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Price of E90 volatile?

1176 Views 13 Replies 6 Participants Last post by ecdysiast, Apr 26, 2005

Greg220

Discussion Starter · Apr 20, 2005

I am doing an ED with a nice dealer who agreed to do $XXX over invoice. What worries me is that he said that if the prices change before I take delivery, the amount I owe will change for that amount as well. Is this right or the price should be fixed once the order is placed?

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The Other Tom

· #2 · Apr 20, 2005

Greg220 said:
I am doing an ED with a nice dealer who agreed to do $XXX over invoice. What worries me is that he said that if the prices change before I take delivery, the amount I owe will change for that amount as well. Is this right or the price should be fixed once the order is placed?

The price will probably change in the fall of this year ,BUT....you have to pay for your ED car before you leave for Europe, so no worries, mate.

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Greg220

Discussion Starter · #3 · Apr 20, 2005

The Other Tom said:
The price will probably change in the fall of this year ,BUT....you have to pay for your ED car before you leave for Europe, so no worries, mate.

If I may ask... Why do you expect the price to change in the fall? Would it be up or down?

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beewang

· #4 · Apr 20, 2005

Greg220 said:
If I may ask... Why do you expect the price to change in the fall? Would it be up or down?

Greg, Dude...Pricing of ALL goods goes up, its called inflation. Furthermore, to complicate the matter, you must also factor-in the decline of dollar (vs. Euro). As all international corporations, BMW does have (to a certain extend) hedged currency future contracts to minimize their loss to currency fluctuation. However.... Do to the fact that BMW hasn't had a major price increase in the last 3 yrs, its a safe bet that they are going w/ a "steady increase" strategy. So in short, I am almost CERTAIN that the pricing of the car will go up in the fall.

So in short, when BMW proceed w/ the price hike this fall, your dealer's cost (aka COGS) goes up and thus your price will go up. Seems pretty fair to me as he agreed to sell the car to you at XXXX above his cost. His profit margin is fixed, he is only passing to you what his coast is, so why would you think it should be fixed??!! :dunno:

Hope this helps,

beewang :bigpimp:

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Greg220

Discussion Starter · #5 · Apr 20, 2005

Thank you Beewang for your comment. I know that the dealership has an agreement for "New Vehicle Order" with itemized model, options and prices. But perhaps they don't use it in case of ED? It seems I have no document which states how much money I owe...

When should I receive the invoice? Is it possible to pay for the car earlier than one month before pick-up?

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beewang

· #6 · Apr 20, 2005

Greg220 said:
.....Is it possible to pay for the car earlier than one month before pick-up?....

You can always pay early (like right now!) if you'd like. But it does NOT lock the price-in on a XXX amount over invoice deal (which is what I think you are getting at). OTOH, if you negotiated a deal based on "... I'll pay you $40k for the car..." then the dealer will negotiate the deal accordingly and once agreed on the selling price, will take increase in price hike as a squeeze on their margin. Perhaps you perfer it this way??

cheers,

beewang

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Wallenrod

· #7 · Apr 20, 2005

Greg220 said:
I am doing an ED with a nice dealer who agreed to do $XXX over invoice. What worries me is that he said that if the prices change before I take delivery, the amount I owe will change for that amount as well. Is this right or the price should be fixed once the order is placed?

Just read again what you wrote and I'm sure you'll get it.
You negotiated X amount over invoice so if the invoice changes you will owe X amount over the newly changed invoice to your "nice dealer." It really is not rocket science nor does it have anything to do with BMW pricing strategies - it's pure logic.

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Greg220

Discussion Starter · #8 · Apr 20, 2005

Wallenrod said:
Just read again what you wrote and I'm sure you'll get it.
You negotiated X amount over invoice so if the invoice changes you will owe X amount over the newly changed invoice to your "nice dealer." It really is not rocket science nor does it have anything to do with BMW pricing strategies - it's pure logic.

