BimmerFest BMW Forum banner

1 - 14 of 14 Posts

·
Registered
Joined
·
94 Posts
Discussion Starter #1
So, I'm in the market for a CPO vehicle which came off of lease and was serviced by the dealer I'm buying it from.

One owner. Offering price is about 40k and they took off 1k.

He's telling me that they will only make $2200 off the sale. I find that really hard to believe because it was a leased vehicle. If they were the ones to lease it, do they have to "buy back" the car?

He's telling me they are a few cars shy of their quota for selling cpos. He threw in a tint as well.

My plan is to discuss with the Mrs. and then make him a final offer around 4:30 or 5 tomorrow (last day of month).

I'm thinking another 3k off so 4k in total which is about a 10% reduction from asking price (after taxes).

Advice, thoughts? What was your experience like?
 

·
Registered
Joined
·
7 Posts
I only got 1k off my low-mileage CPO too...asking price was 48k. I was pushing VERY hard for 3k - 4K off, but they just wouldn't have it. I believe it all depends on how long the dealer has had the car for sale. If it's been for sale for a short time and there's been some interest in the car, the likelihood is that they won't budge. I almost walked away but quickly remembered that low-mileage CPO's seem to go very fast, so I pulled the trigger, and 3 years later I'm still not happy about it. I feel like I over-paid for my X5...it still bothers me. Good luck :)
 

·
Registered
Joined
·
94 Posts
Discussion Starter #4
I got about 1000 off. I think 3 k is reaching a bit.
I got 1k off my last CPO and felt like I had more room... They give up the 1k so easily though- makes me think there's more. Maybe 4k is far too much. Thanks for the perspective.

I only got 1k off my low-mileage CPO too...asking price was 48k. I was pushing VERY hard for 3k - 4K off, but they just wouldn't have it. I believe it all depends on how long the dealer has had the car for sale. If it's been for sale for a short time and there's been some interest in the car, the likelihood is that they won't budge. I almost walked away but quickly remembered that low-mileage CPO's seem to go very fast, so I pulled the trigger, and 3 years later I'm still not happy about it. I feel like I over-paid for my X5...it still bothers me. Good luck :)
I'm going to try to find out how long the car has been for sale... Good idea. But as a sale's guy myself, if he's telling me the truth about only making 2200 on the sale of the car I understand.

But I find it really hard to believe- after a car is leased do they have to buy the car from somewhere even if they were the ones to lease it?.

I need to understand the leasing process better.
 

·
Registered
Joined
·
86 Posts
I got 4K Canadian off asking. This is for a CPO 2012 750i leased 1 year ago. 1 owner ,originally sold/leased by another local BMW dealer, not serviced by the dealer i bought from.
They also replaced the rear brake pads, rotors and tires.
I was happy and took the deal.
The used sales manager told me they buy them at auction, BMW internal auction I presumed but don't know for sure. Like I said this was not a car initially sold by the dealer I got it from.
 

·
Registered
Joined
·
94 Posts
Discussion Starter #6
I got 4K Canadian off asking. This is for a CPO 2012 750i leased 1 year ago. 1 owner ,originally sold/leased by another local BMW dealer, not serviced by the dealer i bought from.
They also replaced the rear brake pads, rotors and tires.
I was happy and took the deal.
The used sales manager told me they buy them at auction, BMW internal auction I presumed but don't know for sure. Like I said this was not a car initially sold by the dealer I got it from.
Cool, thanks for the data point!
 

·
Registered
Joined
·
94 Posts
Discussion Starter #7
Working on the math. Found out that they sell the lease to BMW financing, and presumably have to buy the car back from them to sell to me.

At a build price of 58k with the acquisition fee, down payment, and first months payment (normally due at signing I believe?) the monthly payment would be about $629 per month. These numbers I found through finding lease offers for a like vehicle on a BMW dealer site.

After 3 years the total payments on the vehicle are about 27k.

Take that 27k from the original build price of 58k you have 31k left.

Question one- does BMW financing sell back to the dealer at a profit? I would bet yes, but would also bet that they won't answer this. Let's say no though for sake of discussion.

The dealer buys the car at 31k, puts tires on it at cost (MSRP - 18%). Let's add in another 1k.

So, the dealer has 32k in the car. They are selling it at 38k and to me 37k.

I also have a trade- market value is at 18k. They will buy it at 13k. I just put brand new OEM tires and brakes on it about a month ago. They will make a profit there.

BMW Financing will also make a profit.

What do you guys think of this shoddy math?
 

·
Registered
Joined
·
7 Posts
The dealer buys the car at 31k, puts tires on it at cost (MSRP - 18%). Let's add in another 1k.

So, the dealer has 32k in the car. They are selling it at 38k and to me 37k.
I was told by my dealer that the CPO warranty costs 2K-3k, which is why a CPO BMW costs a little more than a non-CPO used BMW. So 32K + 3k = 35K.
 

·
Registered
Joined
·
4 Posts
Typically, the lease residual is somewhere between 60% and 63% for a 3 year lease, depending on mileage in the lease (10K, 12K, 15K). If you can get the MSRP of the car, you can get a pretty good idea of how much the person who leased the car COULD buy the car from BMW after the lease. This should give you a baseline of the price. Of course, we're told that certifying a car "CPO" costs them upwards of $1500 or so...

I just leased my 340i this past weekend and the residual on my car (MSRP $54,025) is $33,496. Also, for me - in addition to the window sticker they had up on the car, the dealer left a clean copy of the window sticker in the case that came with the owner's manual. So, if this was the practice, every leasee would have two copies of the window sticker - and you should have access to the MSRP price.
 

