Why do upscale brands like BMW allow "the finance guy?" - Bimmerfest - BMW Forums



Go Back   Bimmerfest - BMW Forums > BMW Model Discussions > General BMW Questions

General BMW Questions
Use this forum to ask general question about the BMW ownership and keep up on the latest BMW news. Direct all model specific questions to model specific forums below.

Reply
 
Thread Tools Display Modes
  #1  
Old 01-14-2012, 05:28 PM
hellosopo hellosopo is offline
Officially Welcomed to the 'Fest
Location: New England
 
Join Date: Oct 2009
Posts: 245
Mein Auto: 2011 E90 328xi N51
Why do upscale brands like BMW allow "the finance guy?"

I'm sorry, this turned into a rather long rant, but the gist is in the thread title.

A few weeks ago I bought a new E90. The car I wanted was on the lot and I took her out for a spin.

The salesman tells me how great the car is. It's got a nice warranty and maintenance. BMW Assist. He points out the various thoughtful but not so obvious touches put into the car, such as "the German engineered" gas cap holder that will keep me from scratching my paint during fueling. He talks about xenon lights that the car isn't equipped with, but nobody's perfect, I guess.

The salesman appraised my trade, and we settled on a price. Up to this point it was as painless as buying a car really could be given that I'm not one to pull teeth to get another $500 off the car.

We shake hands and then I'm handed over to the finance guy. My trade-in was good for a few grand plus I was putting some cash down as well, but I was still financing a portion of the vehicle through BMW FS.

So now after the salesman tells me how absolutely awesome this car is (and I agree), the finance guy proceeds to tell me that:
  • Acid rain is going to ruin my paint ("We recommend waxing it once a month") or I'll drive over some road paint and my car will be permanently marred.
  • Road salt is going to rust the car in half
  • The glass is going to shatter
  • My friend is going to jump into my car with a "ballpoint pen in his back pocket" and puncture my leather seats
  • I might drive over a little staple that requires a tire to be replaced for "$500." "Runflats can't be patched."
  • I'm going to have significant maintenance bills come 60,000 miles

Of course I've made some exaggerations here (stuff in quotes is to my best recollection), but the overall thrust of the conversation is that my brand new $40,000 car with 10 miles on it is incredibly fragile and I need lots of extra things to bring it up to snuff. I need a paint protectant, road hazard for my tires, glass insurance, leather warranty, a 2 year extended maintenance plan, and I'm sure a couple other things I can't remember. I don't recall the exact cost for all of this stuff, but I one of the options added something like $3600 over the term of the loan. GAP insurance was briefly mentioned, but even the finance guy had to admit that I didn't need it given I had so much equity already into the vehicle. However, this didn't stop him from including it in one of many options for me to purchase.

I've actually purchased and used tire road hazard plans, and probably would've been open to considering this one. The problem was that it was presented with so many other toxic options that the easiest path to escape was just to decline everything. When I declined the paint protectant, the price suddenly dropped a couple hundred dollars. I had to express my desire to decline extended maintenance multiple times, finally explaining that I will worry about five year maintenance in five years from now. "OK, if you want to decline everything, please sign an initial this so you can't come back later and tell us that we never offered it to you!" Great, thank you. I never wanted it offered in the first place.

Now I know this experience isn't unique to BMW. I've bought other new cars and gone through the same exact process; the dealerships even had the same exact software printing out the sheet explaining the costs in about four different columns depending on how much extra money one wanted to throw away. But I've never bought a car from a brand like BMW. This is a luxury brand. I think part of a luxury experience should be respecting the quality of the vehicle and not hassling me after I've already decided to plop down tens of thousands of dollars for something.

Another annoyance was an application for a BMW credit card which was slyly presented about mid way through signing all the papers. My credit score didn't get to where it is by accident and it was rather disappointing to see this nonchalantly intermixed with things that actually had to do with the sale of my car.

I understand the dealership wants to make some extra money. I suppose some people may find value in some of these options. But when I don't want to go through this, I'd rather just be asked right at the start, "Are you interested in any add-on services or maintenance plans for your vehicle?" with a simple no ending the secondary sales pitch.