I was never confused with this logic. I just thought that once the order is processed by BMW NA the price would be fixed even for the dealer's protection if not anything else. Otherwise, dealers themselves would risk not knowing their profit until the car is delivered 3 months later.

Just to understand it completely - when exactly should I get the invoice with the final pricing?

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Wallenrod

· #9 · Apr 20, 2005

Greg220 said:
I was never confused with this logic. I just thought that once the order is processed by BMW NA the price would be fixed even for the dealer's protection if not anything else. Otherwise, dealers themselves would risk not knowing their profit until the car is delivered 3 months later.

Just to understand it completely - when exactly should I get the invoice with the final pricing?

Dealer is fully protected if you guys have an X over invoice price. Why would he/she worry about BMWNA price change in this arrangement. You took that risk on yourself.

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Greg220

Discussion Starter · #10 · Apr 20, 2005

Wallenrod said:
Dealer is fully protected if you guys have an X over invoice price. Why would he/she worry about BMWNA price change in this arrangement. You took that risk on yourself.

In my last message I meant a case when the dealer takes the risk and sets the price with a customer. It seems odd they would be okay risking their profit in case the price goes up by a few percent between the time they submit the order and the time the car is shipped.

I can't think of any other example where a customer orders something and wouldn't know the price until it's delivered (carpets, furniture, etc. you always know the price even if you need to wait for production and delivery).

Please, don't misunderstand me again. I am not complaning. I am just trying to understand why this procedure is an exception from all other forms of ordering from the manufacturer...

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The Other Tom

· #11 · Apr 20, 2005

Greg220 said:
If I may ask... Why do you expect the price to change in the fall? Would it be up or down?

BMW typically makes changes to their vehicles in the fall and the spring, usually accompanied by a price change (up). Sometimes an option is included as std and the base price goes up. Overall, this could be considered a no price change, or sometimes an overall price decrease. You just have to see what you're getting and what you're paying. The change is usually small either way.

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Greg220

Discussion Starter · #12 · Apr 25, 2005

I still have one question: what triggers the dealer to request a payment from me and makes the car price final? Is there some invoice sent from BMWNA to the dealer at some point (that the dealer is awaiting before he can charge me)?

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Ågent99

· #13 · Apr 25, 2005

Just to throw a monkey wrench into the deal, the price of the 545i from (I'm guessing) January 1, 2005, to February 28, was actually HIGHER than the price that was published for March 1 on!

Now, logically, this isn't a huge surprise since BMW is trying to move out all the slow 545i cars.

I negotiated $Y over euro invoice roughly in mid-February but then noticed the price changed on March 1. Even though I didn't pick up my car until March 23, I still paid the higher price. Heck, I think production on my car was right at March 1. Anyway, I confirmed with the dealer that they are paying the higher price for the car so they aren't getting any more money that what we negotiated. The price change was $520 so it wasn't peanuts....

I think what sets things is the first pieces of paperwork that you sign. You have to sign and pay for things early for ED.

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ecdysiast

· #14 · Apr 26, 2005

Answer the question!

Doesn't seem like anybody's answered Greg220's question, which is, I think, "when do I know the legal and financial terms of what I have to pay for my car?"

Well, Greg220, if you have negotiated a price and have that down on paper on some agreement the dealer printed, look at the terms of that.

If that document doesn't exist or you don't have any other actual sales contract with the dealer, you just have to rely on whatever verbal understanding you reached with the salesperson. Whom you could ask again, now.

In my case my dealer (Passport) sent the formal sales contract, etc., alarmingly close to the day I was to leave for Munich--about ten days before, I think. That was to suggest I pay them before I pick up the car.

If you're worried about the price going up why not pay for it now?

Incidentally, it might not be inevitable that BMW raises prices in the fall. It is really quite amazing to me that the E90 is priced about where the E46 was, and has been for months if not more, while the $/Euro ratio has changed by thirty per cent. Even while BMW was enhancing the equipment (e.g., 6 spd standard on 05 325i).

Ah, what's a few per cent anyway? The fun value is worth it.

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