How to Save Money Doing Euro Delivery

I thought I would post this revised document here for prospective buyers.

--gary


HOW TO SAVE MONEY ON EUROPEAN DELIVERY
version 1.4

By Gary Ray

There are two ways to save money by buying a BMW through the European Delivery program: 1) the price is lower, and 2) you have better leverage to negotiate the price.


1. THE PRICE IS LOWER
BMW has a lower invoice base price for European Delivery cars. You can usually find the invoice pricing on eurobuyers.com, kbb.com and other car buying sites. The invoice price is the price a dealer claims is the base price of the car before they take a profit. With other manufacturers, you can compute a wholesale cost, which is the invoice price, minus holdbacks and dealer rebates. BMW currently does not give its dealers incentives, so for our purposes the invoice price is what we're working with.

Another price saver is that Euro Delivery BMWs don't incur the MACO advertising fee, training fees, system fees, or other dealer tacked-on fees, except for destination and handling of your car.

BMW 3, 5, and 7-series may be picked up via Euro-delivery, although M cars are not subject to discount pricing.

At the time of this writing (December, 2001), the difference between invoice cost on a Euro Delivery and "regular allotment" BMW 330i is $2325 on the base price. Some will look at this number, compute the cost of a trip to Europe and time off from work, and decide that a Euro Delivery BMW is not worth the money -- but we're just getting started. With a Euro Delivery BMW, you have more room to negotiate for a better price.


2. YOU HAVE BETTER LEVERAGE TO NEGOTIATE THE PRICE
THE REGULAR "ALLOTMENT" PROCESS

Here's how BMW sales works: Each year, the dealer is given an allotment of cars. This means, a dealer may be able to order 500 cars from BMW. The dealer will order some of these cars with a certain configuration to sell to walk-in customers. Most cars, BMW dealers claim, are special order cars, requested by customers. What these cars have in common is that they are all out of the dealer's annual allotment. Supply and demand is hard at work in this scenario, and your power to negotiate is pretty weak. Why should the dealer sell you a car at $1500 over invoice when the next guy walking in off the street is willing to pay full MSRP?

Since BMW's are hot selling cars, someone is likely to come in fairly soon and make that full sticker offer (and possibly more!) on the dealer's allotment car. Supply and demand dictates what the dealer can get for this car, and because he's only got so many cars to sell that year, the dealership does their best to maximize profits. BMW salespeople don't negotiate on BMW's like you would, say a widely available, mass produced Ford. Even special order cars are effected by this supply and demand process. The allotment space is sitting out there in virtual space with an expected level of profit, and if you won't pay the asking price, someone else will.

This supply and demand dynamic is also how dealers can get "regional markups" of tens of thousands of dollars on performance BMW's, like the M3, M5 and Z8, or even the bar bones 325i sitting on the lot. If someone will pay the markup in a reasonable amount of time, the dealership will try to get it. European Delivery cars bypass this economic process. Don't blame the dealer for the markup, blame the idiot buyer willing to boost the price for all of us. Well, ok, blame the dealer.

BYPASSING THE ALLOTMENT PROCESS WITH EUROPEAN DELIVERY

European Delivery cars do not come out of the dealer allotment. Instead BMW ED cars come directly from the factory. The dealer has no expectation of profit from a European Delivery car, since they have no way of knowing how many they'll be getting over the year. Dealers have different ways of dealing with his unknown quantity.

Some dealers aggressively try to sell ED cars because it's pure profit. The ED car doesn't come out of their allotment, so it's icing on their cake -- pure profit for simply filling out some forms. Other dealers don't understand the ED process or don't want to be bothered with their already lucrative profit from allotted cars. They probably think they will make less money on a European Delivery car, because their friend, supply and demand, is asleep at the wheel. A third group of dealers tries to bypass the customer supply & demand advantage with European Delivery by simply not negotiating at all on European Delivery cars, possibly feeling that if enough people hear about this, they won't pay their inflated prices for standard allotment cars. In areas with few dealerships, these BMW dealers have a stranglehold on customers, unless the customer is willing to travel outside the area for their car purchase.

