06-11-2012, 10:15 AM | #1 |
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Dealer Margin - anyone know how it works?
I’ve been told that the actual invoice price to the dealer is usually 18% below the MSRP. 8% is the bare minimum that the dealer will make on the sale, and the other 10% is dealer + sales commission share (hence why they’re willing to negotiate partially here).
In a nut shell, you should be able to push for 8% off MSRP, and the dealer and CA both still make some money. Can anyone confirm this (for Canada anyway)??? |
06-11-2012, 10:26 AM | #2 | |
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Its impossible to get anything over 7% off MSRP. There are a few people that might be able to push for 7.5% but thats because they either went with more than one car purchase or they know the Dealer Principal. Trust me, I did a lot of research and know the exact figures! Either way, if you can get anywhere between 5% to 7% off MSRP, consider that a job well done! Let me know what you get in the end... Good Luck!
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06-11-2012, 11:29 AM | #4 | |
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They buy the cars 8% below their sticker price or MSRP. You can fully get the whole 8% off, believe me they'll do it! I got 7% off, though I may try to get another 1% off. So I also got a $1000 loyalty credit and $750 delivery credit. Therefore I got my car way below invoice! Im sure im not the only one who got their car below invoice, its pretty common...so clearly selling cars is not a money maker, but all the service station and all the bs they try to sell you like tints, protection products etc Sort of like how movies make no money on ticket sales, just popcorn, soft drinks etc or like car rentals make no money or maybe even loose money on rentals, but they try to upsell you insurance and other crap etc Anyways the biggest money maker for BMW is BMW Financial Services! with 4.9% lease rates you can just imagine the profits..just like how a bank profits. So in the long run its actually a huge loss to not honor 8% off MSRP and possibly loose a client to say Mercedes or Audi Etc. Although most people will settle for 7% which is still awesome. Also, many people will be happy with a small discount which balances out the bigger discounts to fussy clients like most of us on this board
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Last edited by bosz; 06-11-2012 at 11:35 AM.. |
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06-11-2012, 12:31 PM | #5 | |
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06-11-2012, 01:16 PM | #6 |
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You will get what you pay for. The CA works on comission and once your blow out of a deal drives away don't expect too much help after the sale. It might be worth the extra 10 dollars a month to create a relationship at a dealer and have someone on the inside goin to bat for you when you need something extra
Just my two cents
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06-11-2012, 01:20 PM | #7 |
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Just because you buy a car from a dealer, that doesnt mean you will service it there. If the dealer is losing money at 8% off msrp, their sales department will not be in business for much longer. Not everybody lease their cars so the high BMW finanace rate will not make up the difference on every sale. Even at invoice price, the dealer still makes a couple of thousand dollars and that doesnt includes the factory bouns for meeting certain sales goals.
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06-11-2012, 02:25 PM | #9 | |
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X Men - from what I understand, the dealer tacks on 8% ontop of true dealer cost (the few thousand you refer to above), and then another 10% for the sales incentives to get to MSRP. So, negotiating 8% off of the 10%, dealer + CA are still making quite a bit of money. Can you confirm this? |
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06-11-2012, 02:47 PM | #10 | |
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This definitely is not the case! Unless the person I know, very very senior individual at BMW of Mississauga lied to me. I dont think he did, hence I'm going to keep my belief in that the dealers make 8% out of which they are willing to negotiate to a MAXIMUM of 7% off MSRP...you'll be EXTREMELY lucky to get anything more...7.5% is given very rarely and only to those who are repeat buyers. I know several people who got 7% + $750 off MSRP and there were a few (very few) that got 7.5% + $750 off MSRP. Just order the car, negotiate as much as you can and enjoy your BMW when it arrives. You want to get the car ASAP and have fun driving the ultimate driving machine........
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06-11-2012, 03:09 PM | #11 | |
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06-11-2012, 03:21 PM | #12 | |
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http://www.truecar.com/prices-new/bmw/3-series-pricing/ |
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06-11-2012, 03:23 PM | #13 |
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It's the loyalty program. Only applies if you pick the car up before the 31st of July.
I'm quite casual with my dealer and know a lot of good guys at BMW of Mississauga; I was told (may be wrong) that the residuals may get worse for 2013. He did promise me that at time of delivery if the residuals get better or there's a better deal, he'll give me that in cash! You might want to verify this...
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06-11-2012, 03:47 PM | #14 | |
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06-11-2012, 03:49 PM | #15 |
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I'm getting my car for invoice so the dealer must be paying less than invoice for the car. I'm located in BMW land (aka California) so maybe the competition out here is tough and dealers live off smaller margins...
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06-11-2012, 04:27 PM | #17 |
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the $750 was a special for any f30 ordered in May.
the loyalty credit is $1000 and applies if you purchased or financed a bmw previously. so some ppl like myself got both so another $1750 on top of 7% off!!
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06-11-2012, 04:41 PM | #18 | |
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06-11-2012, 04:44 PM | #19 |
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06-11-2012, 04:51 PM | #20 |
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06-11-2012, 07:37 PM | #22 |
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