Now I realize E90 is an entry level BMW and they're not exclusive by any means. It's all the car I need, want, and then some. I don't want a big car. But if I did, wouldn't I have to go through the same stupid finance guy process if I was buying a 7-Series? It just seems like there's significant room for improvement here in the sales process if BMW wants to be a notch beyond everybody else, and perhaps start driving repeat business before I've even got the keys to my first one. ("That was so painless, let's go back and do it again in four years!")
Reply With Quote
Sponsored Links
Advertisement
 
  #2  
Old 01-15-2012, 03:18 AM
Itinj6's Avatar
Itinj6 Itinj6 is offline
Officially Welcomed to the 'Fest
Location: New Jersey
 
Join Date: Nov 2011
Posts: 2,471
Mein Auto: 2012 650i Convertible
Maintenance on BMW's is expensive. It might be that they were trying to look out for you and your new car rather than pitch you. All those examples you gave, while exaggerated, are examples of stuff you can't control. I'm pretty anal about maintaining my car and from what I read on this board, many Bimmer owners are as well.

I just bought an F12 a couple months ago. The sales guy, who we dealt with for our past 4 BMW's and is trusted, strongly urged us to purchase the Rim and Tire Insurance. We were trying to politely say, "no" but he kept pushing it. It did get a tad annoying, but, sure enough, the night I drive it off the lot was the night I hit a huge pothole putting a bubble in my tire. Got a really expensive tire the very next day, no questions asked. True Story

Anyway, congrats on your new car... Enjoy it!!!
Reply With Quote
  #3  
Old 01-15-2012, 09:04 AM
Zeichen311's Avatar
Zeichen311 Zeichen311 is online now
Lost but making good time
Location: Here, there, or in transit
 
Join Date: Mar 2011
Posts: 5,049
Mein Auto: '11 335xi 4dr; '03 330Ci
Quote:
Originally Posted by Itinj6 View Post
Maintenance on BMW's is expensive. It might be that they were trying to look out for you and your new car rather than pitch you. All those examples you gave, while exaggerated, are examples of stuff you can't control.
Nope. The OP had it right. All those add-on accessories & services are HUGE moneymakers for dealers. Road hazard warranties and maintenance plans are priced very shrewdly: On average, buyers will pay more in premiums than the plans will pay out in repairs and benefits. That's how insurance works.

The fact that the pitch for these plans is so persistent and inescapable--heck, even on an ED car I had to politely decline multiple offers for the tire warranty after redelivery--tells you how profitable they are.

The tire plans, I concede, are as much about customer satisfaction and retention as profit--probably more so, even. An awful lot of buyers have no clue how vulnerable low-profile tires really are or how expensive they are to replace. Dealers push the warranty plans because they are the ones who hear the brunt of the sticker shock until the customer learns to be more alert for potholes. People who are turned off by that risk and possible expense might not come back to buy their next car, and no smart dealer wants that!

Sent from my Kindle Fire using Bimmer
__________________
2011 335xi Individual 6MT - Azurite Black Metallic / Oyster & Black / Anthracite Maple + all the good stuff
2003 330Ci Sport 5MT - Black Sapphire Metallic / Natural Brown / Myrtle + the important stuff (+ go-fast stuff)

BMW CCA
Reply With Quote
Sponsored Links
Advertisement
 
  #4  
Old 01-15-2012, 03:52 PM
JimD1 JimD1 is offline
Officially Welcomed to the 'Fest
Location: Lexington, SC
 
Join Date: Jun 2009
Posts: 970
Mein Auto: 128i convertible
That was one of the better things about my local dealer. I didn't finance anything (paid cash) but I still had to talk to the finance guy and get the pitch, decline, and sign everything. At least he was reasonably quick and not overly repetitive.

The quickest I got through this was on my daughters first Hyundai Elantra. I went on-line and did some research on price. There are two Hyundai dealers in town so she and I just went to the one she liked the best (she did a test drive and scouted inventorys at both). We did the normal price dance and I finally just told them what I thought I could buy the car for. The laughed, asked why I though that etc.. I talked to them for a couple minutes including giving them a website to check and left. I told my daughter we'd probably get a call. A couple miles down the road, they called and were within $200 of my price. I asked her if she wanted to turn around. She didn't so we went the other place and also to a Kia dealer - an Optima was the backup plan. We did the price dance with the second Hyundai dealer and got, painfully, to the same price. We left and I asked her which place she wanted to buy from and it was the first. So we went back and did the deal.

Long story to get to this point. They told us the price was so low they had to take money out of the paperwork fee. I didn't care how they got to the price. I paid cash for that one too (it is my normal way to buy a car) but I still had to talk to the business manager - their title for him. He was pissed and just pushed the paper across the desk for us to sign with minimum words. I didn't love his attitude but if I could get the next one to act that way I would. I can tolerate a less than great attitude to be done 15 minutes quicker.