In any case, there are BIG savings beyond the invoice reduction on a European Delivery car when you find a dealer familiar with the European Delivery process who is also willing to negotiate. The savings are large enough that it wouldn't be unreasonable to purchase a European Delivery BMW from another state.

What kind of savings are we talking about? If you add up your costs for the car: base invoice cost, invoice cost of options, and delivery, you can often negotiate with the dealer for as little as $1000-1500 over invoice in profit. I'm not talking about $1500 under the MSRP, I'm talking about a small profit for the dealer over invoice. Let's look at a real world example to see the price savings.


EXAMPLE PRICING OF A EUROPEAN DELIVERY CAR vs. REGULAR ALLOTMENT CAR
Let's look at a regular BMW 330i with a sport and premium package (December, 2001 prices). You're paying:

REGULAR ALLOTMENT BMW
$39,185 (including destination & Handling)
BASE: $34,635
MACO: $300 (advertising fee)
TRAINING & SYSTEMS FEE: $150 (more bogus fees)
SP: $1200
PP: $2900


EUROPEAN DELIVERY BASE PRICE (not negotiating)
$36,410 ($2325 base invoice discount) (including destination & Handling)
Computed by discounting the base invoice cost only.


EUROPEAN DELIVERY NEGOTIATED PRICE
$34,640 (savings of $1770 over ED base and $4545 off allotment car)($1500 over invoice)
(including destination & Handling)
BASE: $29,410 (including destination & Handling)
SP: $1090 (invoice cost)
PP: $2640 (invoice cost)
Dealer Profit: $1500

So if you understand the allotment process and can negotiate on the already lowered European Delivery invoice costs, you can save over $4500 on your new car! On top of that, if you live in a state with sales tax, you've just saved about $500 in taxes!


BUT I CAN'T NEGOTIATE! I DON'T KNOW HOW! IT SCARES ME!
Use the Rizzo Method. Create a fax with a copy of the euro invoice price sheet (showing you know what's going on) and your pricing worked out in a spreadsheet with the dealer profit clearly marked ($1500 is a good number). Fax it around to dealers in your area, telling them to fax back their acceptance. Do not include a voice telephone number and do not offer to negotiate. This is a take it or leave it deal for them to quickly and easily make $1500 for filling out a few forms (or whatever you offer them). If your local dealer won't negotiate, broaden your circle. With over $4500 on the line in the example above, and plans to fly all the way to Europe to get your car, are you really THAT reluctant to travel a bit in your own country to pick up your bimmer?

In November I got the car listed in the example above from a local dealer for $1000 over invoice. I would have been happy to fly several states over for such a deal, but I got lucky with the closest dealer to my home.


WHAT ABOUT GOING TO EUROPE?
You, personally, must show up to take delivery of the car in Munich with your passport -- no exceptions. You can always show up, drive the car across town to the Munich drop-off location and fly out the same day. You can even pay a small fee (about $50) and have them do this cross-town drop-off for you, but you absolutely MUST go to Munich to at least fill out the paperwork and take delivery. A round trip ticket to Munich is currently about $550 and can go up depending on the season. Munich is a large town, so there's a range of accommodations from about $60-150 per night.

A Euro Delivery car is probably best savored on the Autobahn during an amazing vacation, but hey, some people don't like to travel for whatever reason. Ideally you'll combine your European Delivery with a European vacation.


WHAT ARE THE HIDDEN COSTS? EMISSIONS? SHIPPING? INSURANCE? WARRANTY ISSUES?
European Delivery cars are 100% US specification cars. There are no fees, smog checks (that you pay for), instrument cluster switches or other expenses that you would have with a "gray market" vehicle. The car is 100% US spec, no exceptions. No one will ever hassle you about this.

BMW picks up shipping costs and insurance for the car (while in Europe). There are no other fees.

Your regular BMW warranty applies as normal and the car is treated EXACTLY as if you bought it off the lot of your local dealership -- only you've got thousands of extra dollars in your pocket and great memories of driving your car in Europe.

BMW North America won't allow you to add special options to a Euro Delivery car if it will effect the price. For example, a rear sunshade or custom paint would be disallowed. However, an option that doesn't effect the price is allowed if you can get your salesman to go to bat for you. Examples of special options that don't add cost include cloth seats and a different color headliner.

