/or paid insurance and possibly car payments for any length of time I would be quickly upside down compared to taking the dealer's trade in offer. And if I were to accept even a slightly lower offer, then I would have done worse then taking the trade offer.

Every situation is different of course, but this was a real eye-opener for me, as until now I've ALWAYS sold my cars myself after laughing at the dealer's trade offer. The used car market is a lot different now then it's been in the past, even at the (relatively) higher end of the scale.

Graham
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Old 11-11-2011, 08:31 AM
cssnms cssnms is offline
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Quote:
Originally Posted by SteveGu View Post
This is good advice, too, although I might note that in conversation with dealers the last couple of years (& YMMV, of course), the common approach seems to be that however you negotiate the purchase price, they will offer the same price with or without a tradein, excepting very rare instances (such as a highly-desirable model of the brand they represent). Almost exclusively the bottom line on tradedin cars is the auction value, and the same amount will be offered by just about any dealer of any make.
Why would a dealer tell you otherwise? That's what they want you to believe. Dealers LOVE trade-ins because more often than not they make more money on the new car sale as well as a handsome profit on the trade-in.
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Old 11-11-2011, 08:38 AM
SteveGu SteveGu is offline
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Originally Posted by cssnms View Post
Why would a dealer tell you otherwise? That's what they want you to believe. Dealers LOVE trade-ins because more often than not they make more money on the new car sale as well as a handsome profit on the trade-in.
You're right of course, but in this case this was the conversation after I did exactly as you suggested. I negotiated a cash price, then presented my tradein. Plainly they told me that from their point of view (new-car salesman), they didn't care whether I traded in a car or not, and that the net difference would be identical either way. Perhaps the used car department "cared", but they would offer the same amount even if I wasn't trading in (I did this too, and the dealer had no problem with it, just wrote me a check).

Last edited by SteveGu; 11-11-2011 at 02:51 PM.
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Old 11-11-2011, 12:13 PM
Snipe656 Snipe656 is offline
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When I looked into trading in my car a month or two ago I was offered $28.6k once the tax savings was factored in. At the time I figured I'd been lucky to sell it for $30k. Perhaps I just have a low opinion of my cars worth but at those numbers I sure was not motivated to deal with trying to sell a car over trading in. But I kind of dread selling cars and dealing with everyone trying to talk me down.
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Old 11-11-2011, 11:25 PM
stoked335d stoked335d is offline
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You will always loose on a trade in. Trade-in vs. selling it yourself depends on the current real market value of your car. You could get this by comparing similar cars with year/model/options/mileage privately-listed on autotrader or similar sites. Dealers tell you that you save from sales tax but if you do the math in most cases they keep that savings.

I would stay away from any loaner car. I would actually put it in a category lower than a used car with same mileage with 1 owner. It may have only 7K but if you think about it probably a different person drove that car every week and drove it like they stole it!


Bought my d $500 over invoice minus $4500 diesel credit(2010 credit was $1000 more). Banked another $900 diesel IRS 1040 credit for 2010. If I were in the market for a new car few months earlier I would have deducted sales tax for 2009.


Dealer 1 offered for my 6 year old, accident free, carfax clean, 37K miles 1 owner(myself) WRX $8500 and place where I got my D offered $8900. The car was detailed, compound/wax at a pro shop and inside was shampooed. New tires and complete brake job was done. I sold it myself for $12700 in 10 days and that was on the lower end of the price range of other similar autotrader listings. My savings was over 40% even if you include the sales tax savings from trade-in.

I don't know about dealers by you but these two offered me Manheim auction price. I looked at 1st dealer's used car lot and they had all types of non-BMWs for sale so they were totally lying to me that they could only sell my car at an auction.

Best way to get the best price is to go through overstock.com or edmunds.com or similar site which uses zag.com. You get a price quote from local dealers that participate in this program and most of them honor the price on the new car. Trade-in is a whole new lowball game.
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Old 11-12-2011, 04:54 AM
cssnms cssnms is offline
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Quote:
Originally Posted by SteveGu View Post
You're right of course, but in this case this was the conversation after I did exactly as you suggested. I negotiated a cash price, then presented my tradein. Plainly they told me that from their point of view (new-car salesman), they didn't care whether I traded in a car or not, and that the net difference would be identical either way. Perhaps the used car department "cared", but they would offer the same amount even if I wasn't trading in (I did this too, and the dealer had no problem with it, just wrote me a check).
I would say this is the exception and not the rule.

Think about it, why on earth would a dealer pay a customer anywhere close to private party value on a trade? The dealer needs to make money on that trade when they go to sell it. More often than not it costs the dealer a $1000 or more to sell a used car and that includes commissions, marketing, reconditioning etc. They have more into that car than they do a new car. Dealers make more profit on used cars than they do new cars, which is why they like trades so much. If the dealer is offering to pay you anywhere close to what you think you can sell your car for private party I guarantee you they are making up for it somewhere else.
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Old 11-12-2011, 05:11 AM
SteveGu SteveGu is offline
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(Please do not find me argumentative, I just wanted to pass on my recent experiences, and they are different than I have had in decades past)

Think about it, why on earth would a dealer pay a customer anywhere close to private party value on a trade?

Absolutely I agree. What I found that I thought was of interest is that at least in my area, in shopping 7 dealers over 4 brands (BMW, Honda, VW, Audi), I got the same story from them all, to wit (as you properly point out) the price they will pay for a used car is within a very narrow range, starting at the dead-bottom auction price and increasing slightly for a very nice example of their house brand (which they might resell on their own). Even then the spread is none too impressive. Certainly they know that a private sale will yield more money, but that 6-7% tax savings is there for the(ir) taking, I think they reason.

I am sure there are plenty of dealer/brand/customer combinations where your advice is vital, and I still think it is right approach (I used it!). I just thought it of interest to find out that at least in my market they seem happy to just pocket the tax savings (or as much of it as you let them) and essentially make it two separate deals.
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Old 11-12-2011, 05:29 AM
cssnms cssnms is offline
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Good discussion. This brought back memories when I worked at several dealerships (Nissan, Mercedes, Porcshe, Audi) way back in the day, no I wasn't a salesman . I recall salesmen bragging about how much they cleaned up on this deal or that deal; this was when commissions were calculated not only on volume, but profit. Trade-in deals were always at the forefront of the conversation. With the benefit of a behind the scenes perspective, I could not believe the net price paid for some trades; you would truely be astonished and the customers were non-the-wiser. Of course consumers did not have the same resources at their finger-tips that they do now so they were less educated, but today the tactics are still the same although in many cases less egregious.
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Old 11-12-2011, 05:41 AM
Snipe656 Snipe656 is offline
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I actually never knew about the tax savings on trade ins until about a year ago. Had I known about that then two of my previous cars I'd definitely traded in over selling privately. Both of those cars I ultimately only got a little bit more money for than what I was offered for trade-in value and from CarMax. So with both of those cars if the 6.25% tax savings did in fact exist back then, then I'd been better off trading them in than the route I took which was to do a private party sell. That does not even factor in all the hassle I faced doing a private sell, which was people wanting to try and talk me down left and right which is just something that has always annoyed me to all ends. I am sure dealers make lots of money on trade ins, new cars, service and so on, heck they have a lot of overhead and need to make lots of money. At the end of the day for me though it is about how much can I buy something for or can I sell something for or can I repair something for, if it is close then a convenience factor comes into play for me.
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