Jim
Reply With Quote
  #5  
Old 01-15-2012, 05:04 PM
hellosopo hellosopo is offline
Officially Welcomed to the 'Fest
Location: New England
 
Join Date: Oct 2009
Posts: 245
Mein Auto: 2011 E90 328xi N51
Quote:
Originally Posted by Itinj6 View Post
Maintenance on BMW's is expensive. It might be that they were trying to look out for you and your new car rather than pitch you. All those examples you gave, while exaggerated, are examples of stuff you can't control. I'm pretty anal about maintaining my car and from what I read on this board, many Bimmer owners are as well.
I'm a "self insure" sort of guy. Too often these plans have exclusions which just happen to cover the specific instance I need to draw money under. I have cash set aside for issues that may come up in life ("emergency fund"), though I'm still trying to figure out what I need to expect during the first four or five years with the car that I need all this protection for. I'll go through a set of tires. If I'm unlucky I'll bubble one and need to replace that sooner. The dealership will probably put a set of brakes on it under the maintenance plan. I'll do my own oil change at a 7500mi interval and then let dealer do the 15k ones. I'll wash it and wax it like I'd need to do with any other car I owned.

I don't doubt that when stuff breaks it is expensive to fix it. But these plans are really expensive too, and it's coverage that I might never need. Even if I do need it, it still is probably cheaper to just buy what I need instead of insurance against the absolute worst case scenario. I've been lurking on these forums for a few years so I've been able to see some of the stuff that comes up and the ridiculous fees that BMW dealers charge to do some things. (Registering batteries comes to mind.)

Quote:
Originally Posted by Itinj6 View Post
Anyway, congrats on your new car... Enjoy it!!!
Thanks, and I hope it doesn't end up as bad as the finance guy said it would.
Reply With Quote
  #6  
Old 01-16-2012, 08:49 AM
kyfdx's Avatar
kyfdx kyfdx is offline
Who, me?
Location: Kentucky
 
Join Date: Aug 2003
Posts: 2,732
Mein Auto: 2006 330Ci ZHP
I love the incredulous look they give you when you decline those extras... like you are the dumbest person, ever....
__________________
2006 330Ci ZHP Imola Red
2017 X3 Metallic White
2011 X3 Bluewater (retired)
1995 M3 Montreal Blue (retired)
1987 325iS Bronzit (retired)
2011 Z4 Space Gray (retired)
2008 X3 Sapphire Black (retired)
2005 330Cic Silver-Gray (retired)
2003 325i Sport Steel Blue (retired)
1967 2000CS Delphin Gray (retired)
Reply With Quote
  #7  
Old 01-16-2012, 11:26 AM
energetik9's Avatar
energetik9 energetik9 is offline
energetik9
Location: Chicago, IL
 
Join Date: Sep 2008
Posts: 2,361
Mein Auto: 911 Carrera 4S
I think you are just dealing with personalities of a specific dealership. I've never come across a hard sell on these items. I just say no and then they have me sign to ensure I did not want them for record. In fact, the last time I purchased a BMW, she started to show me the add-on's, I said no before she could even place the card in front of me and she just said OK and just moved right on to the paperwork. I About two seconds of time. I've heard about more confrontational experiences, but I've never experienced that with a BMW purchase.
__________________
Current - 2009 Carrera 4S
Current - 2010 128i convertible (wife's car)
Previous - 2009 M-sport 335i coupe
Previous - X5 3.0i with prem/sport
Previous - 2000 ///M roadster
----------------------------
Someone should invent a sarcasm font...

"In car rock, paper, scissors 911 beats Prius everytime."
Reply With Quote
  #8  
Old 01-17-2012, 06:15 AM
bagwell56 bagwell56 is offline
Registered User
Location: nj
 
Join Date: Jan 2012
Posts: 26
Mein Auto: 525I
let me add this isnt just at BMW- my FIL turned in his lexus 2 weeks ago. Went up to the dealer the next day to pick up the car and he had "some papers" to sign.