·
Registered
Joined
·
94 Posts
Discussion Starter #10
Thought the correspondence would be helpful for the group.

My email:
The vehicle looks great! Exact combo she wants for the color.

My wife and I discussed it, and we decided that we are not willing to move forward. Since you're only making $1200 off the deal that's offered, I don't see a path for coming to terms today. Pepper that in with a 14+ hour round trip.

His email:
That is unfortunate. I hope you can find the vehicle closer to home! Let me know if you need anything in the future.

My email:
Thanks. Good luck!

His email (1 hour later):
Would hate to lose a deal if we are close, my preowned manager offered another $500 off if we can agree to everything today.

My email:
Thanks for the offer. I just don't see a path, unfortunately. I feel like between the financing and trade-in you'd have more room. I was too optimistic.

I come from an industry where I sell software- we have a tremendous amount of flexibility. Way more than 4%...

Again, appreciate your willingness and the offer.

His email:
With pre-owned vehicles, it's very much dependent on each individual vehicle. What it needs for certification, reconditioning, etc. I've had cars with $5k in margin, and ones with $500. This vehicle being as clean and unique as it is, we paid more than the typical X3. In the end, we just try to price fairly for the market. If somehow this vehicle doesn't sell after some time, and they want to take a break-even deal, I'll let you know.
 

·
Registered
Joined
·
25 Posts
My wife worked as a Finance Manager for a large BWM dealership in PA for several years. Low mileage CPO BWM's sell quickly. Also, you indicate that you have a 14 hour round trip to acquire the car. This gives the dealership almost no incentive to give you a better deal because they have zero chance of establishing a relationship with you. You aren't going to take the car back to them for service. You aren't going to purchase parts from them. Also, they know they will never sell you another car. If they are going to give anyone the kind of deal your looking for on a CPO car it will be a long time customer who they know and have that type of relationship with.
 

·
Registered
Joined
·
573 Posts
Thought the correspondence would be helpful for the group.

My email:
The vehicle looks great! Exact combo she wants for the color.

My wife and I discussed it, and we decided that we are not willing to move forward. Since you're only making $1200 off the deal that's offered, I don't see a path for coming to terms today. Pepper that in with a 14+ hour round trip.

His email:
That is unfortunate. I hope you can find the vehicle closer to home! Let me know if you need anything in the future.

My email:
Thanks. Good luck!

His email (1 hour later):
Would hate to lose a deal if we are close, my preowned manager offered another $500 off if we can agree to everything today.

My email:
Thanks for the offer. I just don't see a path, unfortunately. I feel like between the financing and trade-in you'd have more room. I was too optimistic.

I come from an industry where I sell software- we have a tremendous amount of flexibility. Way more than 4%...

Again, appreciate your willingness and the offer.

His email:
With pre-owned vehicles, it's very much dependent on each individual vehicle. What it needs for certification, reconditioning, etc. I've had cars with $5k in margin, and ones with $500. This vehicle being as clean and unique as it is, we paid more than the typical X3. In the end, we just try to price fairly for the market. If somehow this vehicle doesn't sell after some time, and they want to take a break-even deal, I'll let you know.
Well done.

I never pay to attention to people who chide me for low-balling.

Offer what you're willing to pay and let him catch up to you--this is exactly what's being done now.

I personally wouldn't respond to his last email. Go silent. He'll either meet your expectation or you can choose to accept his offer when you're willing.

I bought 2 BMW's last year and I can tell you that they WILL usually do what they can to meet your terms, but they will take their time. The BEST thing you can do is stand up, walk away, and say, "Thank for trying." Or you can just ignore the email, which will intensify the urgency to close the deal.

Sooner or later his sales mgr.'s gonna tell him to just sell the vehicle.

On my CPO X5 I negotiated on price and they agreed to throw in a BMW OEM bike rack (which I later find out costs $500-$1000 on the Internet). If I were you I'd ask them to throw in free scratch-and-dent removal. Because they're gonna try to nickel-and-dime the hell out of you when you go to sign the paperwork.

Time is on your side, though. The longer you no-reply, the more willing he'll likely meet your demands.
 

·
Registered
Joined
·
1,272 Posts
My wife worked as a Finance Manager for a large BWM dealership in PA for several years. Low mileage CPO BWM's sell quickly. Also, you indicate that you have a 14 hour round trip to acquire the car. This gives the dealership almost no incentive to give you a better deal because they have zero chance of establishing a relationship with you. You aren't going to take the car back to them for service. You aren't going to purchase parts from them. Also, they know they will never sell you another car. If they are going to give anyone the kind of deal your looking for on a CPO car it will be a long time customer who they know and have that type of relationship with.
Excellent post and spot-on for context. A good reality check.
 

·
Registered
Joined
·
727 Posts
Just my .02, before buying a CPO look at what KBB or Edmunds says the car can be bought for private party and price the car locally private party to set a base. Factory coverage transfers so the benefit of CPO is the extended coverage that comes with the car. Shop around and see what comparable 2 year 50k mile extended will coast you. Add up private party price and cost of extended to compare against CPO pricing.

Unless you are after a very rare car traveling 7hrs one way is not advisable or in your own best interest! After a 7hr drive you have too much vested in the deal and might settle to avoid a long drive home empty handed. You also will be less likely to take the car back in the event of discrepancy's not covered by warranty.
 
1 - 14 of 14 Posts
Top