PAYMENT GOTCHA
One issue with European Delivery is that you need to pay for the car 30-days before you take delivery in Europe. So, in my example, I ordered the car in November for January Euro Delivery, paid for the car in December, made my first payment in January and received the car in the US in March. This means there were two months of payments while the car was still in transit. Although you have the car on your trip, you should really figure in the loss of two months payments, or at least the interest. If you're leasing, this might be completely unacceptable.

Enjoy your trip!

I picked up a 323i in Europe two years ago. I am now getting ready to order a 330. Last time I paid Euro. Del. MSRP. Where do you get the dealer invoice on ED? Thanks.

Originally posted by Stevarino
I picked up a 323i in Europe two years ago. I am now getting ready to order a 330. Last time I paid Euro. Del. MSRP. Where do you get the dealer invoice on ED? Thanks.

You can find invoice pricing on eurobuyers.com

--gary

Also, I heard that depending on which state you are registering the car, you may not have to pay the sales tax at all. If you order and pay for your car, fly over to Germany and drive around for a month, have them ship it back to US which can take anywhere from a few weeks to a few months and apparently, some states give you 30 day grace period to register your car in US (in the mean time, drive around in the Euro tag) and voila, you have passed the 90-day threshold for paying the sales tax. i.e. you save a whole bunch of more money than mentioned in the excellent article above.

I read this in an article written by someone on the United Airlines Hemisphere Dec. '04 issue. I am sure the article is available on line somwhere. In that artidle, the author took an ED of Porsche "roadster" (he won't say which model).

I hope this helps someone. And oh by the way, Munich is not a bad place to visit during the Oktoberfest. My wife and I visited last year and had a blast.

hchon

Any idea where to find the link to that article?? Thanks.

Originally Posted by Stevarino

I picked up a 323i in Europe two years ago. I am now getting ready to order a 330. Last time I paid Euro. Del. MSRP. Where do you get the dealer invoice on ED? Thanks.

Look at the sticky's at the top of the ask a dealer main page. It has MSRP and dealer invoice (AKA wholesale). You'll have to scroll down a page or two to get to the wholesale prices. There's also a euro delivery forum accesable from the bimmerfest main page.....

UA in flight magazine web site is www.hemispheresmagazine.com
but the European Delivery article is not listed.
I scanned this into a pdf which can be emailed to anyone who wants it.
About 3.3mb.

Originally Posted by hchon

Also, I heard that depending on which state you are registering the car, you may not have to pay the sales tax at all. If you order and pay for your car, fly over to Germany and drive around for a month, have them ship it back to US which can take anywhere from a few weeks to a few months and apparently, some states give you 30 day grace period to register your car in US (in the mean time, drive around in the Euro tag) and voila, you have passed the 90-day threshold for paying the sales tax. i.e. you save a whole bunch of more money than mentioned in the excellent article above.

I read this in an article written by someone on the United Airlines Hemisphere Dec. '04 issue. I am sure the article is available on line somwhere. In that artidle, the author took an ED of Porsche "roadster" (he won't say which model).

I hope this helps someone. And oh by the way, Munich is not a bad place to visit during the Oktoberfest. My wife and I visited last year and had a blast.

hchon

This may vary from state to state but in California if you bring it in state within 90 days of it hitting the US you WILL pay a state sales tax.
For example - buy the car in Oregon which has no sales tax. Pick it up in Germany in April and in May it arrives in Oregon. The date it arives in Oregon is when CA starts to count towards their 90 day rule - not the date you "touched" it in Munich.

