Best way to negotiate price?

Ok, I have the Invoice price and of course the MSRP for a 550 I'm looking to buy. My questions are....

1) Is the dealer making money if he sells at invoice price? Are they getting dealer incentives, holdbacks and such that could possibly make that invoice price profitable?

2) How much does a dealer deserve to make on a car sale? If we know what they paid for the car, isnt it just a matter of negotiating what you think they deserve to make on the car?

3) Has anyone actually negotiated a car sale this way? Stating the invoice price plus the invoice priced options and just asking the dealer... 'How much do you think I should give you as profit on this car?'

Also, let me know if you have any tips/tricks that worked for you. Thanks in advance!

BTW: I'm looking for a 550 with Sport Package, Heated Front Seats, On Board Nav, Split/Folding rear seats and I am leaning towards Euro Delivery

Reply » Best way to negotiate price?

Well, you can take that approach, but what may happen is:

- you get the best possible price, from a dealer that is willing to take the lowest margin
- you are now dealing for service with a dealer who may not want to, or is not able to, invest as much in after-sales service. Things like free service loaners, valet service to home and office, better-equipped shop, etc.
- the dealer knows that you are primarily interested in price, and will continue to treat you that way.

The right price is one that both parties are happy with. If there is no relationship between you and the dealer, and you don't want to build one, then just send offers around to various dealers until you find one that wants to deal.

There are lots of stories of individuals who have found the lowest price for a new sale, and then aren't happy with the service. I figure that you pay for the new car once, but you pay for the service issues for the life of the vehicle. And while I like every BMW I have owned, they are not without occasional issues.

In terms of what the dealer actually makes, there are lots of potential rebates, marketing funds, floor plans, etc, that the distributor has for the dealer, so you don't necessarily have the real dealer cost. Many of the more significant marketing programs get discussed on the boards, or are listed on various consumer sites.

How much does the dealer deserve to make? Some don't deserve to make anything. A dealer wholesaling a car that he is not going to have to support in any way, can get by with a few percent margin (2-3%). That is supermarket territory, so expect the same aftersales consideration, once you are out of the store, as you get in your local grocery. A car that is in demand, possibly in limited distribution (allocation, etc) will trade close to MSRP, possibly with 1000-2000 off as a courtesy. A sought-after vehicle will often have a line item on the sticker titled "additional dealer markup" With some brands, it is fairly common.

I have purchased lots of (domestic) cars from invoice plus a small percentage, when I didn't need the dealer for after-sales service. My experience with four BMWs has been that it is worth having the dealer on your side, and it is worth building a relationship with him. You have to find a dealer that wants to play that way, and if the ones in your area don't, then just go find the lowest price you can, but don't expect much more after you take delivery.

Good luck

Reply » Best way to negotiate price?

I think I paid a fair price for my BMW, and the sales guy and I got along fine. But their service department is completely different as their service needs improvement. The sales and service departments seem to be on different planets, and there seems to be some friction between the two.

Reply » Best way to negotiate price?

Quote:

BTW: I'm looking for a 550 with Sport Package, Heated Front Seats, On Board Nav, Split/Folding rear seats and I am leaning towards Euro Delivery

Talk to my man Adrian at Nalley BMW in Decatur

He is also the board sponsor

Reply » Best way to negotiate price?

Quote:

Talk to my man Adrian at Nalley BMW in Decatur

He is also the board sponsor

Reply » Best way to negotiate price?

Thanks for the tip to talk to Adrian at Nalley, I'll look him up.

As for After-Sales support, does the service department know how much over invoice I paid for my car? I have had a little experience with BMW service departments, but as a previous poster mentioned, they do seem to be on different planets (sales and service).

I was just wondering if you know of an experience like the one you mentioned where someone got a great deal on the car, but then the service department was less than helpful when they came back for service (like did you talk to a sales rep or service rep that might have mentioned this?).

I can say that I paid MSRP for my M Roadster when I got it new, but have had my fair share of less than stellar service experiences. But I never chalked that up to what I paid for the car originally.

I'm not saying that I want to rip off the dealer or anything, I know they won't let me get away with more than they're willing to give me. I just want to know that I'm not being too soft in the bargaining process.

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