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      04-12-2008, 06:27 PM   #1
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Need help with negotiating

Alright, I know this gets talked about a lot, but a lot of times it seems specific or it ends up in a fight over what fees are worth what, so I was hoping I might get some help here.

As a background, I, nor have my parents, ever bought a car from a dealership, or leased a car before, so I know very little about the negotiations.

I've decided that a lease is best for me because I can have lower payments to save money for a house, I don't usually put many miles on a car, and I like new cars, so in 3 years I'll probably be ready for the latest and greatest again.

Here's what I'm looking at:

E92 335i
Premium
Sport
Cold Weather (I want the heated seats and the whole package is only another $200 invoice)
Comfort Access
Navigation
iPod
Satellite
HD Radio
PDC

Invoice: $46,220
MSRP: $50,270

Because it's a lease, I'd like to keep the down payment to a reasonably small number, perhaps $1000-2000. I understand this is smarter with a lease.

Now, I hear people say aim for $500 over invoice, but is that for a purchase or a lease, and is it actually reasonable? In my case, would $47,000 even be an attainable number?

And I've heard some people say negotiate the monthly payment on a lease, not the price, because after you get the price, there is always the lease interest rates (which I don't entirely understand, what is this rate and how does it affect me?).

If I could get a crash course on dealing with a dealer before I go in to make my order next week, I would greatly appreciate it. I know that there are obviously some factors that vary from location to location and deal to deal, but I just don't have the dealership negotiation experience and I want to be as informed as I can be so I don't get screwed on anything.

Thanks in advance!!
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      04-12-2008, 06:48 PM   #2
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the money factor is the 'interest rate' that you are charged on a lease. these rates change almost every month and the dealer sometimes try to pad them for extra profit. I would suggest negotiating on price, but making sure that you know the base rate and are sure you are getting it. The dealer has a 'Lease Worksheet' that they can print out from their system that will have all of the fees/rates/prices for the deal. I would get a copy of this so you can see what you are being charged. Also there is a very detailed lease calculator on bimmerforums that can help you see all the different factors and how they effect price. suggest you d/l that.
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      04-12-2008, 06:51 PM   #3
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Originally Posted by Streetfish View Post
the money factor is the 'interest rate' that you are charged on a lease. these rates change almost every month and the dealer sometimes try to pad them for extra profit. I would suggest negotiating on price, but making sure that you know the base rate and are sure you are getting it. The dealer has a 'Lease Worksheet' that they can print out from their system that will have all of the fees/rates/prices for the deal. I would get a copy of this so you can see what you are being charged. Also there is a very detailed lease calculator on bimmerforums that can help you see all the different factors and how they effect price. suggest you d/l that.
Thanks, I'm gonna go look for that now.
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      04-13-2008, 07:09 AM   #4
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Thanks, I'm gonna go look for that now.
sorry it was bimmerfest.com.

here is the link

http://images.330i.net/media/lease_calculator.xls


thread:

http://www.bimmerfest.com/forums/showthread.php?t=60089

one thing to note is that tax is calculated differently in each state. noticed that the tax that this calc was estimating was way too low so I turned off the 'roll tax into payment' option and calcualted it myself
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      04-13-2008, 09:05 AM   #5
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Yeah, I found it and it seems like a nice little tool, unfortunately after I filled it all out I found it didn't seem to work with Excel 2008 for Mac. I'll have to try at work.

Anyway, I sat on the computer late last night reading all the information I could and I've learned a lot about it all, but I still have plenty of questions.

Should I expect to not get as good of a deal as a first time buyer? I was thinking about letting the SA know that I WILL be back, and that I'd like to do business with him again if he gives me a good deal and keeps me happy with this lease.

I've been thinking about it and to me it seems like the best way to go in is with a number for the car and fees all together. Tell him I don't care how they split it up, but this is the number I'd like in the end (excluding non-negotiables like tax, tags, title, etc).

And of course, all of this is in a friendly matter of fact type way, not pushy or aggressive, just firm so that he knows that I mean business. I'm not going into it thinking he's my opponent, I'm thinking we're a team to try to get the price to where I like it.

I think I want to walk in with a deposit check already written out, and let him know that if I'm very happy with the price, I'll hand him the check right there, otherwise I'm going to at least go talk to other dealers. That way he has the incentive of a sale sitting right in front of him the whole time.

I know these may seem like silly questions, but does all of this sound good? Like I said, I have no experience negotiating with a dealer and want to make sure I go into it right and don't say anything wrong.

