European Delivery 101
What is European Delivery (ED)?
European Delivery (ED) is a program offered by BMW that allows you to pick up your car in Munich, Germany and enjoy driving it throughout Europe while on vacation or a business trip (BMW European Delivery Website). On 17 October 2007, BMW opened the BMW Welt in Munich, a temple to the BMW brand and delivery center capable of over 250 deliveries per day. Deliveries started on 23 October 2007 and the first delivery was documented in several articles.
One of the biggest advantages to doing European Delivery is that there is a significant cost savings to purchasing in the United States that in some cases could exceed the cost of your trip. Vehicles ordered through the BMWNA European Delivery Program are identical in specifications to those found at dealers (US models and options ONLY). In order to qualify for the European Delivery program, you must meet the following requirements:
- Be at least 18 years of age with a valid driver's license and passport.
- Place your order through an authorized BMW center. Note: Cars built in the U.S. (X3, X5, and X6 models) are not eligible for the European Delivery Program, nor are MINIs.
- You may keep your car in Europe up to 5 months after delivery (there is a 19% penalty tax if your car is not exported within the 6-month period). Cars financed through BMW Financial Services must be exported within 90 days. Cars leased through BMW Financial Services must be exported within 30 days.
- Your new BMW is restricted to private use by tourists (including business travelers). Persons working in Europe on temporary or long-term assignments are not eligible for the special customs license plates issued under the European Delivery Program.
- ED can be combined with Performance Center Delivery (PCD) at the Spartanburg plant.
There is a limit to the number of EDs you may do at one time: Each household may do one ED every 12 months. Exceptions are case by case.
If you have any specific questions, take advantage of our European Delivery Discussion Forum!
Why is European Delivery Cheaper than US Delivery?
BMW created the European Delivery program to promote sales of its cars in the 1960s. Jonathan Spira wrote an excellent article about European Delivery programs and their history. Although all of BMW's reasons are proprietary corporate matters, one of the principal benefits it brings the company is customer loyalty. Many people who take delivery of a BMW in Europe won´t consider the purchase of a car in any other way.
Many people ask why cars have a lower price when purchased through ED. The reason is that BMW and BMWNA sell cars through ED outside of the usual dealer incentive programs offered by BMWNA to its dealers. US BMW dealers receive incentive payments from BMW NA based on customer satisfaction, or "CSI" scores. Those scores, in conjunction with the number of cars sold, result in incentive payments. BMWs sold through the ED program do not increase a dealer's unit sales and are not subject to the CSI program. Because BMW NA does not pay out this incentive money, they are able to pass along those savings to you in the form of a reduced price on an ED car. The amount of the discount is approximately equal to the potential CSI money a dealer would receive on the sale of the same car through US delivery.
The savings are not a result of different taxes or duties, as many people speculate. The duty on an imported car, whether new or used, is 2.5% of the declared value. In other words, duty makes up about $1000-$1500 of the price a 3-series BMW. Any reduction in value because it is used would not significantly change the amount of duty. Even a full exemption would not fully account for the price savings of ED.
You also can save money through European Delivery because the price is more negotiable with some dealers. Cars sold through ED generally do not come out of the dealer's allocation--in the past M cars and newly introduced models where supply is limited (e.g. coupes and convertibles in 2007) have reduced a dealer's allocation. The net result--a dealer is selling an extra car, rather than one of his allocated cars that he could sell to someone else at close to MSRP, as is the case with US delivery. Not all dealers realize that ED cars are basically bonus sales. Many refuse to negotiate off of the ED MSRP price, or try to explain that there are extra costs associated with ED for the dealer (where there are none). Generally speaking, if your dealer says this, you should look for another dealer. It is routine to pay $500 to $700 above Euro Delivery Wholesale Pricing (which should be provided to you), with no additional dealer fees aside from the typical tax, title and license fees (which vary from state to state). Note that the "Training Service Fee" is not to be charged for ED sales.
In sum, this may save a buyer ~10% of US MSRP, more if any BMW NA or BMW FS incentives are available during your ordering time frame. For one example, during the last two months of 2010 BMW FS offered US buyers 0.9% APR for three-year loans, and a rebate of $1,500 as "Holiday Cash." When combined with an unpublished Steptronic (automatic transmission) rebate of ~$1,400, the savings could reach upwards of ~$7k from the US MSRP on a EuroDelivery 2011 335i.
Lastly, with ED cars that will be leased it is important to check the numbers very carefully to ensure that the residual value is based upon US MSRP, NOT the Euro Delivery MSRP.
For a detailed discussion of the US vs. Europe BMW pricing disparity, please see this thread: http://www.bimmerfest.com/forums/showthread.php?t=285378