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I've been shopping for 2011 E90 328i for about a week now.

All the dealers in my vicinity say 328is are selling like pancakes and they cannot go below invoice (before incentives of $2500) and in addition they charge 0.0004 markup on the MF. :mad:

Is this normal at this time of season when F30 will be out in 3 months? :dunno:
 

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Yeah, sounds like bs to me. Try a forum sponsor or a non-local dealership. I tend to have a similar problem with the local guy, they are too used to people just walking in and paying whatever it takes, so my last 2 cars were from out of town. One 60mi away, one across the country :) Makes for a great road-trip!

On the other hand the local service department is top-notch and I let them know that!
 

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I've been shopping for 2011 E90 328i for about a week now.

All the dealers in my vicinity say 328is are selling like pancakes and they cannot go below invoice (before incentives of $2500) and in addition they charge 0.0004 markup on the MF. :mad:

Is this normal at this time of season when F30 will be out in 3 months? :dunno:
Where are you located? Honestly, if you are buying a car for invoice, what is so wrong with at least the F&I Manager earning a paycheck?

This is a serious question. Consider for a moment the fiscal health of a BMW dealership. How long do you suppose they can afford to operate (keep the doors open)
without making a real profit? This is a real concern that I don't think people consider, and would be an interesting discussion point. That's not to say that I think
Bimmerfest members shouldn't get kick-a$$ deals on their cars.
 

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Launch Control Ready
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It is a business - sometimes you lose money. Supply and demand...if there is a ton of supply out there...well...

Show me one business that ALWAYS makes a profit off EVERYTHING they sell...
 

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+ a car's invoice price is not always the actual dealer cost.

If they are willing to let it go at invoice they probably have additional profit in there through incentives.
 

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Greg Poland Pacific BMW
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MB42 what city and state are you in?
 

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It is a business - sometimes you lose money. Supply and demand...if there is a ton of supply out there...well...

Show me one business that ALWAYS makes a profit off EVERYTHING they sell...
Well, up until recently, BMW dealers never needed to lose money to retail a vehicle.

That's all I'm saying -- no judgement involved, just reporting the facts.

Yes, there is what BMW calls the "Added Value Bonus" but strict requirements must be met in order to get paid on this. And any deal that goes down below invoice is shown in the books is a "loss" despite the possibility of being paid this bonus. BMWNA did away with traditional "Holdback" about a decade ago...

I am just the messenger, please don't shoot me.

+ a car's invoice price is not always the actual dealer cost.

If they are willing to let it go at invoice they probably have additional profit in there through incentives.
Yep, there is factory-to-dealer money on this model. The original poster did not specify whether or not this was factored in. I suspect it was as we are blowing out our remaining 2011's below invoice, with the "trunk money" obviously figured in. I am assuming that when the OP says invoice, he really means invoice less incentives...

Hopefully this clarifies what I meant above.
 

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Greg Poland Pacific BMW
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Well written Jon!
 

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Launch Control Ready
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Well, up until recently, BMW dealers never needed to lose money to retail a vehicle.

That's all I'm saying -- no judgement involved, just reporting the facts.

Yes, there is what BMW calls the "Added Value Bonus" but strict requirements must be met in order to get paid on this. And any deal that goes down below invoice is shown in the books is a "loss" despite the possibility of being paid this bonus. BMWNA did away with traditional "Holdback" about a decade ago...

I am just the messenger, please don't shoot me.
No offense intended to any of our fine board CAs...was just simply making an observation that businesses do lose money sometimes...would think that is a fairly obvious fact of life especially in light of the last three years or so.
 

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Where are you located? Honestly, if you are buying a car for invoice, what is so wrong with at least the F&I Manager earning a paycheck?

This is a serious question. Consider for a moment the fiscal health of a BMW dealership. How long do you suppose they can afford to operate (keep the doors open)
without making a real profit? This is a real concern that I don't think people consider, and would be an interesting discussion point. That's not to say that I think
Bimmerfest members shouldn't get kick-a$$ deals on their cars.
This goes down that bunny trail of what is a fair profit for a dealership?

Dealerships never want to give out what they really make on a car, so why shouldn't the buyer want to pay less?

I think the industry would be best served if they went to fixed pricing as mandated from the manufacturer.

The transparency a dealership lacks creates the tensions that both car salesmen and buyers despise.
 

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price negotiation looks like a zero sum game unless there is to be an ongoing relationship between the dealership and the customer. in the former case, e.g. a distant dealer, then absolutely minimize your price as a buyer. in the latter case, e.g.where you plan to return for service and hope to be treated fairly yourself, the goal is finding an agreed upon definition of fairness.

i'd be interested in member ca's notions of how to determine a "fair" deal.
 

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we are blowing out our remaining 2011's below invoice, with the "trunk money" obviously figured in.
Are the end of year incentives I see on 2012 models, specifically the 5 series, also available on the 2011 models (e.g. finance credit, nav credit, loyalty credit)? My dealer said he can actually give me a better deal on the 2012 model, which seems odd to me.
 

