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  #26  
Old 09-30-2019, 09:25 AM
nv6425 nv6425 is offline
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Quite topical I think...any ideas on what happens to MY 2019 incentives, residuals in October? Also curious if anyone thinks there will be another reduction in MF given the Fed rate reduction a week or so ago?
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  #27  
Old 09-30-2019, 12:04 PM
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Quite topical I think...any ideas on what happens to MY 2019 incentives, residuals in October? Also curious if anyone thinks there will be another reduction in MF given the Fed rate reduction a week or so ago?
Generally speaking, 4th Quarter usually delivers the strongest "Sales Support" marketing incentive offerings, as BMW starts the big year-end push to bolster sales figures.

I have a feeling that October will see some enhanced offerings.
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  #28  
Old 10-01-2019, 12:16 AM
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When will G20 330e be available? Are the 2020 330e ordering and pricing guides available yet?
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  #29  
Old 10-01-2019, 08:32 AM
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BMW changed the MSD program a while back and reduced the rate reduction. Is it still worthwhile to do MSDs vs keeping my cash in a savings account with 2% interest?
I might be a little late here, but...

Anything you save on the payment by utilizing MSDs is an after-tax gain (assuming you can't write your car off for business).

With a max money factor reduction of .00035, the return on MSDs will likely be at least 6-7%, and can go as high as 10%-11%, depending on how good your deal was.

As an example, a friend of mine signed a lease on an X1, yesterday. $40,990 MSRP.
MSDs saved him $21.20/mo. for an outlay of $2800

After tax return of 9.08%.

Of course, the amount you are investing is small, so the total number isn't anything special. But, it dropped his payment by 5.6%, which I don't think anyone would turn down.
There is no reason NOT to do it.
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  #30  
Old 10-01-2019, 09:47 AM
1968BMW2800 1968BMW2800 is offline
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I might be a little late here, but...

Anything you save on the payment by utilizing MSDs is an after-tax gain (assuming you can't write your car off for business).

With a max money factor reduction of .00035, the return on MSDs will likely be at least 6-7%, and can go as high as 10%-11%, depending on how good your deal was.

As an example, a friend of mine signed a lease on an X1, yesterday. $40,990 MSRP.
MSDs saved him $21.20/mo. for an outlay of $2800

After tax return of 9.08%.

Of course, the amount you are investing is small, so the total number isn't anything special. But, it dropped his payment by 5.6%, which I don't think anyone would turn down.
There is no reason NOT to do it.
Agree. The new lease I'm looking at nets me 8% return on 7 MSDs and about $24/month payment savings. Compared to the T-bill that just matured today, which gave me about 2.2% annualized return and, if I'm lucky, I might snag a replacement in the secondary market for 2%.

Yes, not big bucks savings on MSDs, but if I can offset most of the lease fee... every bit helps rationalize the insanity of going through this drill every three years just to sniff that new car smell. I tell myself I can quit any time
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  #31  
Old 10-01-2019, 10:06 AM
namelessman namelessman is offline
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Yes, not big bucks savings on MSDs, but if I can offset most of the lease fee... every bit helps rationalize the insanity of going through this drill every three years just to sniff that new car smell. I tell myself I can quit any time
And there is yet a parallel universe on bimmerfest debating how to bring 20-year old bimmers to 300k+ miles, where some claim genuine BMW parts are overpriced manure, and yet there are constant pleas for help about using aftermarket parts and spending countless hours chasing issues .... Maybe those folks should quit some time too.
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  #32  
Old 10-01-2019, 11:22 AM
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When will G20 330e be available? Are the 2020 330e ordering and pricing guides available yet?

Not really on the radar yet, as least based on what I am able to see..



Quote:
Originally Posted by 1968BMW2800 View Post
Agree. The new lease I'm looking at nets me 8% return on 7 MSDs and about $24/month payment savings. Compared to the T-bill that just matured today, which gave me about 2.2% annualized return and, if I'm lucky, I might snag a replacement in the secondary market for 2%.