A few other numbers questions, everyone on here says they paid "$xxx over invoice", I assume that's before fees? When you say to aim for $500-1000 over invoice, how much more can be expected for the required fees (ignoring tax, tags, title, etc, just dealer fees, security, acquisition, doc, etc). I'm trying to build a range of numbers where I'd be very happy and hand a check over right then, and where I'd rather go ask around first. I want to be ambitious of what I can get, but I don't want to be overly ambitious and find I'm never going to hit the right numbers.

Thanks again for the help. I know this thread may be familiar to several others here, but it means a lot to me to get a little personal reassurance and help. If I'm about to buy a $50,000 (or even lease), I want to make sure I'm prepared to go into the deal smart.
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      04-13-2008, 09:52 AM   #6
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Originally Posted by AJerman View Post
A few other numbers questions, everyone on here says they paid "$xxx over invoice", I assume that's before fees? When you say to aim for $500-1000 over invoice, how much more can be expected for the required fees (ignoring tax, tags, title, etc, just dealer fees, security, acquisition, doc, etc). I'm trying to build a range of numbers where I'd be very happy and hand a checkover right then, and where I'd rather go ask around first. I want to be ambitious of what I can get, but I don't want to be overly ambitious and find I'm never going to hit the right numbers.

Thanks again for the help. I know this thread may be familiar to several othershere, but it means a lot to me to get a little personal reassurance and help. If I'm about to buy a $50,000 (or even lease), I want to make sure I'm prepared to go into the deal smart.
Never leased a car, but as far as buying goes, I've bought 4, and just ordered a 335i coupe (in sig below) for ED. Now the ED prices are pretty low, and I made a compromise and agreed to $1,000 over invoice on my car. But thats it! You can probably get a SLIGHTLY better deal online, or a dealership far away, but for a good dealer, close by that should count for something. As far as price goes... I just ran down the list at ED invoice. (Aside from the car, all the options are cheaper.) Then added on destination ($775), and added on $1,000 (for them ) and that was it. If you're buying your car here in the US, then you'll have to pay some kinda "training fee" and the "MACO fee". So originally my dealer quoted me as $1,225 for all fees including destination, but I disputed it since ED cars only have to pay the destination fee.

I just priced out your car like I did mine (well for US port invoice)...
$35,790 - car
$00,455 - comfort
$02,320 - premium
$01,545 - sport pkg
$01,910 - Nav
$00,540 - Satellite
$00,315 - HD radio
$00,360 - iPod
$00,320 - Parking dist cont.
$00,180 - training FEE
$00,775 - destination FEE
$00,400 - maco/ advertising FEE (it varies, and $400 would be on the high side)

Total = $44,910

So, thats invoice + "the usual" fees (I didn't include tax,title, license), and I'm pretty sure even at invoice there is a dealer hold back, so they are still making some money on it regardless. (As far as I know, there is no hold back on ED cars.)

So I'd say if you were buying, I wouldn't really go higher than $46k, thats just a free $1,000 for them, and even if they made it $46,500, thats still less than your $47k. Hope that helped somewhat.
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      04-13-2008, 10:13 AM   #7
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Yeah, I found it and it seems like a nice little tool, unfortunately after I filled it all out I found it didn't seem to work with Excel 2008 for Mac. I'll have to try at work.

Anyway, I sat on the computer late last night reading all the information I could and I've learned a lot about it all, but I still have plenty of questions.

Should I expect to not get as good of a deal as a first time buyer? I was thinking about letting the SA know that I WILL be back, and that I'd like to do business with him again if he gives me a good deal and keeps me happy with this lease.

I've been thinking about it and to me it seems like the best way to go in is with a number for the car and fees all together. Tell him I don't care how they split it up, but this is the number I'd like in the end (excluding non-negotiables like tax, tags, title, etc).

And of course, all of this is in a friendly matter of fact type way, not pushy or aggressive, just firm so that he knows that I mean business. I'm not going into it thinking he's my opponent, I'm thinking we're a team to try to get the price to where I like it.

I think I want to walk in with a deposit check already written out, and let him know that if I'm very happy with the price, I'll hand him the check right there, otherwise I'm going to at least go talk to other dealers. That way he has the incentive of a sale sitting right in front of him the whole time.

I know these may seem like silly questions, but does all of this sound good? Like I said, I have no experience negotiating with a dealer and want to make sure I go into it right and don't say anything wrong.