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Are the end of year incentives I see on 2012 models, specifically the 5 series, also available on the 2011 models (e.g. finance credit, nav credit, loyalty credit)? My dealer said he can actually give me a better deal on the 2012 model, which seems odd to me.
He is telling you the truth...

:angel:
 

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A .0004 markup on the money factor is money, it would have amounted to $1330 over the 36 month lease term on a recent lease I did. Why should the finance guy or gal make more in 10 minutes than the CA did selling the car ? That makes no sense. I'm OK with $200 on the lease fee and no money factor markup. Another thing is the .0004 markup was maybe a 15% markup on the interest rate when rates were higher, now it is often a 50% markup or more.
 

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I know a thing or two...
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A .0004 markup on the money factor is money, it would have amounted to $1330 over the 36 month lease term on a recent lease I did. Why should the finance guy or gal make more in 10 minutes than the CA did selling the car ? That makes no sense. I'm OK with $200 on the lease fee and no money factor markup. Another thing is the .0004 markup was maybe a 15% markup on the interest rate when rates were higher, now it is often a 50% markup or more.
point is that you have to let the dealer make a little bit of money somewhere on the deal. :dunno:

so maybe it is not a full rate mark-up and instead it is a more realistic selling price. The OP is asking for below invoice pricing on something that is an outgoing model but is not "damaged goods" so to speak. I'd imagine that a dealer should still be able to get at least invoice, if not $250-$500 over. If he wants to buy it below cost, he needs to give somewhere.
 

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My beef is not with the total amount of money, it's with the distribution. If the dealership is going to make $1000 I'd rather the CA side got $800 and F&I $200 than the other way around. I'm speaking in generalities here not with the OPs specific deal. I realize the CA gets a mini either way. Many people grind the CA down because they know ( or think they do ) the numbers but the F&I costs are usually a mystery. Money factors are not readily available and the average lease customer wouldn't know the lease fee either.
 

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Greg Poland Pacific BMW
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I can respect that Mc Claren... That is the way to look at it from my side..... as we the CA's sometimes work a deal forr days, weeks to close a sale after being ground down to a small commission.
 

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.0004 may be a bit excessive, but I encourage everyone to consider what's involved with contracting and funding, which is how a F&I manager gets paid. Some deals are a slam-dunk, piece of cake, while others take days of chasing stips (proof of residence, proof of insurance, proof of income), but more importantly, is the job of getting the deal bought by the bank and funded. With the economy being what it has been, many buyer's credit histories now have a bit of tarnish on them, and whereas they may have been "gold" 3 years ago, there now exist a couple of slow pays, a collection account perhaps, unpaid medical bills, a tax lien, you get the gist. F&I managers work on commission too, but at a much lower percentage than a CA. I am not justifying it, just suggesting that there is more to the picture than meets the eye. Somewhere there exists a "sweet spot" -- that place where the customer gets a great deal, and everyone earns their fair share for their efforts in delivering a great purchase experience for the customer.

I doubt most here realize, but it is a blessing to buyers that BMWFS caps the rate mark-to .0004.

Do you know what other lease sources allow the money factors to be marked up?

Try .002. That is the industry standard. A LMF can be marked up to .00395 from .00195. Serious gouging...

Prior to "Regulation M" (1997?) most leases were undisclosed, meaning lessees were not even told what the cap cost was.
All they were signing for was a monthly payment and a residual value. Maybe some days LMF's will be required to be disclosed on lease contracts.


+++++++++

EDIT:

Nobody pays much attention to it nowadays, but it is also SUPER COOL that BMWFS no longer requires a security deposit. For years, a security deposit (monthly payment rounded up to the nearest $50 increment) was standard. Later, a waiver program was added for returning BMWFS lessees in good standing. Today? No security deposit required on BMWFS leases.

Now, what about the bank fee? When I started with BMW the second time in my career -- in 1995 (I sold new BMWs briefly in 1987), the acquisition fee was only $425. A couple of years later? $475. Then $525, and later $680. It now rests at $725.00. BMW caps the amount that it can be marked up $200, of which the dealer gets paid a 70% commission). Perhaps this eliminated the need for a security deposit?

:dunno:
 

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E92 M3 ED on 2/20/12!
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I wish most CAs were like the ones on this forum. The ones down here can't be bothered. They don't know anything about financing or leasing and many times they don't know much about the car either. I had a dealer tell me that they could order a 2011 M3 Sedan after production stopped. Seriously, there must be too many people who just walk into the dealership and pay whatever is asked in South Florida because the rest of us are treated like the dealership is doing us a favor. I was told I was a difficult customer because I asked the CA to search for a specific option combination before ordering a new one. Sorry to unload; it's actually meant to be a compliment to the CAs on this forum who provide such useful information and are willing to explain what others can't or won't. Thanks!

Mikla
 
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