I wish i brought my phone with me to video tape this- but since he knew what was coming, he had a popsickle stick with a note attached that said "NO" on it. Before the guy sat down my FIL put the stick up against the guys computer.

when he came in he looked over and said, where did that come from-

my FIL says "oh thats just to help speed things up, when you feel like asking me a question thats going to require more money, you look at that little sign and move along"

the way it was said and the look the guy had, i had to excuse myself and before i got to the door busted out laughing.

needless to say, the finace guy said sign this and my FIL was done in less than 2 min.
Reply With Quote
  #9  
Old 01-17-2012, 06:44 AM
SpeedyD SpeedyD is offline
Officially Welcomed to the 'Fest
Location: Bridgewater/Mansfield, MA
 
Join Date: Sep 2011
Posts: 136
Mein Auto: 2010 BMW 335d Sport
Quote:
Originally Posted by bagwell56 View Post
let me add this isnt just at BMW- my FIL turned in his lexus 2 weeks ago. Went up to the dealer the next day to pick up the car and he had "some papers" to sign.

I wish i brought my phone with me to video tape this- but since he knew what was coming, he had a popsickle stick with a note attached that said "NO" on it. Before the guy sat down my FIL put the stick up against the guys computer.

when he came in he looked over and said, where did that come from-

my FIL says "oh thats just to help speed things up, when you feel like asking me a question thats going to require more money, you look at that little sign and move along"

the way it was said and the look the guy had, i had to excuse myself and before i got to the door busted out laughing.

needless to say, the finace guy said sign this and my FIL was done in less than 2 min.
That is pretty funny in practice but massively disrespectful....
__________________
2011 335d M-Sport, Black Sapphire Metallic/Saddle Brown, Premium, Nav

Retired: 2010 335d, Monaco Blue/Oyster, Sport, Premium, Nav, Logic 7 Sound, Comfort Access



Reply With Quote
  #10  
Old 01-17-2012, 07:05 AM
haskindm haskindm is offline
Officially Welcomed to the 'Fest
Location: Southern Maryland
 
Join Date: Jun 2011
Posts: 402
Mein Auto: 335I Convertible
The car business has become so competitive that dealerships are looking for other ways to increase profits. Unfortunately there are HUGE profits to be made in financing, extended warranties, paint and fabric protection, etc. It seems that the "hard sell" works so that is what they are doing. When I bought my last car and was turned over to the finance department, I opened with "Let me save us both some time. I am not financing the car, and I do not buy extended warranties, maintenance plans, or protection plans". The young lady smiled and thanked me for my frankness and we continued with the necessary paperwork with no more sales pitch.
Reply With Quote
  #11  
Old 01-17-2012, 07:13 AM
bagwell56 bagwell56 is offline
Registered User
Location: nj
 
Join Date: Jan 2012
Posts: 26
Mein Auto: 525I
Quote:
Originally Posted by SpeedyD View Post
That is pretty funny in practice but massively disrespectful....
I see your point, wasnt my idea, but my FIL takes the gloves off when it comes to dealers.

This is my FIL 5th lease from the same salesman. And before during and after the price is set my FIL makes it clear- I DO NOT WANT EXTRA"S. And he tells the sales guy, if i go to see this other guy and starts with buying paint and tire protection, im outta here.

My FIL is also the type to get up and leave and has done so numerous times and he gets the deal he wants.

Its a game, they know it, he knows it. Let me also add they took his car in 5 months before the lease was up. the car is driven less than 7 k a year, so the dealer will make more money on the buy back, so its not like my FIL was dying to get in this car.

You could easily say the same for the dealership, when a customer says i dont want this or that, the sales person should advise the finance person of this, correct?
IMHO its bad practice to consistantly ask the same customer for over 16 years- do you want paint protection when he says "im paying this per month, nothing else"


However, since the dealership is trying to make money and we the customers are trying to save, let the games begin.

Sorry but i have to disagree with your comment "massively disrespectful" because what dealers (not all, but most) try to pull on customers and the fees they try to charge, now that is disrespectful, immoral and bad business practice.

Its the name of the game

i was not the one who coined the phrase "the stealers" when referring to the dealers
Reply With Quote
  #12  
Old 01-17-2012, 07:24 AM
SpeedyD SpeedyD is offline
Officially Welcomed to the 'Fest
Location: Bridgewater/Mansfield, MA
 
Join Date: Sep 2011
Posts: 136
Mein Auto: 2010 BMW 335d Sport
Quote:
Originally Posted by bagwell56 View Post
I see your point, wasnt my idea, but my FIL takes the gloves off when it comes to dealers.

This is my FIL 5th lease from the same salesman. And before during and after the price is set my FIL makes it clear- I DO NOT WANT EXTRA"S. And he tells the sales guy, if i go to see this other guy and starts with buying paint and tire protection, im outta here.