Yes, not big bucks savings on MSDs, but if I can offset most of the lease fee... every bit helps rationalize the insanity of going through this drill every three years just to sniff that new car smell. I tell myself I can quit any time
Clearly MSD is still a great quasi-investment. The kicker is really that the lessee really needs to step up and max out the MSDs. I have had many buyers over the years want to do only 2 - 3 MSDs, and in those cases, to me it just didn't make sense. Either you go in or you don't.
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  #33  
Old 10-01-2019, 02:11 PM
1968BMW2800 1968BMW2800 is offline
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Not really on the radar yet, as least based on what I am able to see..





Clearly MSD is still a great quasi-investment. The kicker is really that the lessee really needs to step up and max out the MSDs. I have had many buyers over the years want to do only 2 - 3 MSDs, and in those cases, to me it just didn't make sense. Either you go in or you don't.
Agree. Roll 7 or don't roll at all.
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  #34  
Old 10-08-2019, 02:50 PM
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Surely MSDs and subsidized RV and stackable incentives and everyday low rate(fed rate + 3% = 3% when fed rate is zero!) made leasing quite attractive starting, say, around 7 years ago(2012 fall) when BMWAG started dumping euro allocation (esp. F30 3-series) to major metro markets(group F's?).

The lease "goodies" did not stop at lease acquisition, rather the huge RV haircut at lease buyout to match FMV(instead of inflated RV) was really the hidden gem that some festers utilized.

Now that lease incentives and buyout discounts have been significantly curtailed, the pendulum seems to swing back to cash/finance.
My last three BMW leases have all been vehicles with MSRP of $90-105K, and monthly payments for each were about 1% of MSRP (or much less, in the case of my ED deal). The current lease is up at the end of this year.

Will be interesting to see how BMW pitches what sounds like could be a 20-40% increase in payment for the same cost vehicle. And even if the new lease deal makes sense relative to a purchase deal, they've already conditioned me, the customer, to expect a lease payment in a given, lower range.
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  #35  
Old 10-08-2019, 04:07 PM
1968BMW2800 1968BMW2800 is offline
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Will be interesting to see how BMW pitches what sounds like could be a 20-40% increase in payment for the same cost vehicle. And even if the new lease deal makes sense relative to a purchase deal, they've already conditioned me, the customer, to expect a lease payment in a given, lower range.
My last lease was at the other (low) end of the MSRP spectrum, as will be my new one next week. Easily hit the below 1%, tax included, last time. This time the dealer prepared me for sticker shock with a similar MSRP car leasing for well over 25% more per month as of August 2019.

We went ahead and ordered the car in August and, shazam, incentives fell into place for October delivery, lease money factor has come down, MSD's are in play again, residuals aren't quite as aggressive, but are within 2% of last time, and our payment will be about $10 more per month than last time around (2016) with only tax, tags and lease fee for drive offs.

I would have ground down even harder but my wife insists that, since this time our Sales Manager went the extra mile-and-a-half to get us a one-off color combination that's not supposed to be available in the states, and a very fast turn around from order to delivery, this time the dealer gets $500 over invoice, before incentives. Killin' me to leave $500 on the table, but, as the Little Missus points out, the karma circle must be maintained. Fair enough.

The key is working with the right folks at the right dealership, and, of course, always bringing the right attitude. Always.
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  #36  
Old 10-08-2019, 04:15 PM
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That's encouraging.

It's about time for me to get busy.
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  #37  
Old 10-08-2019, 04:24 PM
1968BMW2800 1968BMW2800 is offline
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That's encouraging.