A few other numbers questions, everyone on here says they paid "$xxx over invoice", I assume that's before fees? When you say to aim for $500-1000 over invoice, how much more can be expected for the required fees (ignoring tax, tags, title, etc, just dealer fees, security, acquisition, doc, etc). I'm trying to build a range of numbers where I'd be very happy and hand a check over right then, and where I'd rather go ask around first. I want to be ambitious of what I can get, but I don't want to be overly ambitious and find I'm never going to hit the right numbers.

Thanks again for the help. I know this thread may be familiar to several others here, but it means a lot to me to get a little personal reassurance and help. If I'm about to buy a $50,000 (or even lease), I want to make sure I'm prepared to go into the deal smart.

When people talk about paying x over invoice they are only talking about the price of the car - i.e MSRP v Invoice price. You could pay $100 over invoice and still get a bad deal becasue there are so many other ways for the dealer to make money. The example I gave before was inflating the money factor, or made-up/padding fees. That is why I suggest, knowing what I am paying exactly for each line item and negotiating those separately. What I did is went to one dealer and negotiated each line item and got a very aggressive deal, and then I went to another deal and said can you beat xxx a month and xxxx due at signing and you will find that most often they will. I don't think you should say I will sign 'today' if you get a good deal becasue that means that you wont have the opportunity to look over your numbers and check the math, as well as think about the deal. Dont shop on impulse. However you can say that I am looking to buy within the next few days.

To get a lease out the door you fees should be:

Bank Fee - $625, non-negotiable but some dealers try to pad this higher and you can negotiate that

Security Deposit - This is equal to your payment rounded up to the net $50 increment. So if your payment is $537 a month deposit would be $550

First Month Payment - self explanatory

Documentation Fee - all dealers charge some kind of doc fee, you may be able to negotiate this a little but figure $200 here

Registration/Title - another couple hundred

Tax - if paid upfront

Cap cost reduction - if you are putting additional money down.


Basically you need about 2 grand to get a car out the door with 'no money down'

also you should try searching there is a lot of info out there
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      04-13-2008, 10:23 AM   #8
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In your situation, I would take some time and get quotes over the internet from your local dealers. After that you will be able to get a feel with what these cars are going for in your market. When you have the payment info and fees you can input them into a lease calculator along with the rest of the puzzle to get a feel for where you are at.

After you narrow it down to a couple of dealers that sound like they want to work with you, then go in and meet face to face and possibly whittle it down a little more (maybe floor mats).

When you say "first time buyer", do you mean that you have never financed a car before? If not you may need a co-signer. A lease will require a pretty strong credit history.
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      04-13-2008, 11:25 AM   #9
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Thanks for the replies so far, it's a lot of really good info so far and it's really helping me iron out what I can expect to pay, what I can expect the dealer to say, and be prepared for anything they may try to hide on a deal to make a little more money.

MrSteak: I don't think I'm going to be doing ED on this one. It's something I'd definitely like to do, but maybe on the next one. The base price you used in your numbers is for the Sedan. I'm going for a coupe, so it's a little more.

Streetfish: I agree on not buying on impulse. I've already talked to an SA at the local dealership over a month ago, so it wont be like I'm just running in and saying I'll buy something. Trust me, I've been crunching numbers like crazy and will know exactly what I'm looking for before I walk in. Bringing a check is more of an incentive for him to try to make me a good deal, I absolutely don't mind walking out and shopping around.

Thanks for the explanation on fees, that'll help my numbers. And as for searching, haha, you don't have to tell me that. I've spent countless hours in the last few days reading everything, I have a pretty good idea of a lot, but just wanted a thread for a little more personalized info and to ask some questions.

Quote:
When you say "first time buyer", do you mean that you have never financed a car before? If not you may need a co-signer. A lease will require a pretty strong credit history.
Oh, no, first time buyer at a dealership, my credit should be just fine for the lease. If not I'll just buy the damn thing, but I'd rather lease to save money.

Oh, and I do know all the MF stuff now. I was doing a lot of numbers stuff last night and have an idea of what I want the price of the car to be, and what I want payments to be after factoring in MF, so I'm working on numbers between the two.
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      04-13-2008, 12:25 PM   #10
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If you're willing to pick up at the Performance Center in Spartanburg,SC,you can buy from any dealer in the country.The dealers in the south generally have very high doc fees,so always get an out the door price so there are no surprises.
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      04-13-2008, 05:51 PM   #11
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If you're willing to pick up at the Performance Center in Spartanburg,SC,you can buy from any dealer in the country.The dealers in the south generally have very high doc fees,so always get an out the door price so there are no surprises.
Didn't think about that. Yeah, I'm definitely strongly considering picking up at the PDC. It's only about 4 hours from here so I think it'd be a lot of fun and a good way to put some break in miles on.