My FIL is also the type to get up and leave and has done so numerous times and he gets the deal he wants.

Its a game, they know it, he knows it. Let me also add they took his car in 5 months before the lease was up. the car is driven less than 7 k a year, so the dealer will make more money on the buy back, so its not like my FIL was dying to get in this car.

You could easily say the same for the dealership, when a customer says i dont want this or that, the sales person should advise the finance person of this, correct?
IMHO its bad practice to consistantly ask the same customer for over 16 years- do you want paint protection when he says "im paying this per month, nothing else"


However, since the dealership is trying to make money and we the customers are trying to save, let the games begin.

Sorry but i have to disagree with your comment "massively disrespectful" because what dealers (not all, but most) try to pull on customers and the fees they try to charge, now that is disrespectful, immoral and bad business practice.

Its the name of the game

i was not the one who coined the phrase "the stealers" when referring to the dealers
I didn't mean it was disrespectful to the dealership, just to the finance guy as a person. He is doing his job. Some people WANT those add-ons honestly (warranties, tire protection). A simple "I don't want any extended warranties or hard sells" would have sufficed. Using the prop is pretty disrespectful. I understand it is a game and needs to be played that way, but that one is just over the line.
__________________
2011 335d M-Sport, Black Sapphire Metallic/Saddle Brown, Premium, Nav

Retired: 2010 335d, Monaco Blue/Oyster, Sport, Premium, Nav, Logic 7 Sound, Comfort Access



Reply With Quote
  #13  
Old 01-17-2012, 07:33 AM
bagwell56 bagwell56 is offline
Registered User
Location: nj
 
Join Date: Jan 2012
Posts: 26
Mein Auto: 525I
i see your point, but its the same dealer and same person for the past 16 yrs. To me, I think they do it to yank his chain or they think maybe he will crack. With him and the dealer, its a love hate relationship.

trust me, this was not the FG's first day on the job and he knows my FIL, from previous yrs.

I could never do that, but there is just something about car dealers that really rubs him the wrong way. Its almost like a Sienfield episode and I think there is more to this than he will talk about.
Reply With Quote
  #14  
Old 01-17-2012, 08:08 AM
Michael Schott Michael Schott is offline
Super Moderator
Location: Farmington Hills, MI
 
Join Date: Dec 2007
Posts: 7,743
Mein Auto: 2017 VW GTI Sport MT
This is SOP for car dealers in this day and age. I declined all of these but can see why dealers push these packages. We all want to get the best deals we can on our cars. When we do this, what do you think this does to the dealer's margin and the salesman's commission? Invoice on a BMW is about 7.5% below MSRP and even though the dealer doesn't buy at invoice I doubt there's a a lot of margin other than the high MSRP to begin with.
Reply With Quote
  #15  
Old 01-17-2012, 12:43 PM
haskindm haskindm is offline
Officially Welcomed to the 'Fest
Location: Southern Maryland
 
Join Date: Jun 2011
Posts: 402
Mein Auto: 335I Convertible
Unfortunately this seems to be a trend for all businesses these days. The retail business has become very competitive and margins on products are very low. Go into most stores and you will be given the opportunity to obtain a credit card with that stores name on it. Many stores make more off their credit card sales than from the products that they provide. Grocery stores offer "loyalty cards". Electronic retailers offer extended warranties, often costing almost half of the price of the new product! In the car business it is financing, insurance, maintenance plans, and protection plans. Welcome to the new world!
Reply With Quote
  #16  
Old 01-17-2012, 12:55 PM
Tom K.'s Avatar
Tom K. Tom K. is offline
Officially Welcomed to the 'Fest
Location: Maryland
 
Join Date: May 2008
Posts: 3,039
Mein Auto: '07 328iT.'13 Boxster
Quote:
Originally Posted by energetik9 View Post
I think you are just dealing with personalities of a specific dealership. I've never come across a hard sell on these items. I just say no and then they have me sign to ensure I did not want them for record. In fact, the last time I purchased a BMW, she started to show me the add-on's, I said no before she could even place the card in front of me and she just said OK and just moved right on to the paperwork. I About two seconds of time. I've heard about more confrontational experiences, but I've never experienced that with a BMW purchase.
Same experience here & my last BMW purchase was at a NoVa dealership.