It's about time for me to get busy.
I have no idea how Texas compares to the Left Coast when it comes to leasing. YMMV. Start early, get busy. Best of luck.
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  #38  
Old 10-08-2019, 08:31 PM
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I have no idea how Texas compares to the Left Coast when it comes to leasing. YMMV. Start early, get busy. Best of luck.
Texas has been horrible for BMW deals relative to Calif., and that's why two of my last three deals were through GregP. However, sales tax rules favor the local dealers, so I was able to make a TX deal on my current lease, but it was a battle. I'll give it a shot this go-round, but I won't hesitate to call Greg and make a PCD order.
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  #39  
Old 10-11-2019, 09:53 AM
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Originally Posted by TXPearl View Post
Texas has been horrible for BMW deals relative to Calif., and that's why two of my last three deals were through GregP. However, sales tax rules favor the local dealers, so I was able to make a TX deal on my current lease, but it was a battle. I'll give it a shot this go-round, but I won't hesitate to call Greg and make a PCD order.

Texas and leasing has always been a major challenger for out-of-state dealers, the reason being that Texas is a "Personal Property Tax State"..
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  #40  
Old 10-18-2019, 03:30 PM
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Jon, are you back in the game? Santa Barbara?
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  #41  
Old 10-22-2019, 03:40 AM
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The business model has changed

Jon,

My observation about some of the BMW stores in NJ is that discounts on the vehicles are very aggressive (close to or below invoice) but the DAS fees have gone up significantly. I am seeing nitrogen fill tires for $199-299; theft prevention packages (etching, etc) for $600 or more; and document process fees of $599 or more.

This new business model is frustrating but my guess is that 75% of customers do not understand it and just pay it. So someone says that they got a great deal on a 5 series for $550 a month but ends up paying $3500 DAS and that is without MSDs.

Dealers need to make money to keep the lights on.
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  #42  
Old 10-22-2019, 08:57 AM
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The biggest thing I see is the "no haggle" "will deliver the car to you" model. It's like the millenials (of which I am a part) were not taught how to negotiate (and that goes for negotiate anything) and therefore they are terrified of car buying. So, the corporate entities taking over dealers are slowly moving to the "no haggle" model, and using the internet to slash thru that MSRP for a nominal discount, and then they make it all up in fees for ridiculous things that they try to represent as concierge like services.

I bought a used car this past month because I have to have my hip replaced and I figured driving a manual (my previous lease was a 2017 340i 6MT) was not gonna be fun for a year. So since I didn't want to knee-jerk lease, I just bought an old e46. Anyway, most of the used car dealers of any repute are all trying to go with the "no haggle" model. I told everyone up front, I wasn't going to waste my time looking at a car I couldn't negotiate on.

However, it seems it will all go this way eventually, and the kids will be super happy they don't have to stress while they over pay full price and for a bunch of crap no one needs, and the 1 to 1 relationship with a salesman will evaporate!
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  #43  
Old 10-22-2019, 08:50 PM
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I bought a used car this past month because I have to have my hip replaced and I figured driving a manual (my previous lease was a 2017 340i 6MT) was not gonna be fun for a year. So since I didn't want to knee-jerk lease, I just bought an old e46. Anyway, most of the used car dealers of any repute are all trying to go with the "no haggle" model. I told everyone up front, I wasn't going to waste my time looking at a car I couldn't negotiate on.
Congrats on the E46! Did the dealer force you to get "TruCoat"?

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  #44  
Old 10-23-2019, 12:46 PM
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The biggest thing I see is the "no haggle" "will deliver the car to you" model. It's like the millenials (of which I am a part) were not taught how to negotiate (and that goes for negotiate anything) and therefore they are terrified of car buying. So, the corporate entities taking over dealers are slowly moving to the "no haggle" model, and using the internet to slash thru that MSRP for a nominal discount, and then they make it all up in fees for ridiculous things that they try to represent as concierge like services.
My view is that the automakers are cutting costs, and one approach is to reduce dealer head count and operating costs. In addition, automakers are shrinking delta of invoice and MSRP, and gyrating towards a direct sales model like Tesla. So the old school car negotiation skills become phased out, or obsoleted.