"One issue with European Delivery is that you need to pay for the car 30-days before you take delivery in Europe. So, in my example, I ordered the car in November for January Euro Delivery, paid for the car in December, made my first payment in January and received the car in the US in March. This means there were two months of payments while the car was still in transit. Although you have the car on your trip, you should really figure in the loss of two months payments, or at least the interest. If you're leasing, this might be completely unacceptable. "

While many moan about making the 2 or 3 lease payments while your car is in transit I say this:

My lease allows me to drive 36,000 miles without a penalty. Now, I only have the car for about 33 or 34 months in the ED scenario. This means I can drive more miles every month without going over the 36,000 allotment. Don't count the months...cause when you lease you're really paying for miles. Since I have 2 cars I can budget the miles I put on a leased car....but unless you drive the car all over Europe your ED car will have fewer miles on it than US bought cars. (not a LOT but it's something)

Originally Posted by ff1600

UA in flight magazine web site is www.hemispheresmagazine.com
but the European Delivery article is not listed.
I scanned this into a pdf which can be emailed to anyone who wants it.
About 3.3mb.

If you could email the article I would really appreciate it................sppuddsy@aol.com

Originally Posted by MARCUS545

"One issue with European Delivery is that you need to pay for the car 30-days before you take delivery in Europe. So, in my example, I ordered the car in November for January Euro Delivery, paid for the car in December, made my first payment in January and received the car in the US in March. This means there were two months of payments while the car was still in transit. Although you have the car on your trip, you should really figure in the loss of two months payments, or at least the interest. If you're leasing, this might be completely unacceptable. "

While many moan about making the 2 or 3 lease payments while your car is in transit I say this:

My lease allows me to drive 36,000 miles without a penalty. Now, I only have the car for about 33 or 34 months in the ED scenario. This means I can drive more miles every month without going over the 36,000 allotment. Don't count the months...cause when you lease you're really paying for miles. Since I have 2 cars I can budget the miles I put on a leased car....but unless you drive the car all over Europe your ED car will have fewer miles on it than US bought cars. (not a LOT but it's something)

This is a very weak argument. On a car that has a $.20/mile penalty you're looking at $400 for a 2000 mile overage. $320 if you're prudent and pre-pay for the excess miles with up to 10 months to go on your lease ($.16 a mile).

Your 545 is in the neighborhood of $700 - $750 a month - give or take a little depending on the deal and the car. The 2 months of lost use are worth $1400 - $1500. Take away the saved mileage and you're still looking at a real loss of $1000.

Having said that...the new program changes the rules and is so agressive that it so that your point and my point are both moot. 14 days vs. 30 days and 2nd payment waived and free airfare for 2 if you ED between January and March. Very Tasty indeed.

Don't forget this tasty tidbit about leasing with ED...
Overall capitalized cost is lower, but the residual quoted is still based on the higher stateside MSRP. Your "loss" of two months is minimized by your lower lease payment.

Also, I heard that depending on which state you are registering the car, you may not have to pay the sales tax at all. If you order and pay for your car, fly over to Germany and drive around for a month, have them ship it back to US which can take anywhere from a few weeks to a few months and apparently, some states give you 30 day grace period to register your car in US (in the mean time, drive around in the Euro tag) and voila, you have passed the 90-day threshold for paying the sales tax. i.e. you save a whole bunch of more money than mentioned in the excellent article above.

Anyone know how the sales tax laws work in Georgia. Being a resident of another state I don't have to pay the Ad-Valorum Tax, but gennerally any car I've purchased here I paid sales tax on.

Do you guys think it'll be possible to get a discount off Euro MSRP on a new E90 next year?

Even if not, it's a great time to do Euro Delivery, cause you'll pay sticker otherwise on the E90 for the first 6 months or more.

Originally Posted by shabbaman

This is a very weak argument. On a car that has a $.20/mile penalty you're looking at $400 for a 2000 mile overage. $320 if you're prudent and pre-pay for the excess miles with up to 10 months to go on your lease ($.16 a mile).

Your 545 is in the neighborhood of $700 - $750 a month - give or take a little depending on the deal and the car. The 2 months of lost use are worth $1400 - $1500. Take away the saved mileage and you're still looking at a real loss of $1000.

Having said that...the new program changes the rules and is so agressive that it so that your point and my point are both moot. 14 days vs. 30 days and 2nd payment waived and free airfare for 2 if you ED between January and March. Very Tasty indeed.

I was just cruisin' the 'net and fell in here!

Back in '98 I took Euro delivery on an Alpine White M3 coupe 5sp. I spent a week driving through the Alps in Germany, Austria, Liechtenstein, Switzerland, France and Italy. The savings on the deal paid for the trip plus US$102 (road food and Best Western).