Is there not anything I'd need to sign with a dealer, send deposits, etc? It seems like it would be a bit of a hassle to order from a dealer that was too far away.
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      04-13-2008, 10:15 PM   #12
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Check out Edmunds.com. Build your car, get the invoice, then the MSRP, and go in and make a deal. I paid about 400 over invoice.

DO NOT negotiate only the mon payment. Negotiate the price of the car whether it is a lease or a buy.
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      04-13-2008, 10:31 PM   #13
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Check out Edmunds.com. Build your car, get the invoice, then the MSRP, and go in and make a deal. I paid about 400 over invoice.

DO NOT negotiate only the mon payment. Negotiate the price of the car whether it is a lease or a buy.
Well, not so much negotiate it on the monthly payment, but with a lease I have to worry about the MF. Otherwise if they give me a good deal on the price and screw me on the MF, the negotiations end up cancelled out.

I guess the monthly payment is just something for me to keep an eye on so I know what I need to negotiate. I know about where I'd like to be on my monthly payment, so in a combination of price and MF, I want to be there.
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      04-16-2008, 07:39 PM   #14
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So, I've done some negotiating and this is what it looks like I've gotten:

Quote:
MSRP $49520

Discount $2205

Sale price $47315

Money factor .00245

Residual 62% or $30702

Due at signing $1183.09 (this is 1st month payment, tax, tag, and doc only) NO money down

35 more payments of $696.93
What do you guys think of that deal?

It looks like most of the dealers just laugh at the thought of a 500-1000 over invoice on a 335i, especially a coupe. I live in an area where everyone has a BMW, and after walking the lots, I can kind of agree that the supply and demand in our market means that they can sell coupes for not too far off sticker. Most of the dealerships actually said they couldn't beat that deal and were done with talking to me at that point.

My build comes out to an invoice of $45,535.

I'd like my payments to be about $650 which would require $1500 down, so I'm thinking about telling him I want him to knock off $500, and I'll do my $1000 down.

Another thing I was thinking about was MF. Would you guys ask for them to agree on that MF, but renegotiate it if the base goes down in May or June while I'm waiting for the car?

I'm thinking I could be happy if he can match those two, $500 more off, and an agreement that we make sure my MF stays as low as it can if they change the base.

Also, on a side note, I finally got to drive an E90 335i and I really was impressed. Coming from having 2 V8 Mustangs, the power is completely different. My Mustangs will throw you back in your seat, then die off. The 335i, while it certainly pushes you back, doesn't have the V8 torque, but seems to have power forever.

I did notice though that it was exact opposite of my Mustang's pedals. My GT's clutch isn't that heavy, the Cobra was incredibly heavy, but the BMW is like a feather. It's almost hard to get a good feel of when it grabs (CDV?). I found myself not so much riding the clutch, but not sure if it was ready to grab or not, if you know what I mean. And the brakes were extremely sensitive where my GT is soft. It took me a few minutes to get used to the BMW, then when I got back in my GT to go home, I had to get used to it again!

Either way, I really enjoyed it. It seems like a really nice car. The iDrive was very overwhelming for someone who has never used it before, but I expect as you learn where all the menus are, it gets better.
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      04-16-2008, 10:34 PM   #15
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Alright, well that's what I ended up doing. I sent an email over to my SA and told him that the $650 number was important to me, so if they could take another $500 off, I'd do $1000 down and we'd be there, and also that I'd like an agreement that should the MF drop in May or June before my car gets here, that we will renegotiate with the new numbers.

With the deals that I've seen everyone else getting on these cars, another $500 off puts me at $46,815 from an invoice of $45,535. I think that's a very good offer on my side and hopefully my business is worth it to them.

He already told me he'd normally throw floor mats in but with the deal he originally gave me, it was too low to do that, so I guess I'm definitely not getting floor mats, haha. I still think it's absolutely ridiculous that floor mats are an extra cost when I could buy a Kia for a quarter of the price and get floor mats included.

Let's hope for good news tomorrow morning!

Oh, and I also decided on Jet Black, Jade Gray, and Gray Poplar.
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