One BMW CA even joked that to keep the old timers happy, he intentionally asked for MSRP + markup, and let the customer felt great by "negotiating" down to invoice plus $500.

At the same time knowledgeable customers can walk in and ask for at-invoice deal before all incentives(which is cheaper than invoice + $500!), and the CA still obliges with minimal fuss.
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  #45  
Old 10-23-2019, 09:43 PM
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My view is that the automakers are cutting costs, and one approach is to reduce dealer head count and operating costs. In addition, automakers are shrinking delta of invoice and MSRP, and gyrating towards a direct sales model like Tesla. So the old school car negotiation skills become phased out, or obsoleted.

One BMW CA even joked that to keep the old timers happy, he intentionally asked for MSRP + markup, and let the customer felt great by "negotiating" down to invoice plus $500.

At the same time knowledgeable customers can walk in and ask for at-invoice deal before all incentives(which is cheaper than invoice + $500!), and the CA still obliges with minimal fuss.
Most millennials I know are afraid to ask for anything but indignantly expect it to be given to them. That goes for wages at jobs as well. If I have one more 25 year old explain their right to a “work life balance” while still expecting the promotion and pay raise that the folks who sacrificed some “work life balance” to get, I’ll lose my mind...

Anyway, car manufacturers are rapidly heading towards the Tesla model just with a dealer network instead of direct sales. I’m skeptical of it, but maybe I’m just the fool.
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  #46  
Old 10-25-2019, 07:06 AM
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The October 24, 2019 episode of Autoline this Week has as its guest Charlie Gilchrist, 2019 NADA Chairman and president of Gilchrist Automotive in North Texas.

In this segment, Mr. Gilchrist talks about how car dealers will adapt to a changing world.

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  #47  
Old 10-25-2019, 11:13 AM
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Jon, are you back in the game? Santa Barbara?

I am going through my final reboot (I hope) to carry me through until retirement.

I am establishing a new home at BMW of Santa Maria, it should be official next week.


Quote:
Originally Posted by mjsbmw View Post
Jon,

My observation about some of the BMW stores in NJ is that discounts on the vehicles are very aggressive (close to or below invoice) but the DAS fees have gone up significantly. I am seeing nitrogen fill tires for $199-299; theft prevention packages (etching, etc) for $600 or more; and document process fees of $599 or more.

This new business model is frustrating but my guess is that 75% of customers do not understand it and just pay it. So someone says that they got a great deal on a 5 series for $550 a month but ends up paying $3500 DAS and that is without MSDs.

Dealers need to make money to keep the lights on.

It's funny when you say that. Back in 1986 when I first began selling cars we had the same situation. Every car on the lot had "Perma Plate" (paint protection) pre-applied, and all new cars had these goofy vinyl pinstripes for an additional $99. That was like what would be $350 today's money value. Then there was "Locktronics" anti-theft (that later morphed into CarJack offerings).

Today more than ever margins have eroded and dealers have had to find new ways to make profits. Wheel & Tire insurance: who would have ever even thought of such a thing back in the 1980s?

The whole retail model in auto sales is in a state of chaos currently. The push towards the "No-haggle/one-price" model is on. Dealers now fight each other to chase down stair-stepped volume bonuses.. That means going below invoice to meet target objectives set by mfr., HOPING to hit bonus tiers and recover said losses.
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  #48  
Old 10-25-2019, 11:24 AM
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I am going through my final reboot (I hope) to carry me through until retirement.

I am establishing a new home at BMW of Santa Maria, it should be official next week.





It's funny when you say that. Back in 1986 when I first began selling cars we had the same situation. Every car on the lot had "Perma Plate" (paint protection) pre-applied, and all new cars had these goofy vinyl pinstripes for an additional $99. That was like what would be $350 today's money value. Then there was "Locktronics" anti-theft (that later morphed into CarJack offerings).