Tom
Reply With Quote
  #17  
Old 01-17-2012, 02:24 PM
cwinter's Avatar
cwinter cwinter is offline
Here comes trouble!
Location: Dallas, TX
 
Join Date: Feb 2009
Posts: 8,356
Mein Auto: 2009 328i E90 :)
Quote:
Originally Posted by energetik9 View Post
I think you are just dealing with personalities of a specific dealership. I've never come across a hard sell on these items. I just say no and then they have me sign to ensure I did not want them for record. In fact, the last time I purchased a BMW, she started to show me the add-on's, I said no before she could even place the card in front of me and she just said OK and just moved right on to the paperwork. I About two seconds of time. I've heard about more confrontational experiences, but I've never experienced that with a BMW purchase.
Bingo! The time we spent with the finance guy was incredibly short. As he was printing and preparing all the documents, he plopped a few laminated items down with information on the various extended warranties, paint sealers, seat protections, etc etc etc they offered. While preparing the documents he remarked if any of them sounded interesting to me to let him know. I declined and he put them back in the folder where he pulled them from.

Incidentally, the guy at the Chevy dealer for my wife's Acadia was outright criminal. When I declined additional warranties, he went over paperwork showing me the final monthly payment where I stopped him, saying it was way too high. He claimed "That is what it comes out to." at which point I told him if he opens an Excel sheet for me, I can run the basic numbers for him within seconds. He looked over his stuff and claimed an "honest" mistake; his number still had the extended warranty in it.
__________________
2009 328i Sedan - Ordered: 2/24/09 .:. Delivered: 5/6/09
Jet Black | Black Dakota | Aluminum | Premium | Sport | Xenon | CA | Split Fold Seats


Quote:
Originally Posted by furby076 View Post
You will rue this day, RUE THIS DAY
Reply With Quote
  #18  
Old 01-17-2012, 03:20 PM
hellosopo hellosopo is offline
Officially Welcomed to the 'Fest
Location: New England
 
Join Date: Oct 2009
Posts: 245
Mein Auto: 2011 E90 328xi N51
Quote:
Originally Posted by energetik9 View Post
I think you are just dealing with personalities of a specific dealership. I've never come across a hard sell on these items. I just say no and then they have me sign to ensure I did not want them for record. In fact, the last time I purchased a BMW, she started to show me the add-on's, I said no before she could even place the card in front of me and she just said OK and just moved right on to the paperwork. I About two seconds of time. I've heard about more confrontational experiences, but I've never experienced that with a BMW purchase.
I wouldn't call it confrontational, but it was less than friendly. I did get the sort of "you are an idiot" look like kyfdx is talking about when I didn't want to spend a couple grand upfront to purchase years 4-6 maintenance. When I declined paint protection there was a snide comment made about waxing it in February. Spewing mild insults at the customer because he's not prepared to buy every single thing he is offered does not seem to be the best business practice.

Quote:
Originally Posted by SpeedyD View Post
A simple "I don't want any extended warranties or hard sells" would have sufficed.
This doesn't seem to get the point across, unfortunately. I'm already prepared to buy a product costing tens of thousands of dollars, so stop trying to essentially embarrass me into spending thousands on some additional high-margin products. If there's not enough margin in there on the car for them to survive then that's some other problem that is beyond my control. I'm all for a sane car pricing system which doesn't involve playing games.
Reply With Quote
  #19  
Old 01-17-2012, 04:50 PM
Jon Shafer's Avatar
Jon Shafer Jon Shafer is offline
Bimmerfest Founder
Location: Santa Barbara, CA
 
Join Date: Dec 2001
Posts: 14,461
Mein Auto: E92 M3 Cp + E30 325
Quote:
Originally Posted by Zeichen311 View Post
Nope. The OP had it right. All those add-on accessories & services are HUGE moneymakers for dealers. Road hazard warranties and maintenance plans are priced very shrewdly: On average, buyers will pay more in premiums than the plans will pay out in repairs and benefits. That's how insurance works.

The fact that the pitch for these plans is so persistent and inescapable--heck, even on an ED car I had to politely decline multiple offers for the tire warranty after redelivery--tells you how profitable they are.

The tire plans, I concede, are as much about customer satisfaction and retention as profit--probably more so, even. An awful lot of buyers have no clue how vulnerable low-profile tires really are or how expensive they are to replace. Dealers push the warranty plans because they are the ones who hear the brunt of the sticker shock until the customer learns to be more alert for potholes. People who are turned off by that risk and possible expense might not come back to buy their next car, and no smart dealer wants that!

