2010 2011 BMW 5 Series Forum F10
BMW Garage BMW Meets Register Search Today's Posts Mark Forums Read
 

2010 2011 BMW 5 Series Forum F10 BMW 5-Series (F10) Forums General 5-Series Sedan and Wagon (F10 / F11) Forum BMW Dealer Margins. What are they?
Post Reply
 
Thread Tools Search this Thread
      10-26-2010, 08:01 PM   #1
LLepard
New Member
6
Rep
14
Posts

Drives: 2010 750 xi
Join Date: Apr 2010
Location: Boston

iTrader: (0)

BMW Dealer Margins. What are they?

I am negotiating for a new 5 series.

The dealer says his margin is 7%. Therefore, he will split it with me and take 3.5% off the sticker price.

How badly am I being abused if I do this?

Does anyone know what the dealer margin on a 535xi is?????

Thanks.
Appreciate 0
      10-26-2010, 08:11 PM   #2
pharding
Captain
United_States
111
Rep
977
Posts

Drives: '17 540i x+ '14 X3 28i
Join Date: Mar 2005
Location: Chicago

iTrader: (0)

Yes. The standard is X dollars over US Wholesale Pricing. You need to use the search function and spend the time to read the posts. There is no substitute for doing your homework. Less ambitious people always pay more.
__________________
17 540i x
14 X3
Retired: 14 550i Euro Del; 11 550i Euro Del; 08 550i Euro Del; 06 330i Euro Del; 04 545i Euro Del; 01 530i Euro Del
Appreciate 0
      10-26-2010, 08:31 PM   #3
bobblehead
Brigadier General
bobblehead's Avatar
Canada
212
Rep
4,689
Posts

Drives: warp speed
Join Date: Aug 2009
Location: Toronto, On

iTrader: (0)

Looks like around 8.5% (base) - 9% (with options)


See post #4

http://f10.5post.com/forums/showthread.php?t=372575

or try this ... not sure if it's the same

http://www.kbb.com/new-cars/bmw/5-se...port?id=358184

Last edited by bobblehead; 10-26-2010 at 08:37 PM..
Appreciate 0
      10-26-2010, 10:29 PM   #4
kube
Private First Class
12
Rep
121
Posts

Drives: 2014 535d xDrive MSport
Join Date: Jul 2010
Location: East Fishkill, NY

iTrader: (0)

Not sure what the margin is, but I looked at Edmunds.com on pricing, and did better than their TMV pricing - $1500 over "invoice" pretty much fully loaded
Appreciate 0
      10-27-2010, 11:59 AM   #5
LuvMyE92
Occasionally frequent poster
LuvMyE92's Avatar
United_States
279
Rep
836
Posts

Drives: M2
Join Date: Jan 2008
Location: Cary, NC, USA

iTrader: (0)

I don't do percentages, I do $xx off of invoice. Heck, you could buy the car at invoice and they'll still make around 3% (at least!) if they have a good CSI. We used to call it "holdback" and I don't know what the industry jargon for that is now. But rest assured, the dealer makes a lot more than just the spread between invoice and retail.

Because the market is different in different parts of the country, I also try to compare deals from competing dealers. Surely there are several to chose from in the Boston area.
__________________
F87 (mine)
E90 (hers)
G30 (ours)
Appreciate 0
      10-27-2010, 12:40 PM   #6
grasso06
Enlisted Member
6
Rep
47
Posts

Drives: 2008 528i, 2011 535i (ordered)
Join Date: Apr 2010
Location: California

iTrader: (0)

I spoke with an employee I know who works at a BMW dealership and he said that the invoice price is at least several thousand dollars above their dealer cost. For example, a car with a MSRP of ~$50,000 has an invoice somewhere around ~$45,000, while the actual dealer cost is ~$41,000. He couldn't stress enough that the invoice price is a made up number used as a negotiating tactic. Rarely will dealers ever sell you a car for near their actual cost...both the dealer and the salesperson need to make money! The MRSP price guarantees that the sales person will make commission (over the invoice price) while the invoice price brings profit to the dealer (over the dealer cost).
Appreciate 0
      10-27-2010, 04:59 PM   #7
Touring
Major
Touring's Avatar
Norway
130
Rep
1,007
Posts

