[JackSpadesSI]

Originally Posted by jferrell

below invoice without some sortof credit back isn't possible nor does it make any sense.

I agree that selling a product at a loss isn't a business strategy. However, my deal is in black and white.

[JackSpadesSI]

Originally Posted by jferrell

I think as consumers(I buy cars too) we like to think they do to keep from feeling so cheap about going to the guy with the lowest price. I'll have customers come test drive, go over options I follow up for weeks and spend cumulatively a few hours then they want to price shop me over and over again. "Oh theres a dealership a few states over that'll beat you by $500". Really? Think of it this way Best Buy can make money on your financing, on your service and on your extended warranty purchase but if you buy none of those they make it on there product. We are the same way and a customer who is usually wanting a car "below invoice" is a loss leader. They are also the same ones that think a dealership "is snubbing their nose at them" because they won't accept a low ball offer on a car you have to order. I'm all for helping guys on the forums get a good deal but I'll never sell at or below invoice it just doesn't make sense for me or the dealership.

Don't be so high and mighty. The customer has a right to offer $1 for a car (but I'm not saying that is smart). The dealership, in turn, has the right to say "no". Believe me, I think haggling is the dumbest thing around and I'd just as soon see solid pricetags on cars like for almost any other product out there. However, since haggling is a reality of car shopping, how can you expect the customer not to look out for his own finances?

I hate it when I hear so much about how the dealership isn't going to make any money on the sale. If the deal was so awful, they shouldn't have made it in the first place. You said somewhere in this thread that if a person sold their own house for a loss they would be an idiot - well, the easy answer is of course they would be. Likewise, if a dealership would lose money on a sale no one is going to force them to that price. If a customer is making a lowball offer there is no rule that says they must walk away with a car for their offer.

The only thing the dealer is obligated to do in that situation is to remain professional and not lose composure. This isn't a social event - it is business. Don't get your feelings hurt over a customer looking to save their hard-earned money. If you don't want to make the sale just politely turn them away. It is as simple as that.

Plain and simple: the customer is NOT obligated to look out for the dealership's financial well-being. At the same time, the dealership is NOT obligated to look out for the customer's budget. Each must know their own position and strike a deal within their respective comfort zones. For that reason, I will never feel bad about buying an expensive car for as little as possible, even if the dealer didn't make a cent off the sale. But, I will also never be insulted if the dealer politely turns me away because my offer was too low.

[positiveions]

I can write an argumentative paper about this.
j/k. Dealer still make the money regardless. If the dealer sells the car below invoice, then there are other avenues to make the money. I don't want to get into that discussion because when those doors are open the next morning it equates that the dealer is still in business.

[dmboone25]

This is a fun discussion.

I would bet that the dealer doesnt make that high of a % on the sale of the car--I would bet that the SERVICE is where the dealer makes a killing. There is a reason the service dept at a dealership is always a decent % higher than taking the car to a 3rd party service shop...

I also do not believe that the published invoice price is actually what the dealer pays for the car from BMW. I have heard, from folks at my dealer, that there are various rebates, incentives, and bonuses that go to the dealership itself, based on things like sales volume or the sales of certain cars that BMW happens to be pushing at various times.

If owning a dealership was so bad, then no one would do it....and there are plenty out there from which to choose...

Additionally, I am all for the good relationship between a service/client advisor and myself, as the client. But I have never bought or leased a car that the CA has known more about the vehicle than I have. In other words, I am a pretty easy sale. I dont want the car walk through, or the drive. I dont even want it "detailed" because I am sure I do a better job....so if that SA is making a few hundred bucks off me, it has to be the easiest money he has ever made....

My $.02.....

[jferrell]