Sent from my Kindle Fire using Bimmer

If I can add any insight into this discussion, the issue here really is the dwindling of profit centers for F&I over the past 20 due to the huge rise in lease penetration. Since most leases are 36 months, and warranties usually run 48 months, Service Contract (MBP/Mechanical Breakdown Protection ~ "extended warranty") sales penetration tumbled. It got so bad that they had to invent who new paradigms for products to sell, stuff like LoJack, and then tire/wheel insurance, etc. Until the Dealer Principals of the world agree to pay F&I Professionals some other way (not commission), this problem will continue.
__________________
I <3 BIMMERFEST
Reply With Quote
  #20  
Old 01-18-2012, 07:47 AM
thumper_330's Avatar
thumper_330 thumper_330 is offline
Is this thing on?
Location: St. Louis, MO
 
Join Date: Jan 2009
Posts: 1,375
Mein Auto: 2015 R1200R, 2016 ATS-V
Quote:
Originally Posted by Jon Shafer View Post
If I can add any insight into this discussion, the issue here really is the dwindling of profit centers for F&I over the past 20 due to the huge rise in lease penetration. Since most leases are 36 months, and warranties usually run 48 months, Service Contract (MBP/Mechanical Breakdown Protection ~ "extended warranty") sales penetration tumbled. It got so bad that they had to invent who new paradigms for products to sell, stuff like LoJack, and then tire/wheel insurance, etc. Until the Dealer Principals of the world agree to pay F&I Professionals some other way (not commission), this problem will continue.
It's also not helped by the simple fact that the cost of doing business has skyrocketed while the profit margins have shrunk. Like it or not, a BMW dealer has to really "bring their A-Game" in order to compete these days. Dealerships are getting bigger, flashier and fancier than ever in order to bring the customers in. Hell, even competition among BMW dealers has taken its toll here. We have four Bimmer dealers in the St. Louis metro area, and looking at the preliminary 2011 sales figures it appears that the one that got the most business was the one with the flashiest building and that put the largest amount into advertising. In fact, you can guess who has the worst building and lowest advertising budget because they were at the bottom of the ranking. For the record, I have friends at all four dealerships which is why I have access to that information... but won't reveal who's who

On the bright side some dealers don't do the "finance guy thing", but yes the upsell is almost a given these days. There are a couple of dealership owners and managers who consider a deal isn't complete until at least one of these upsell items have been checked.

I think the key to dealing with this really is to understand that a dealer is a business that exists to make money. As such, read EVERYTHING you sign... take copies of them as well. Make sure that you don't accept anything you don't want, and ignore the look of disdain you might get from some of these finance guys who look like they cannot fathom why you would want to spend $800 on pinstripes.
__________________
2001 E46 BMW 330i Sport Package 6MT *SOLD*
2004 BMW R1150GS - *SOLD*
2004 E60 BMW 545i Sport 6MT - *SOLD*
2012 BMW 135i - Deep Sea Blue / Terracotta / DCT *SOLD*
2012 BMW K1600GT - Vermillion Red Metallic - *SOLD*
2008 BMW E90 M3 - Interlagos Blue / Silver / 6MT - *SOLD*

http://www.driveblog.net
Reply With Quote
  #21  
Old 01-25-2012, 03:02 PM
lexhair lexhair is offline
got something nicer?
Location: Wykagyl
 
Join Date: Nov 2005
Posts: 417
Mein Auto: Ex'11 535 GTx Now 970.2
The "finance guy" was the absolute worst part of my last buying experience. The only thing I wanted was a maxed out extended warranty (I bought a used F07 that was less than 12 months from in service so it wasn't CPO) and he couldn't price it correctly. I bought it cash so I had the cashiers check already made out for the price less trade. Working out an acceptable remittance for the warranty cost was a royal PITA and waste of time.
Reply With Quote
  #22  
Old 01-25-2012, 03:12 PM
Meiac09's Avatar
Meiac09 Meiac09 is offline
Officially Welcomed to the 'Fest
Location: Chicago
 
Join Date: Jan 2006
Posts: 1,282
Mein Auto: 3er
One of many advantages to buying your car via e-mail and Fedex... No F+I guy at the BMW Welt or PC.

I bit and bought the Tire protection on my first E90. It was great for the first year, I broke even three times over. As soon as I moved away from New England, I had an adjuster find some technicality on literally every tire since. It also kept me to those crappy Continental tires they had on the 2006 E90's. I got rid of it and the run-flats and the car was about 10x better, but I still worried about bending rims. I don't have it on my new car (knock-on-wood) but I plan to get it from Tire Rack when I get a new set of tires.