Drives: i3,E21,M2,E23, Skoda Kodiaq
Join Date: Mar 2010
Location: Oslo, Norway

iTrader: (0)

Anyway with 3 percent discount or not, the BMWs in USA are extremely cheap. You are lucky :-)

I Norway the cartaxes are almost satanic, you would not believe what a 550ix cost here. More than 200.000 Dollars
Appreciate 0
      06-05-2012, 10:25 AM   #8
Jim Cozzi
Registered
0
Rep
2
Posts

Drives: M3
Join Date: Jun 2012
Location: Bloomfield Hills, MI

iTrader: (0)

Profit on BMW

Quote:
Originally Posted by LLepard View Post
I am negotiating for a new 5 series.

The dealer says his margin is 7%. Therefore, he will split it with me and take 3.5% off the sticker price.

How badly am I being abused if I do this?

Does anyone know what the dealer margin on a 535xi is?????

Thanks.

Your right. It is 7%. Unlike dommestic brands.. BMW does not use holdback money. 7% is it.
Appreciate 0
      06-05-2012, 10:45 AM   #9
Jim Cozzi
Registered
0
Rep
2
Posts

Drives: M3
Join Date: Jun 2012
Location: Bloomfield Hills, MI

iTrader: (0)

Holdback

Quote:
Originally Posted by LuvMyE92 View Post
I don't do percentages, I do $xx off of invoice. Heck, you could buy the car at invoice and they'll still make around 3% (at least!) if they have a good CSI. We used to call it "holdback" and I don't know what the industry jargon for that is now. But rest assured, the dealer makes a lot more than just the spread between invoice and retail.

Because the market is different in different parts of the country, I also try to compare deals from competing dealers. Surely there are several to chose from in the Boston area.

Hold back is money paid to dealership by the factory. BMW does not have or use hold-back money. Some times there can be incentive money like: $1,000 or $1,500 from teh factory to move certain models that may be lagging in sales (ie: coupes or convertibles vs sedans). It could be allocated as conquest money or loyalty money also. Those programs vary from month to month. If the car is low production and hard to get like X3's & X5's you will pay MSRP. Botom line is, there is not a lot of profit on new car sales as most people think. A typical 3 series that retails for $49,000 only has $3,400 in gross profit. If you negotiate $1,500 out, you only saved about $60 on you monthly payment anyway. So let the dealerships make some money! Car buyers get shitty treatment and get what they deserve because most are cheap and won't allow the dealers to make any profit. If a deal is too lean, I would just walk them anyway... so be resonable! Most dealerships make the money back on the back end not on new car sales. They make it on service and warranty work paid by BMW to the dealerships to maintain the warranty.
Appreciate 0
      06-05-2012, 11:05 AM   #10
The X Men
Colonel
85
Rep
2,323
Posts

Drives: 2013 X3 35i
Join Date: Mar 2012
Location: MA

iTrader: (0)

Quote:
Originally Posted by LLepard View Post
I am negotiating for a new 5 series.

The dealer says his margin is 7%. Therefore, he will split it with me and take 3.5% off the sticker price.

How badly am I being abused if I do this?

Does anyone know what the dealer margin on a 535xi is?????

Thanks.
So which dealer did you go to, I hope its not Herb Chamber BMW of Boston, they are the most expensive dealer in MA.
I would say you are getting abused pretty bad. Since there is currently a $1500 option credit offer by BMW USA, the dealer is pretty much selling you the car at MSRP.
The invoice is about 7% off the MSRP, dealer cost is another $1500-$2000 or so below invoice. I recently bought a 2012 535xi at 10% off MSRP including the option credit from BMW of Shrewsbury. They were the cheapest out of 5 dealership I visited in MA.

