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2010 2011 BMW 5 Series Forum F10 The Mercedes dealer wouldn’t budge from MSRP on a GLE 63 S |
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01-27-2021, 05:33 PM | #45 |
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01-27-2021, 06:57 PM | #46 |
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Just for reference, on an x5mc I am being offered a money factor of. 00086 which equates to about 2.064%
On the Mercedes they started with 8.2% and lowest they will go is 5.88%. It just doesn't make sense to lease this car, I would be better off paying cash. We typically lease for convenience and not really wanting to own these cars past three years, but there is only a certain premium I would pay for that. I did mention to the Mercedes guy today that I am contemplating paying cash and he started fumbling a bit. He didn't seem happy with that scenario. Also when mentioning the BMW mf, he went on how bmw's are a dime a dozen and you see them everywhere. This guy seems to be convinced he is selling exotic cars. |
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01-27-2021, 08:10 PM | #47 |
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BMW corporate makes money on leases on interest rate spread, and the BMW salesperson makes commission on leases. Buyers paying cash generally mean less profit in a transaction.
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01-27-2021, 10:22 PM | #48 |
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01-28-2021, 07:59 AM | #49 | |
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Kroger, tire stores, Lowes, all of them buy from someone and then set their own pricing. Their goal is maximizing profits. Strange that every other store in your view is maximizing profits while only dealers are in it for greed. Having the manufacturer recommend a price doesn't change the goal or how they go about it. When the car dealer gets a new car with an MSRP he figures out if the MSRP is realistic and goes from there. Forums believe anything below MSRP is just business, anything at MSRP is greed. We are the manufacturer of the heavy equipment. Management (technically me now as I am not selling direct) tells us what they hope to get for a new product, this is Manufacturers Suggested Retail Price, we then figure out if we are right or wrong. As always the market sets the actual selling price. We don't get to say, "well the MSRP is $X" stop complaining no one will buy it as we set the price". With the "It's more of an American thing to get big discounts on vehicles and as we Canadians don't have the same amount of haggle room." - Dodge Canada site - https://www.dodge.ca/en Every dodge on the page comes with a discount off MSRP, averaging about $5k per car. Is this put on the car or do you need to know this as part of the negotiation? If on the car seems difficult to constantly change it as the manufacturer continues to change the MSRP.
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Last edited by David70; 01-28-2021 at 08:06 AM.. |
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01-28-2021, 08:07 AM | #50 |
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It is getting a bit stupid. Dealer down the street had a GT350 last summer, sitting there a while, I said look I have never driven one, give me 5 mins int he car so i can see if it is for me. NO TEST DRIVES. I'm like what? Said you have to agree to buy pending inspection or no test drive. I am not buying a $65K car without driving it, I am just not..... it's a fucking ford ffs.
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01-28-2021, 08:09 AM | #51 | |
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I wonder if they are looking at the ICE vehicles being worthless in a few years since they are getting so heavily on electrification? All I know is that leases on ‘comparable’ level vehicles are hundreds of dollars more at Audi now. On the message boards, people are talking about A4 lease turn-ins where people are looking for the same model A4 3 years later and the lease is hundreds more as well. And if you want to lease a loaded (Prestige) trim car, they whack you 2% on the residual. I realize that people buying used probably won’t pay the difference for the higher end features vs the ‘standard’ Premium trims but it forces a lot of people to not lease because the monthly payment is much higher than the competition’s similar cars. I’m not saying the luxury car market needs leasing to be successful but if you look at Audi’s sales last year, they weren’t as successful in terms of growth/loss compared to the year before as BMW. I think they are making the bet against leasing but who knows. MB may or may not be doing the same. Let’s face it, we all pay more for our BMWs to cover the expected losses that come with leasing. We’re all just financing those residual value losses. In terms of MSRP, car dealers and manufacturers have set up a system where the entire process is built on a lack of trust. Consumers don’t trust the sales person and dealers, the sales people don’t trust buyers, etc. I’ve seen dealers try to do the ‘one price’ approach and have it fail miserably. Because MSRP is basically a joke, and invoice pricing now is not much better, everyone feels like they have to go into battle when they buy a car. Sorry, not everyone, but I think there is a bell curve of sheep, assertive and then aggressive shoppers and the curve skews way into assertive and then aggressive for the volume and sheep for the profit. It is set up to grab as much volume from the sheep to make more money per car and then bump up volume with discounts for the assertive/aggressive buyers (bonuses, holdback, etc). With a moving target, there is no way a reasonable person knows