The issue isn't the dealerships inability to turn away a sale in the event it isn't mutually beneficial for both parties the issue is customers not willing to pay any sortof premium for the level of service they recieve. A purchase that is entirely fiscally driven creates a walmart style industry where abouts the people who may have a certain amount of experiences or better service are driven out of business. I've read countless post from people on the forums stating they they always know more then the CA and therefore justifies them not making as much. Realistically you wouldn't pay more if I was able to best you in my knowledge of the product you're buying. I research and learn for my love of the brand but most CA's have no motivation to. Just imagine a more walmart like approach to a $40,000 purchase, the clerks look at you funny when you ask any questions, you have a problem with your build and you wait in line an hour to talk with anyone, or as Walmart's ultimate goal is, one mega dealership puts all the others in a state out of business and then have the ability to set the price and you have no competition to shop with. Here's my last word on the subject if you know the exact car you want to buy, and don't want to test drive and don't need me to walk you through the delivery and will give me a good survey call me for a good deal. I may not get my manager to ok it because I've heard it called "whoring the brand" but I'll try. Don't be the guy that had me stay late two nights in a row called me 5 times a day with questions then wanted me to discount 4000 more off my already 2000 dollar discounted CPO because a dealership 800 miles away had one he thought he could get for that price. A complete waste of my expertise and professionalism was lost because all the guy cared about when it came time to pay was his wallet not my time or family or what I had invested for him.

[harris69]

Hey Jferrel, do you have any 2007/2008 335i 6-speed CPOs in stock? I just joined this forum, and so I can't PM or receive PMs quite yet, but If you have any alpine white, montego blue, or steel gray E90/E92s, email me at muayboran@hotmail.com.

Thanks,
Tayyab.

[Nater]

Originally Posted by jferrell

The issue isn't the dealerships inability to turn away a sale in the event it isn't mutually beneficial for both parties the issue is customers not willing to pay any sortof premium for the level of service they recieve. A purchase that is entirely fiscally driven creates a walmart style industry where abouts the people who may have a certain amount of experiences or better service are driven out of business. I've read countless post from people on the forums stating they they always know more then the CA and therefore justifies them not making as much. Realistically you wouldn't pay more if I was able to best you in my knowledge of the product you're buying. I research and learn for my love of the brand but most CA's have no motivation to. Just imagine a more walmart like approach to a $40,000 purchase, the clerks look at you funny when you ask any questions, you have a problem with your build and you wait in line an hour to talk with anyone, or as Walmart's ultimate goal is, one mega dealership puts all the others in a state out of business and then have the ability to set the price and you have no competition to shop with. Here's my last word on the subject if you know the exact car you want to buy, and don't want to test drive and don't need me to walk you through the delivery and will give me a good survey call me for a good deal. I may not get my manager to ok it because I've heard it called "whoring the brand" but I'll try. Don't be the guy that had me stay late two nights in a row called me 5 times a day with questions then wanted me to discount 4000 more off my already 2000 dollar discounted CPO because a dealership 800 miles away had one he thought he could get for that price. A complete waste of my expertise and professionalism was lost because all the guy cared about when it came time to pay was his wallet not my time or family or what I had invested for him.

Very well said, my feelings exactly. It always seems to me that the customers that shop you and every dealer in the surrounding states are the hardest to please and almost always deck you on the survey.

I can totally appreciate and understand a customer trying to get a good deal, but when they beat you up over a few hundred bucks on a $40,000 plus car it is just plain silly.

[Ty Vil]

Originally Posted by Nater

Very well said, my feelings exactly. It always seems to me that the customers that shop you and every dealer in the surrounding states are the hardest to please and almost always deck you on the survey.

I can totally appreciate and understand a customer trying to get a good deal, but when they beat you up over a few hundred bucks on a $40,000 plus car it is just plain silly.

And it happens all the time!

[bkM3]

if you where in the NY/NJ area i would be able to hook you up!

[harris69]

BKM3, can you email me specs of the cars you have? Emails is muayboran at hotmail dot com.

[dmboone25]

Originally Posted by jferrell

The issue isn't the dealerships inability to turn away a sale in the event it isn't mutually beneficial for both parties the issue is customers not willing to pay any sortof premium for the level of service they recieve. A purchase that is entirely fiscally driven creates a walmart style industry where abouts the people who may have a certain amount of experiences or better service are driven out of business. I've read countless post from people on the forums stating they they always know more then the CA and therefore justifies them not making as much. Realistically you wouldn't pay more if I was able to best you in my knowledge of the product you're buying. I research and learn for my love of the brand but most CA's have no motivation to. Just imagine a more walmart like approach to a $40,000 purchase, the clerks look at you funny when you ask any questions, you have a problem with your build and you wait in line an hour to talk with anyone, or as Walmart's ultimate goal is, one mega dealership puts all the others in a state out of business and then have the ability to set the price and you have no competition to shop with. Here's my last word on the subject if you know the exact car you want to buy, and don't want to test drive and don't need me to walk you through the delivery and will give me a good survey call me for a good deal. I may not get my manager to ok it because I've heard it called "whoring the brand" but I'll try. Don't be the guy that had me stay late two nights in a row called me 5 times a day with questions then wanted me to discount 4000 more off my already 2000 dollar discounted CPO because a dealership 800 miles away had one he thought he could get for that price. A complete waste of my expertise and professionalism was lost because all the guy cared about when it came time to pay was his wallet not my time or family or what I had invested for him.