Last edited by The X Men; 06-05-2012 at 11:58 AM..
Appreciate 0
      06-05-2012, 11:36 AM   #11
BigKutta
Major
BigKutta's Avatar
207
Rep
1,013
Posts

Drives: 2020 M2 Competition, 2012 528i
Join Date: Jan 2012
Location: Washington DC

iTrader: (0)

Garage List
2012 528i  [0.00]
2012 BMW 528i  [0.00]
Quote:
Originally Posted by grasso06 View Post
I spoke with an employee I know who works at a BMW dealership and he said that the invoice price is at least several thousand dollars above their dealer cost. For example, a car with a MSRP of ~$50,000 has an invoice somewhere around ~$45,000, while the actual dealer cost is ~$41,000. He couldn't stress enough that the invoice price is a made up number used as a negotiating tactic. Rarely will dealers ever sell you a car for near their actual cost...both the dealer and the salesperson need to make money! The MRSP price guarantees that the sales person will make commission (over the invoice price) while the invoice price brings profit to the dealer (over the dealer cost).
I think this is right on. Invoice pricing is so widely available to the public (from the manufacturers) that you would have to think it is meaningless. It gives us all a good feeling to get close to invoice, so I suppose its great marketing ploy.

The margins for the dealer will vary per sale depending upon the available incentives from BMW and what the car eventually sold for. If I do the math, I paid several thousand $ below invoice, because I realize that the invoice price is meaningless and that the dealers incentives change all the time, so, a deal that cannot be had one day, can easily be had (or better) the next day or week. There is really no incentive for a dealer to take a loss on a car sale unless there are special circumstances, so push hard and see where you end up.
Appreciate 0
      06-05-2012, 11:38 AM   #12
BigKutta
Major
BigKutta's Avatar
207
Rep
1,013
Posts

Drives: 2020 M2 Competition, 2012 528i
Join Date: Jan 2012
Location: Washington DC

iTrader: (0)

Garage List
2012 528i  [0.00]
2012 BMW 528i  [0.00]
Quote:
Originally Posted by LLepard View Post
I am negotiating for a new 5 series.

The dealer says his margin is 7%. Therefore, he will split it with me and take 3.5% off the sticker price.

How badly am I being abused if I do this?

Does anyone know what the dealer margin on a 535xi is?????

Thanks.
oh, and I would not accept that. That is his opening position. Push for close to invoice and be patient (unless you need to buy soon, and even still...)
Appreciate 0
      06-05-2012, 12:03 PM   #13
AP
Colonel
AP's Avatar
669
Rep
2,688
Posts

Drives: G30 540i X Msport
Join Date: Apr 2011
Location: UK

iTrader: (0)

It may differ from country to country but I got 11% off my 530d witch was specced out with a load of options.
this is the Uk by the way.
Appreciate 0
      06-05-2012, 03:14 PM   #14
rhinosaur
First Lieutenant
rhinosaur's Avatar
Portugal
15
Rep
358
Posts

Drives: F11 535d MY2013
Join Date: Jan 2012
Location: Germany/Portugal

iTrader: (0)

Quote:
Originally Posted by AP View Post
It may differ from country to country but I got 11% off my 530d witch was specced out with a load of options.
this is the Uk by the way.
Agreed. I know from a good source that the margin for dealers in Germany is 15%, at least in the F11 535d, including some degree of subsidizing by BMW AG.

I got slightly below that in my deal.
Appreciate 0
      06-05-2012, 04:28 PM   #15
Ellmat
Private First Class
Ellmat's Avatar
United Kingdom
14
Rep
150
Posts

Drives: E70 3.0D MSport
Join Date: Sep 2010
Location: Kent, UK

iTrader: (0)

Quote:
Originally Posted by rhinosaur View Post
Agreed. I know from a good source that the margin for dealers in Germany is 15%, at least in the F11 535d, including some degree of subsidizing by BMW AG.

I got slightly below that in my deal.