Today more than ever margins have eroded and dealers have had to find new ways to make profits. Wheel & Tire insurance: who would have ever even thought of such a thing back in the 1980s?

The whole retail model in auto sales is in a state of chaos currently. The push towards the "No-haggle/one-price" model is on. Dealers now fight each other to chase down stair-stepped volume bonuses.. That means going below invoice to meet target objectives set by mfr., HOPING to hit bonus tiers and recover said losses.
I don’t think the no haggle model is going to be good for anyone beyond the big corporate dealership owners. Eventually mom and pops will be gone, CA’s will become genius positions only, like Apple store employees, and the customer will lose the ability to negotiate and build value in relationships.

I hope I’m wrong, but the Walmart/Amazon sales model is going to destroy what is currently good about car buying.
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  #49  
Old 10-25-2019, 02:29 PM
1968BMW2800 1968BMW2800 is offline
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Originally Posted by Jon Shafer View Post

Today more than ever margins have eroded and dealers have had to find new ways to make profits. Wheel & Tire insurance: who would have ever even thought of such a thing back in the 1980s?

The whole retail model in auto sales is in a state of chaos currently. The push towards the "No-haggle/one-price" model is on. Dealers now fight each other to chase down stair-stepped volume bonuses.. That means going below invoice to meet target objectives set by mfr., HOPING to hit bonus tiers and recover said losses.
A nasty little example of how tight the squeeze has become and how dealers are responding:

Up front, I need to offer this disclaimer: 1. On car deals I squeeze the last nickel until the buffalo screams, and 2. I scrutinize my deals on a spreadsheet until I make every number match the agreed-upon offer to the penny.

So, in an email exchange with the Sales Manager prior to delivery of my latest acquisition, I question the amount he has for DMV -- he says it's $541 and I have it at $511. I double-check my DMV numbers with the DMV official web site, twice, and both times it comes up $511. I email screen shots of the DMV calculations and the SM emails me back stating he ran the deal through his computer program again for me and it came up $541. I email him back saying "no problem," and he emails me saying I will not be overcharged.

On delivery day, the SM is not in the house and, after waiting too long for the Finance guy, we go into the office and do a fast review of the paperwork, and I see that the bottom line numbers match the deal the SM and I had agreed to. We sign and drive off happy to be out of the vending machine environment of the BMW Center.

That night I am going over the paperwork prior to placing it in my file and I notice that the detailed breakout of the numbers shows $511 for DMV plus $30 for a document transfer fee, which, combined, gets us to the $541 the SM quoted me as the DMV fee.

Okay, my wise spouse says let them have their thirty bucks. We got an aggressive deal on a one-off custom color that the SM arranged for us and the car was flawless upon delivery.

I have learned that the SM wasn't dishonest -- his computer desking program automatically adds the $30 document transfer fee into the DMV so it shows up as a single combined number on his deal sheet. Or so I have been told.

If true, SOMEBODY programmed it that way. So, $30/deal with, say 1,000 deals/year, is 30 grand extra, to cover any doc transfer costs, on top of the $85 doc fee.

I don't begrudge the $30. I want the dealer to be profitable. But how many times do dealers need to hear about consumer resentment over hidden fees and charges. I mean, new car smell intoxication only goes so far. The smell wears off. The bad taste lingers.

There. I almost feel better. Almost.
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  #50  
Old 10-25-2019, 03:23 PM
namelessman namelessman is offline
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The whole retail model in auto sales is in a state of chaos currently. The push towards the "No-haggle/one-price" model is on. Dealers now fight each other to chase down stair-stepped volume bonuses.. That means going below invoice to meet target objectives set by mfr., HOPING to hit bonus tiers and recover said losses.
This is evident from local dealers too. And in that regard, the volume leader(similar to Greg) in each dealer has tremendous clout and induce resentment among sales, but GM/GSMs lean on these volume leaders to pop the crawl charts(daily/weekly/monthly/quarterly/yearly, etc, etc).
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