Staring with model year (MY) 2017 BMW is changing how invoice pricing and dealer compensation works. This has changed the calculations for US invoice pricing and European Delivery pricing, the new calculations are below. Read on to find out why or just jump down to do the calculations. Use our 2017 BMW pricing and ordering guides for MSRP pricing.
Back story on why BMW invoice pricing is changing
Last year BMW NA CEO Ludwig Willisch announced that changes that were coming for dealer compensation. His new plan is intended to move BMW from the bottom of the pile in customer satisfaction rating, especially around service. Under the new plan dealerships can earn up to a 1 percent bonus based on 4 criteria. This was BMW NA's way of providing incentives to dealerships to provided a better customer experience and customer loyalty. That 1 percent has to come from somewhere and we now know it is coming out of the invoice price of the car.
For MY 2016 and prior years the difference in price between MSRP and invoice was 8 percent for the vehicle and 9 percent for options and packages. Staring in MY 2017 the discount between MSRP and invoice is 7 percent for the vehicle and options and packages being 8 percent. In effect BMW has taken 1 percent out of the front end of the deal putting it in the back end of the deal as a carrot for dealerships to chase.
This means we will see deals closer to invoice pricing as dealerships push for volume to hit the back end sales targets. BMW has also increased the holdback (more back end money) from 5 percent of vehicle base cost to 5 percent of the sticker price, giving dealership more room to deal on highly optioned vehicles. What happens in the real market is yet to be seen. As 2017s start hitting the show room stay tuned to find out what Bimmerfest members are getting for deals.
BMW US Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets) multiplied by 0.93
+ MACO fee $500.00 (flat rate applied to all dealers)
= Base vehicle US BMW invoice price
To figure the invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Training fee of $180.00
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00
BMW European Delivery Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets below) multiplied by 0.95 gives you the base vehicle European Delivery price. For those wondering, BMW has redueced the (ED discount from 7% to 5% starting in 2016).
Multiple the base vehicle European Delivery pricing by 0.93
+ $475 fee (this started in 2016 and applies to all dealers)
= Base vehicle European Delivery invoice price
To figure the European Delivery invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00
Big thanks to Bimmerfest member Ninong and others for helping to get this figured out.
Back story on why BMW invoice pricing is changing
Last year BMW NA CEO Ludwig Willisch announced that changes that were coming for dealer compensation. His new plan is intended to move BMW from the bottom of the pile in customer satisfaction rating, especially around service. Under the new plan dealerships can earn up to a 1 percent bonus based on 4 criteria. This was BMW NA's way of providing incentives to dealerships to provided a better customer experience and customer loyalty. That 1 percent has to come from somewhere and we now know it is coming out of the invoice price of the car.
For MY 2016 and prior years the difference in price between MSRP and invoice was 8 percent for the vehicle and 9 percent for options and packages. Staring in MY 2017 the discount between MSRP and invoice is 7 percent for the vehicle and options and packages being 8 percent. In effect BMW has taken 1 percent out of the front end of the deal putting it in the back end of the deal as a carrot for dealerships to chase.
This means we will see deals closer to invoice pricing as dealerships push for volume to hit the back end sales targets. BMW has also increased the holdback (more back end money) from 5 percent of vehicle base cost to 5 percent of the sticker price, giving dealership more room to deal on highly optioned vehicles. What happens in the real market is yet to be seen. As 2017s start hitting the show room stay tuned to find out what Bimmerfest members are getting for deals.
BMW US Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets) multiplied by 0.93
+ MACO fee $500.00 (flat rate applied to all dealers)
= Base vehicle US BMW invoice price
To figure the invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Training fee of $180.00
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00
BMW European Delivery Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets below) multiplied by 0.95 gives you the base vehicle European Delivery price. For those wondering, BMW has redueced the (ED discount from 7% to 5% starting in 2016).
Multiple the base vehicle European Delivery pricing by 0.93
+ $475 fee (this started in 2016 and applies to all dealers)
= Base vehicle European Delivery invoice price
To figure the European Delivery invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00
Big thanks to Bimmerfest member Ninong and others for helping to get this figured out.