I respectfully disagree.

I seek out dealerships based on the [I]brand[I] itself. It is then up to the respective dealers to sell me on their particular dealership.

It is easily known that you can walk into any BMW dealership and order the car that you want or pick one off the lot. The difference is that I will only give my time and money to a dealership that makes that investment in making me happy....that is why I have personally bought 6 cars from my dealer in Indy.

The service shouldn't cost more--it is how you show potential and returning customers that they should purchase and service their vehicles at your dealership, instead of a different one. I expect the service, based on the brand itself. It is up to the respective dealerships to then set themselves apart....

[JackSpadesSI]

Originally Posted by dmboone25

I respectfully disagree.

I seek out dealerships based on the [I]brand[I] itself. It is then up to the respective dealers to sell me on their particular dealership.

It is easily known that you can walk into any BMW dealership and order the car that you want or pick one off the lot. The difference is that I will only give my time and money to a dealership that makes that investment in making me happy....that is why I have personally bought 6 cars from my dealer in Indy.

The service shouldn't cost more--it is how you show potential and returning customers that they should purchase and service their vehicles at your dealership, instead of a different one. I expect the service, based on the brand itself. It is up to the respective dealerships to then set themselves apart....

+100

[jferrell]

Originally Posted by dmboone25

I respectfully disagree.

I seek out dealerships based on the [I]brand[I] itself. It is then up to the respective dealers to sell me on their particular dealership.

It is easily known that you can walk into any BMW dealership and order the car that you want or pick one off the lot. The difference is that I will only give my time and money to a dealership that makes that investment in making me happy....that is why I have personally bought 6 cars from my dealer in Indy.

The service shouldn't cost more--it is how you show potential and returning customers that they should purchase and service their vehicles at your dealership, instead of a different one. I expect the service, based on the brand itself. It is up to the respective dealerships to then set themselves apart....

Just a point of contention here, if service doesn't warrant a premium from you why bother from a dealerships perspective? I understand whole heartedly that some individuals buy multiple vehicles and have tons of repeat customers however, if you are repeatedly asking for 500 over cost then in 6 cars I make as much as the one that is comfortable with paying MSRP because of the service they recieve. You pay 500 over cost 6 times, the CA gets paid say 250 6 times and the dealership is left with 1500 to pay the finance manager, sales manager, and overhead. The guy paying even 2000 over invoice pays the CA maybe 300 after the pack and he'll probally buy again too.

There was a book written a while back called Angel and Demon Customers and it's main focus was how business can also be discerning in who they accomodate. I made an offer here recently that I would try to get 500 over invoice for anyone doing a quick deal, selling my managers on that idea isn't always easy and it definately isn't easy when the customer then wants to pay no MF markup, no aquisition fee markup, no other profit then that 500. They'll probally give you nothing but 8-9 on the survey so there isn't money on the back end for you, so what's the benefit. I think I'd rather stack my book of business with reasonable customers then "500 over invoice" customers. Trying to get a BMW for the cheapest possible price is cheap not frugal because it's gonna take that CA hours of running numbers, test driving, doing your paper work, delivering the car, etc.. to "earn your business". That being said I treat all my customers the same and give them the best service I can before price ever comes up. I'm only offended when they feel I'm not worth the hours I've invested when it comes time to pay.

Also if what makes you happy is free floor mats and no profit, as we say in the automobile industry, on to the next one.

[dmboone25]

Originally Posted by jferrell

Just a point of contention here, if service doesn't warrant a premium from you why bother from a dealerships perspective? I understand whole heartedly that some individuals buy multiple vehicles and have tons of repeat customers however, if you are repeatedly asking for 500 over cost then in 6 cars I make as much as the one that is comfortable with paying MSRP because of the service they recieve. You pay 500 over cost 6 times, the CA gets paid say 250 6 times and the dealership is left with 1500 to pay the finance manager, sales manager, and overhead. The guy paying even 2000 over invoice pays the CA maybe 300 after the pack and he'll probally buy again too.