We have done extended maintenance on all of our cars since we buy and keep them through 100,000 miles. That has been good to me so far, but will be supplemented with OSM on my new E90.
__________________
Reply With Quote
  #23  
Old 01-25-2012, 04:12 PM
SD ///M4's Avatar
SD ///M4 SD ///M4 is offline
///Multiple
Location: San Diego, CA
 
Join Date: Jan 2011
Posts: 4,519
Mein Auto: '16 M4, '06 Z4MR, '18 M3
A couple of decades ago (well, OK, almost 40 years ago) in Detroit with a previous long term live-in girlfriend it was time to buy a new car. It was her turn for the new car so I researched some cars that met her needs and made some recommendations. It was going to be a small four-cylinder Japanese car, so there wasn't a lot of discussion about options but primarily the exterior color and the interior, and whether it was a manual or automatic.

I passed this particular dealer on my way to work every day and one day I see our new car sitting out in front. It's the right color, it was a manual, so we went in to take a look. I had already researched this car extensively and I didn't need anyone to "sell" it to me. Just give me your best price and if I like that price we'll buy it. This sales guy proceeds to start telling me everything that I already know about the car. I kept saying, stop selling me the car, just give me your price. He wanted a $100 check to take to his manager to "show our interest". I told him look, I want to buy this car, just give me the price. Finally, to shut him up I wrote a check for $100 and I got the price. We haggled a little, he came down to a price that I thought was reasonable, and we agreed on the price. At that point I needed to attend a meeting so I left my girlfriend to finish up the paperwork. A couple of hours later I get home and she's in tears. They had apparently taken her into a room and proceed to hard sell her every post-sale product that they had until it was time for the dealership to close. I was furious. I went back to the dealer the next day, asked for the sales manager, tore up the contract in his face and demanded my $100 back. I told him that we had already decided to buy the car before we walked in the door and their stupid antics had unsold the car. We ended up buying a different brand from another dealer and never did any business with that dealer again.

It's sad to see that those tactics still exist almost 40 years later. Apparently, enough people succumb to them so it continues.
__________________
- Tom
-------
His: 2016 M4 Coupe | Sakhir Orange Metallic | Black Full Merino Leather | CF Trim | M DCT | Adaptive M Suspension | 19" Black Alloy Wheels | ZEC | ZLP | ZDB | MPE | ED 5/13/16
Hers: 2018 M3 Sedan | San Marino Blue Metallic | Black Full Merino Leather | CF Trim | M DCT | ZCP | ZEC | ZDA | 5AG | ED 7/18/18
Ours: 2006 Z4 M Roadster | Interlagos Blue Metallic | Black Extended Nappa Leather | Carbon Leather Trim | Purchased 7/19/12


Reply With Quote
  #24  
Old 01-25-2012, 04:32 PM
Stealth.Pilot's Avatar
Stealth.Pilot Stealth.Pilot is offline
The Driver
Location: Atlanta
 
Join Date: Jul 2009
Posts: 4,641
Mein Auto: 2014 M5
I bought my car by phone, email and fedex from Greg Poland at Pacific BMW. Never spoke with the Finance Guy. Was the best sales experience ever.

Greg Poland's operating model should be the future of car sales.
__________________
2014 Porsche 911 Turbo S
2015 Mercedes C300 4MATIC
Memberships: BMW CCA, Peachstate PCA, NMA, AAA, RAC

Sold:
2015 Jaguar F-Type R
2014 BMW M5 Individual Dinan Stage 1
2013 BMW M5 Individual
2012 BMW 550i Dinan Stage 2
2004 BMW M3
2001 BMW 330Ci
1997 BMW 328Ci
1994 BMW 325Ci
Reply With Quote
  #25  
Old 01-25-2012, 08:08 PM
EconoBox EconoBox is offline
Officially Welcomed to the 'Fest
Location: in my mind
 
Join Date: Aug 2011
Posts: 1,430
Mein Auto: 2001 330i
This is why I have always only ever bought used cars with cash.
No dealer. No loan.
Reply With Quote
Reply

See More Related BMW Stories


Forum Navigation
Go Back   Bimmerfest - BMW Forums > BMW Model Discussions > General BMW Questions
Today's Posts Search
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



Forum Jump


All times are GMT -7. The time now is 06:46 PM.


Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2019 DragonByte Technologies Ltd.
© 2001- VerticalScope Inc. All rights reserved.