If it helps to know, i got 14% discount on my 535d
Appreciate 0
      06-05-2012, 04:44 PM   #16
rhinosaur
First Lieutenant
rhinosaur's Avatar
Portugal
15
Rep
358
Posts

Drives: F11 535d MY2013
Join Date: Jan 2012
Location: Germany/Portugal

iTrader: (0)

Quote:
Originally Posted by Ellmat View Post
If it helps to know, i got 14% discount on my 535d
Great! 13.8% here. In addition, my E60 530d was valued above its market value. It was a good deal!
Appreciate 0
      06-06-2012, 02:00 AM   #17
darrko
Lieutenant
United Kingdom
33
Rep
514
Posts

Drives: 2012 520d | 2016 M5 CP
Join Date: Nov 2011
Location: London

iTrader: (1)

Quote:
Originally Posted by Touring View Post
Anyway with 3 percent discount or not, the BMWs in USA are extremely cheap. You are lucky :-)

I Norway the cartaxes are almost satanic, you would not believe what a 550ix cost here. More than 200.000 Dollars
I would have thought the EU would have a more relaxed tax structure for member countries importing from other member countries. I am sure it sucks to have to pay so much for something that was manufactured "down the road".
__________________

Appreciate 0
      06-06-2012, 02:41 AM   #18
Mobileum
Private
Norway
4
Rep
74
Posts

Drives: BMW 520D F10
Join Date: Jun 2011
Location: Norway

iTrader: (0)

Norway is not an EU member.
Appreciate 0
      06-06-2012, 07:41 AM   #19
rhinosaur
First Lieutenant
rhinosaur's Avatar
Portugal
15
Rep
358
Posts

Drives: F11 535d MY2013
Join Date: Jan 2012
Location: Germany/Portugal

iTrader: (0)

Quote:
Originally Posted by Mobileum View Post
Norway is not an EU member.
But even within the EU car taxation can be extremely different! Take for example Denmark or Portugal where we have cascaded taxes:
- special car tax depending on engine size and emissions, applied to the car net price
- 23% VAT on top of net price and aforementioned specific car tax

Prices are very heterogeneous throughout the EU and, for example, cars in Germany are on average two thirds of the price in Portugal (out of tax differences).
Appreciate 0
      06-06-2012, 07:21 PM   #20
reallyreallyslow
Enlisted Member
1
Rep
32
Posts

Drives: f10
Join Date: Jun 2012
Location: Singapore

iTrader: (0)

Quote:
Originally Posted by Touring View Post
Anyway with 3 percent discount or not, the BMWs in USA are extremely cheap. You are lucky :-)

I Norway the cartaxes are almost satanic, you would not believe what a 550ix cost here. More than 200.000 Dollars
You will not believe how much it cost here in Singapore. The 550i is like 300k nett after the 15-20k discount!

On top of that, the road tax is a staggering 3.5k per annum. Worst of all, the car can only be owned for 10 years, after which another lump sum fee has to be paid to keep the car for another 10 years, with 50% increase in road tax.

List price of the most basic 520i is almost 200k usd. Yup, no typo, 520i.
Appreciate 0
      06-06-2012, 11:36 PM   #21
clarence
Lieutenant Colonel
44
Rep
1,544
Posts

Drives: F30 328i M-Sport
Join Date: Mar 2006
Location: Hong Kong

iTrader: (0)

Quote:
Originally Posted by darrko View Post
I would have thought the EU would have a more relaxed tax structure for member countries importing from other member countries. I am sure it sucks to have to pay so much for something that was manufactured "down the road".
Each member country have their own tax structure, so if u purchase a new car in a different member country u first have to claim a tax refund from the country of purchase, then when u register ur car at ur home country u then pay the relevant taxes to the authorities.
BMW UK (which is wholly owned by BMW AG) have a department which deals in personal exports to EU, so some EU citizens saved money by ordering from BMW UK when the GBP was cheap.
Appreciate 0
      06-06-2012, 11:42 PM   #22
clarence
Lieutenant Colonel
44
Rep
1,544
Posts

Drives: F30 328i M-Sport
Join Date: Mar 2006
Location: Hong Kong

iTrader: (0)

Quote:
Originally Posted by Mobileum View Post
Norway is not an EU member.
U guys have it both ways, not a EU member but a EEA member. All the trade benefits but none of the political baggage.
Appreciate 0
Post Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 03:08 PM.




5post
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2020, vBulletin Solutions Inc.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST