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      09-10-2006, 12:07 AM   #1
rgoel
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(cross-post)
Would appreciate people's help. I'm planning to purchase a 335i via ED. I have drafted a letter which I intend to email or fax to 5-10 dealers in my vicinity (San Francisco, CA). The letter is below. Would appreciate any and all feedback before I send it out. Thanks in advance.


From: First Last
XXX-XXX-XXXX
email@email.com

To: BMW USA Dealer

Re: Intent to Purchase BMW 335i Coupe

Dear Sir/Madam:

I intend to purchase a new BMW 335i Coupe via BMW’s European Delivery program. I have already determined the configuration and ordering options, and am currently seeking a BMW dealer who is willing to do business with me immediately based on the specification indicated below. I am contacting multiple dealers.

Car configuration European Delivery INVOICE price
335i Base: $34,360
Premium Package (ZPP): $2,230
Sport Package (ZSP): $910
Comfort Access (322): $455
Metallic Paint (A22): $430
Park Distance Control (507): $320
Destination and Handling: $695
Subtotal: $39,400

Option Configuration
Paint – A22 Sparkling Graphite Metallic
Upholstery – LCSW Black Dakota Leather
Interior – 4AD Brushed Aluminum

In addition to the $39,400 European Delivery invoice price, I am willing to pay the following:
Dealer markup: Up to $600
Tax: Actual
Title: Actual
License: Actual
MACO fees: $0
Marketing fees: $0
Other fees: $0

Therefore, the total I am willing to pay is up to $40,000 + tax + title + license.

I am also considering financing up to half of the purchase amount, though final payment terms are not yet decided.

I assure you that I am a serious buyer. Upon your agreement to the terms defined above, I fully intend to purchase the vehicle with minimal time required from the sales agent or sales dealership.

If you are interested in doing business with me, please contact me at the phone number or email address listed above at your earliest convenience.


Thank you for your time and consideration,


First Last
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      09-10-2006, 09:05 AM   #2
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I suspect that you will not get any replies. 600 for the dealer in profit is slim, especially on a new model. Increase that to 1000 or 1500 and you might get a hit. Remember once you fax it at 600 you really can't go back and offer more money. The dealership would probably just wait for your 3rd fax with even more profit.
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      09-10-2006, 09:16 AM   #3
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If I were you, I would add a line that say's something like,
"I will consider the first offer that meets these numbers"
or
"I will take into consideration the first closest offer to my proposal"

So that you don't have to deal with 2 or 3 responses that accept your proposal, should you be so lucky.
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      09-10-2006, 11:00 AM   #4
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Quote:
Originally Posted by spots
I suspect that you will not get any replies.
that's an understatement...

to me, letters like that convey a total lack of any for the fact that the dealer needs to make a reasonable profit in order to stay in business.
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      09-10-2006, 11:08 AM   #5
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do you actualy WANT to go to europe for a vacation or are you trying to be a cheapskate and save a couple bucks by doing ED?
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      09-10-2006, 11:10 AM   #6
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Quote:
Originally Posted by sarafil
that's an understatement...

to me, letters like that convey a total lack of any for the fact that the dealer needs to make a reasonable profit in order to stay in business.

Thank you...I don't understand why people think they can get something for nothing. Do people actually think that those fancy dealerships are free to run/maintain???
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      09-10-2006, 11:36 AM   #7
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Quote:
Originally Posted by rgoel
(cross-post)
Would appreciate people's help. I'm planning to purchase a 335i via ED. I have drafted a letter which I intend to email or fax to 5-10 dealers in my vicinity (San Francisco, CA). The letter is below. Would appreciate any and all feedback before I send it out. Thanks in advance.


From: First Last
XXX-XXX-XXXX
email@email.com

To: BMW USA Dealer

Re: Intent to Purchase BMW 335i Coupe

Dear Sir/Madam:

I intend to purchase a new BMW 335i Coupe via BMW’s European Delivery program. I have already determined the configuration and ordering options, and am currently seeking a BMW dealer who is willing to do business with me immediately based on the specification indicated below. I am contacting multiple dealers.

Car configuration European Delivery INVOICE price
335i Base: $34,360
Premium Package (ZPP): $2,230
Sport Package (ZSP): $910
Comfort Access (322): $455
Metallic Paint (A22): $430
Park Distance Control (507): $320
Destination and Handling: $695
Subtotal: $39,400

Option Configuration
Paint – A22 Sparkling Graphite Metallic
Upholstery – LCSW Black Dakota Leather
Interior – 4AD Brushed Aluminum

In addition to the $39,400 European Delivery invoice price, I am willing to pay the following:
Dealer markup: Up to $1600
Tax: Actual
Title: Actual
License: Actual
MACO fees: $0
Marketing fees: $0
Other fees: $0

Therefore, the total I am willing to pay is up to $41,000 + tax + title + license.

I am also considering financing up to half of the purchase amount, though final payment terms are not yet decided.

I assure you that I am a serious buyer. Upon your agreement to the terms defined above, I fully intend to purchase the vehicle with minimal time required from the sales agent or sales dealership.

If you are interested in doing business with me, please contact me at the phone number or email address listed above at your earliest convenience.


Thank you for your time and consideration,


First Last

fixed your letter for you
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      09-10-2006, 11:38 AM   #8
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Quote:
Originally Posted by spots
I suspect that you will not get any replies. 600 for the dealer in profit is slim, especially on a new model. Increase that to 1000 or 1500 and you might get a hit. Remember once you fax it at 600 you really can't go back and offer more money. The dealership would probably just wait for your 3rd fax with even more profit.
I've never worked in a car dealership but it seems to me that the original poster has done all of the work. There is no salesperson required. The only thing the dealership need do is enter the requirements into the order computer, take delivery, and tax and license the vehicle. The delivery and handling (dealer prep) is included ($695), the buyer has already stated he would pay actual tax and license fees. How long will it take the sales department to do minimal work? If the dealership does it right they could wiggle a bunch of coveted 5's which I understand translates to profit in the form of bonus. Plus, wouldn't the "sale" help in increasing their allotment numbers?

Maybe I've just slipped my clutch.
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      09-10-2006, 12:52 PM   #9
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Interesting turn of the thread. What's wrong with being a cheapskate?
The dealers are always free to ignore the letter, it's good old "capitalism" at work. No one's forcing anyone into any deal.
Additionally, there is plenty of evidence that such deals have been accomplished in the past. Maybe not for the 335 yet, but someone's got to be the first.
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      09-10-2006, 01:29 PM   #10
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Well, it doesn't cost anything to try but I would think most dealers would not respond at $600.

I'd much rather form a personal relationship with a dealer and pay a bit more but get taken care of when in need too.
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      09-10-2006, 01:59 PM   #11
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Raise the dealer profit and loose all the formality. Do you really think an internet salesperson that gets hundreds of e-mails a day is going to read all of your text? She's going to see the 335 brand new model and $600 and click the "delete" button.

Shoot half of time, I don't read all of my work e-mails either. I read the main points and move on.
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      09-10-2006, 03:24 PM   #12
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Quote:
Originally Posted by SoYank
I've never worked in a car dealership but it seems to me that the original poster has done all of the work. There is no salesperson required. The only thing the dealership need do is enter the requirements into the order computer, take delivery, and tax and license the vehicle. The delivery and handling (dealer prep) is included ($695), the buyer has already stated he would pay actual tax and license fees. How long will it take the sales department to do minimal work? If the dealership does it right they could wiggle a bunch of coveted 5's which I understand translates to profit in the form of bonus. Plus, wouldn't the "sale" help in increasing their allotment numbers?

Maybe I've just slipped my clutch.
A few comments:

Yes, the client has done most of the work here by knowing what he wants. But, on the other hand, clients that come across with all this info and act like they know everything (which they probably do!) are also very high maintenance and WILL be calling/emailing you ALL THE TIME looking for status updates, etc. It's not like you place their order, take their money, and they go away. You still need to put a considerable amount of effort into responding to their requests for constant updates. For this, you should be able to make a **reasonable** profit. On a new, just out of the box 335i, I don't think $600 over invoice is reasonable.

Also, ED cars do not come out of dealer allocation. That means that this sale does not earn the dealer a future car, and it does not get a CSI follow-up call so no extra bonus for the dealer.

Finally, let me just clarify that I am not opposed to discounting as necessary to make a deal. A skinny deal is better than no deal at all. But, when someone sends you a fax or email saying "I'll buy this car from whoever sells it to me for $600 over invoice or less", it comes out as very impersonal and I have zero interest in even reading the rest of the message. If you walk into my showroom and are showing me signs that you are ready to buy from me if the numbers work, that's a different story. I won't respond to this $600 over invoice fax/email, but there's a good chance that I'd take that deal from soming sitting in front of me if that is the deal that we finally agree on.
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      09-10-2006, 05:14 PM   #13
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I'd just make the document a tender. Remove your expectation of pricing. If you receive more than 1 bid, ring up the 2nd lowest and ask them if they would like to beat the winning bid and receive your business. If they say no, ring the lowest bid and sign
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      09-10-2006, 07:04 PM   #14
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The correct base price for ED, I assume is 34,740
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      09-10-2006, 07:22 PM   #15
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Quote:
Originally Posted by sarafil
A few comments:

Yes, the client has done most of the work here by knowing what he wants. But, on the other hand, clients that come across with all this info and act like they know everything (which they probably do!) are also very high maintenance and WILL be calling/emailing you ALL THE TIME looking for status updates, etc. It's not like you place their order, take their money, and they go away. You still need to put a considerable amount of effort into responding to their requests for constant updates. For this, you should be able to make a **reasonable** profit. On a new, just out of the box 335i, I don't think $600 over invoice is reasonable.

Also, ED cars do not come out of dealer allocation. That means that this sale does not earn the dealer a future car, and it does not get a CSI follow-up call so no extra bonus for the dealer.

Finally, let me just clarify that I am not opposed to discounting as necessary to make a deal. A skinny deal is better than no deal at all. But, when someone sends you a fax or email saying "I'll buy this car from whoever sells it to me for $600 over invoice or less", it comes out as very impersonal and I have zero interest in even reading the rest of the message. If you walk into my showroom and are showing me signs that you are ready to buy from me if the numbers work, that's a different story. I won't respond to this $600 over invoice fax/email, but there's a good chance that I'd take that deal from soming sitting in front of me if that is the deal that we finally agree on.
That was a great reply, I couldn't agree with you more,except I usually answer those emails with thanks for contacting me and this is what I could sell you the vehicle for.Of course the dealership needs to make a profit on each vehicle that's sold and the CA's need to get paid for their time.Even if someone hands me an order,there is still quite a bit of time that goes into processing that order,doing all the followup,answering the additional emails,spending time going over the car,if it's available before it's ordered and going over it again when the car arrives back from Europe to explain things that might have been overlooked.
I enjoy the face to face contact,but because of the Internet, I don't meet a lot of my customers untill their car comes back from Europe.
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      09-10-2006, 08:21 PM   #16
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Thanks to all of the feedback from everybody - seems like there are really two separate issues:
Issue 1: To send out a letter at all or do all negotiations in person
Issue 2: If sending out such a letter, what price over invoice (if any) should be indicated

I can see why some of the dealers on this thread are opposed to sending out a letter. It definitely turns the car purchase from a relationship into a transaction, and a commodity transaction at that where the dealer rep is little more than an order-taker. I could certainly see why dealers would not like that and that in fact some dealers do much more than provide commodity service. However, that being said, I don't have the time to visit several dealers to find who has the best price. Seems like the best use of everybody's time is to send out the letter - if some dealers don't do business that way that's their prerogative to ignore it, whereas other dealers might prefer to respond. It does certainly seem that I should adjust the letter to be less formal and less text heavy.

Issue 2: In reading the message boards over the last month or so, people have reported transactions of $800, $1000, and $1250 over ED invoice. So as far as I know there is no precedent for $600 over ED invoice, but of course I have access to information on very few transactions. Is there any consensus on what would be a more reasonable offer (i.e., $800, $1000, $2000, etc. over invoice)?

Regarding the questions about my being a cheapskate, I am proud to say that I am: I don't believe in paying more than something is worth, as that would be wasteful. If a dealer is willing to sell at $X over invoice and I'm willing to pay $X over invoice, then why should I pay $X + $500? If I can only have this car for $1000 over invoice or $2000 over invoice, I can tell you right now that I'm willing to pay that. I'm just trying to find the optimum price, which to me is the lowest price a dealer is willing to make a sale at.

Regarding why I'm doing ED, it's a bit of both - I work for a company with HQ in Germany so I go there on a periodic basis. I haven't decided if I will turn the trip into a vacation but in my opinion that is irrelevant to the original intention of the post.
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      09-10-2006, 08:29 PM   #17
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Quote:
Originally Posted by rgoel
Issue 2: In reading the message boards over the last month or so, people have reported transactions of $800, $1000, and $1250 over ED invoice. So as far as I know there is no precedent for $600 over ED invoice, but of course I have access to information on very few transactions. Is there any consensus on what would be a more reasonable offer (i.e., $800, $1000, $2000, etc. over invoice)?.
Most of the prices you reference relate to cars which were not just launched. For newly-launched cars, there is relatively little discounting.

Since you go to Europe frequently, you could wait six months at which point you might find a dealer willing to deal.

In addition, those who paid $800 or similar over invoice probably paid a marked up interest rate or a higher documentation fee.

European Delivery requires a lot of work on the part of the dealer even when it appears you are just giving them an order and there are no bonuses or incentives for the sale. It does bring an extra car into the dealership for service and that is where the dealership makes its money.
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      09-10-2006, 09:20 PM   #18
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I just think it is funny that you are going to pay $40K plus and are worrying about $200 (0.5%)
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      09-10-2006, 09:50 PM   #19
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Quote:
Originally Posted by whippersnapper
I just think it is funny that you are going to pay $40K plus and are worrying about $200 (0.5%)


+1
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      09-10-2006, 09:55 PM   #20
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so true
Quote:
Originally Posted by whippersnapper
I just think it is funny that you are going to pay $40K plus and are worrying about $200 (0.5%)
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      09-10-2006, 10:36 PM   #21
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I don't understand the comment "I just think it is funny that you are going to pay $40K plus and are worrying about $200 (0.5%)". As I already stated in my posting, I'm willing to pay $600, $1000, or $2000 over invoice. I'm just using this as a negotiating tactic to get a low price. Clearly I'm not "worried" about $200.

Based on your logic, you could end up at $50K going up $200 at a time. I think the question I asked previously still stands: what's the perspective on how much over ED is sufficient to get a deal done? Perhaps the tender is the way to go...
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      09-10-2006, 11:51 PM   #22
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you aren't rakesh goel, my old CE teacher from Cal Poly SLO?????
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