At the risk of spending other people's money my suggestion is to just do it. Judging from the iron listed on the sigs on some of these posts money's the least of the issues. You'll never have more fun than when you drive from Chamonix to Martigny and back again!

Enjoy!

Originally Posted by redm

I was just cruisin' the 'net and fell in here!

Back in '98 I took Euro delivery on an Alpine White M3 coupe 5sp. I spent a week driving through the Alps in Germany, Austria, Liechtenstein, Switzerland, France and Italy. The savings on the deal paid for the trip plus US$102 (road food and Best Western).

At the risk of spending other people's money my suggestion is to just do it. Judging from the iron listed on the sigs on some of these posts money's the least of the issues. You'll never have more fun than when you drive from Chamonix to Martigny and back again!

Enjoy!

I didn't think M cars were every discounted? Euro delivery invoice is the same as US invoice, right?

Originally Posted by Dawg90

I didn't think M cars were every discounted? Euro delivery invoice is the same as US invoice, right?

I believe that they are no longer discounted but back then they were discounted approx. 10%. You still had to account for the U.S. duty but on a US$40,000 car...

Just curious...where can I find details on Porsche's ED program?
I will be buying a new car in the next several months. Something in the 40-55k range.
Love the redesigned Boxters. If I could get like a 10% savings versus buying a US car I would seriously consider the Porsche.

OK, did some research and found out it acutally costs more to pick up a Porsche in Germany. They can kiss my ass then.

Originally Posted by SBIRS

OK, did some research and found out it acutally costs more to pick up a Porsche in Germany. They can kiss my ass then.

lol

Gary, would you mind if I quoted (copied most) and credited you for this posting in my upcomming ED expierence web site??

Jeff

Originally Posted by jefflieb

Gary, would you mind if I quoted (copied most) and credited you for this posting in my upcomming ED expierence web site??

Jeff

Haven't seen Gary, Nat Brown, post here in a while.

Originally Posted by shabbaman

This is a very weak argument. On a car that has a $.20/mile penalty you're looking at $400 for a 2000 mile overage. $320 if you're prudent and pre-pay for the excess miles with up to 10 months to go on your lease ($.16 a mile).

Your 545 is in the neighborhood of $700 - $750 a month - give or take a little depending on the deal and the car. The 2 months of lost use are worth $1400 - $1500. Take away the saved mileage and you're still looking at a real loss of $1000.

Having said that...the new program changes the rules and is so agressive that it so that your point and my point are both moot. 14 days vs. 30 days and 2nd payment waived and free airfare for 2 if you ED between January and March. Very Tasty indeed.

If you were planning a driving vacation through Europe you would also have to budget for the cost of renting a car. I just checked the Hertz.com website and a Premium rental listed as 'E-class or similar model' goes for about $150 USD per day. Taking advantage of ED saves you that cost.

The current incentives for the ED program have tipped the scales in my opinion. I will be taking delivery of a 745Li on 3/15/05. My wife and I fly from Detroit to Frankfurt to Munich on 3/12/05 and return on 3/23/05 via Vienna to Frankfurt to Detroit. The total cost of the airfare from Lufthansa is only $430 for both tickets! (including taxes and everything)

The only things I am still trying to figure out are 1) Do we do one of the custom packages offered by Valerie Wilson Travel (at a significant premium) or try to put together our own vacation. and 2) How to go about getting the European NAV disc before the trip.

I'll search the rest of this board for answers but if anyone has any suggestions in the meantime I would appreciate it.

Thanks.

mentioned above for CA for IL.

Thanks TIA

fyi for california they have recently changed the 90-day rule. for cars purchased after ocbober 1, 2004, it is one year. also you can't count transit time. so according to cali law, you'd have to remain in europe (with the vehicle) for a year in order to be excused from paying sales tax. of course with the cali tax rates that may be worth it... the way the law is written it'll revert back to 90 days for sales made after (and possibly on) july 1, 2006 but i imagine they will extend the provision when we get closer to its expiration.

**this is not legal or tax advice**

good luck.