what a ‘fair price’ is. So folks like us try to get an idea by reading experiences on these boards and many,many others have no idea. The assertive/aggressive folks get mad if they don’t get the same discount as someone posting here (and not everyone even understands the total cost of their deal so how do you discern those posts??). The market is a mess and the dealers and manufacturers like it that way. There is obfuscation at every level: sales price, financing, warranties and service plans, etc, etc. It is not a good model so most people detest the process. And if you are lucky enough to have more competition in a market with multiple dealers with the same manufacturer, they either deal in price fixing or you can get a more fair price due to the competition - again, depends a lot on which market. Luckily, I have 5-6 dealers that are within a 1 hr drive so competition is fairly healthy. I also like that BMW had a VERY reasonable money factor. It is evident that they are still in the lease game. MB may be going the way of Audi - away from leasing toward a finance model or they may just be doing that on the GLEs because of popularity. Time will, tell which bet works best for the manufacturers but for now, I would look at the overall cost of whatever you are doing - lease or purchase - and if you can’t get it locally, go to the MB boards and see where people are getting the best deals and see if you can do an internet transaction with delivery. Might be worth it. I will get off my soap box now but this entire model is such a joke. For many people, they actually like the ‘game’ (I’m a bit sick because I am one of them) but there are plenty of people that just don’t have the desire or ability to do that and they are keeping prices lower for all of us since they provide the profit the dealers need. Rant off . . . |
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01-28-2021, 08:23 AM | #52 | |
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Showing volume growth may or may not mean you are doing things well as you can always increase volume through pricing or cheap leases. GM had huge volume right before they ran out of money in 2007/8. There is no pricing strategy a car dealer can come up with that makes everyone happy. People don't want an ok deal, they want a great deal. Selling everything at MSRP wouldn't make most happy, same with "X% off MSRP" If you want an ok deal with no hassles go through a buying service (Costco, Truecar, others), few do it because as bad as the current system is we know if we deal with it correctly we are likely to get a better deal. Then, if you have a trade, all of this falls apart as you have to figure in this variable also.
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Last edited by David70; 01-28-2021 at 08:38 AM.. |
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01-28-2021, 11:39 AM | #53 |
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01-28-2021, 05:48 PM | #54 | |
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On your point about residuals, Audi sets them very realistically so the lease payments are higher but they don’t get stuck with upside down turn ins that they have to offload for a loss. BMW artificially inflates their residuals so the lease payments are less realistic (aka lower) and it actually encourages leasing a new vehicle at lease end since the value will almost always be upside down. Trust me, the price of the car has revenue built in for those end of lease ‘losses’. That’s what I meant when I said everyone pays for that, even if they are financing or paying cash. It’s all a shell game - you just have to be aware of which shells have which costs and how they fit into your goals. |
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01-29-2021, 05:23 PM | #55 | |
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Look at Porsche, their cars hold great value so they are able to charge high interest % and still make it "attractive" though their residuals are still lower than market values come lease return time. But they dont want to flood the market with great leases which in turn then push the market values down. My point is its not a zero sum game. A manufacturer wins when the market perceives their cars as retaining good value.
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01-29-2021, 07:55 PM | #56 | |
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BMW subsidizes/incentivizes the residual value knowing that it will make the turn in differential expectedly worse but they factor that into the MSRP on the cars to help offset that expected expense. I agree that the market will determine the true value, but the manufacturers set a residual value based on what they expect will happen and then any incentives to balance that with lower monthly payments to help move cars. Either way, I think we’re saying the same thing. I feel like we hijacked this thread enough Cheers! |
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02-02-2021, 09:38 PM | #57 | ||
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02-02-2021, 09:42 PM | #58 | |
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This has never been different. Audi and MB lease like shit.
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02-02-2021, 11:23 PM | #59 |
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Bought a few cars from them in the past, I know the GM. Braman Miami is a different story all together - they want all the money. Ironically I have bought several cars from them as well. There are times one has to be prepared to walk away. I guess the crazy thing is Braman Miami and Braman Palm Beach act like they aren’t affiliated. MBZ dealerships some are certainly better than others...
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