There was a book written a while back called Angel and Demon Customers and it's main focus was how business can also be discerning in who they accomodate. I made an offer here recently that I would try to get 500 over invoice for anyone doing a quick deal, selling my managers on that idea isn't always easy and it definately isn't easy when the customer then wants to pay no MF markup, no aquisition fee markup, no other profit then that 500. They'll probally give you nothing but 8-9 on the survey so there isn't money on the back end for you, so what's the benefit. I think I'd rather stack my book of business with reasonable customers then "500 over invoice" customers. Trying to get a BMW for the cheapest possible price is cheap not frugal because it's gonna take that CA hours of running numbers, test driving, doing your paper work, delivering the car, etc.. to "earn your business". That being said I treat all my customers the same and give them the best service I can before price ever comes up. I'm only offended when they feel I'm not worth the hours I've invested when it comes time to pay.

Also if what makes you happy is free floor mats and no profit, as we say in the automobile industry, on to the next one.

The dealership should "bother" for the same reasons I stated above. It is not hard to find the BMW that you want, or to order exactly what you want. There are many choices of dealers, and as a result, each one must find ways in which to distinguish themselves from the rest of the pack.

The easiest way is service. If the cars and the brand are the same, then that is the simplest and most logical way to create BMW brand recognition with your particular dealership.

Additionally, as another poster said above, the price of the car is negotiable. Each customer has the right (and responsibility really) to try and negotiate the best possible deal on their car. Some folks don't want to mess with it, and will just pay sticker to be done with the process. Most people aren't that way...and all the dealership has to do is reject the deal if it doesn't make the best business sense. It isn't that hard, and wouldn't offend me if a CA told me that a particular deal couldn't be done. Wouldn't prevent me from shopping around.

You also mentioned things like running the numbers, preparing the car, etc as "invested time"....It seems that those are the typical job duties of a CA, right? I can't imagine anyone thinking of it as invested time rather than a CA doing his or her job....which again, shouldn't cost me more....

Also, I have worked in retail markets in the past, and I understand that there are definitely horrific people out there that want everything but will pay nothing. I, and many others on this board, am not one of those people. I just want the best possible deal I can get.

And I will always expect the service I currently receive. As soon as that goes away, I will take my business elsewhere.

[mwh2009]

Had to get my 2 cents in here. I think the problem is a misunderstanding of the concept of invoice price and MSRP.

All of this talk about respect and service and hassle and lowball offers, etc. is just noise. That all adds up to form the market's opinion of the value of the product. If a dealer or CA is poor on service, that just hurts their product. The customer can be a pain, that just hurts their ability to get a better deal. In the end, the product is worth a certain amount, and that amount is clouded by market inefficiency (higher prices in OH than in NY or something) and by the lack of skill on the part of the negotiators of both sides.

The product is worth what it's worth - the market sets that, not a sticker on the car (MSRP) nor a invoice pricing website like edmunds, not even the individual buyer, but the whole population. We've all seen cars sell for higher than MSRP and for less than invoice. What we as buyers all struggle with is the lack of transparency in the 'worth' part of the process. That's where invoice price comes in.

Of course, none of us want to pay more than the car is worth - when we hear of a deal in NY being better than what we get, we are compelled to seek a better deal. Face it - if haggling and lowballing never worked, no one would do it. Just like if pricing a car above its value never got the dealership a higher price, they wouldn't do it either.

I agree that the CA should be frustrated by buyers that lowball after hours of 'sunk cost' on the part of the dealership. At the same time, only an idiot customer would voluntarily pay MSRP without trying to get the price down, just because there are so many others that have gotten better deals than MSRP. Likewise, invoice price is similarly meaningless other than as a tool to start the negotiating. No one on either side should care what the dealership paid for the car. Once the dealership bought the car, what they paid is now irrelevant. The only thing that matter is what the market will bear. In a perfectly efficient market, the starting point (MSRP or Invoice) would not matter - you'd finish up in the same place.

So I think both sides would be better served by finding the true value of the car as defined by the market and tailoring their offer to hit that point. Believe me, the finance guys know the value of that car even if the CA's don't, and the customer will probably not find a taker for his lowball offer if it's below the market value, regardless of where that is relative to MSRP or Invoice.

Thanks for letting me rant.