Originally Posted by Mech_Man
First, there are a lot of variables and unknowns in what you presented. It's really not enough to say if it's a good deal. And paying any attention at ALL to "List", "Sticker", and "Cost" is a waste of time. Those numbers were made by the marketing dept, and don't have any correlation to real street market value.
Most guys I know would take more time researching and choosing a plasma TV by features and prices than what they will spend choosing a car. [shrug]
This is a complicated decision - expect to invest hours of research and deal-making. If you do, you could spend THOUSANDS of dollars less, get the specific car and features you want, (and maybe save enough to get that plasma!)
Here is the process I worked out when I got an e92 last summer. I typed it all up neat and tidy a while back for another forum thread. I hope it's worth the reading time:
Also, this is used to come up with only the Cost of the Car. The lease arrangement and any trade-ins should each be handled as separate additional financial steps, AFTER you have the final car drive-out cost.
BACKGROUND:
I did the whole "eMailing every dealer for three states, to find one who'll work a deal up from Invoice, rather than down from MSRP".
I ended up at about $9,000 below the final, all-included MSRP. [HAH!] ... Paying a reasonable dealer profit and NO extra fees ... and I knew where every penny was. But it took me hours to do all that research, and luck in finding a really great sales associate and dealer: Myrtle Beach BMW (previously Fowler Motors, Conway, SC).
CAR PURCHASE FORMULA (with BMW-specific terms):
Over the last few years, dealers have recognized that car buyers have gotten smarter, and have better sources of info, so just buying "Invoice" plus profit won't work. They have adjusted by adding "fees" to the cost, AFTER the 'invoice'. So the trick now is to get ALL the costs into one formula.
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Invoice
The factory set cost of the basic car, without any factory options or dealer accessories.
+ Factory Installed Options
Sum of the invoice cost for each of the options you wish to have, should be available from the same info source as the car's bare-invoice cost.
Use the actual option codes for all your choices, so there are no mistakes. Invoice pricing available in the Car Ordering sub forum.
+ MACO
Variable cost, non-negotiable: advertising co-op fee that varies from dealer to dealer, from $0 to about $400, I paid $0
+ Training Fee
Fixed, non-negotiable, I paid $180
+ Destination & Handling
Fixed, non-negotiable, I paid $775, (see note below about the PDC delivery option.)
+ Dealer Profit
This is the only real number that should be negotiated with the dealer. Surf message boards to determine what the specific car style and major options, in your specific area, at your specific point in time, should cost, as a net-profit. My own opinion is that it should vary from:
$100 for an ultra-simple deal on a car that is commonly found, to
$500 for something like a common convertible, to
maybe $1,000 for a hard to find 'vert in a choice color selection with unusual options .and is a new release, selling out everywhere.
Your sales advisor will do several hours of work, maybe even getting others to help. They are a business and that's what they do and deserve a reasonable profit.
+ Other Fees
This is the way that "Stealers" add to their profit without you knowing it. Examples are: Handling Fees, Cleaning Fees, Full Tank Fees, Processing Fees, or I've even seen a line cost "Additional Dealer Profit", etc, etc, etc. These are all bogus, or for actions that should actually be covered in the sellers-overhead, Do NOT allow any additional fees to be added, or if you do, then deduct that amount from the Dealer Profit line.
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= "CAR COST (pre TT&T)"
My experience is that this is the number that I negotiated, but I required all the above fees listed too, and worked backwards.
+ Tax
Fixed, non-negotiable, set by the state where the dealer is located.
+ Tag + Title
AKA Doc Fee, or documentation fees. The cost you pay the dealer if you decide to have them handle the paperwork of applying for a license tag, and a state title. You can do all this yourself and ask the dealer to drop these fees. Check your state's DoT website for what the actual chargers are, and decide if you want to hassle with it yourself. I paid the dealer $200 and was happy to not have to stand in a very long line at the local DMV during business hours to still pay out about $155.
+ After Factory Accessories
Sum of dealer installed accessories, including tax, such as HD radio, Dealer installed factory alarm, etc
Be careful as these numbers are what the market will bear. I got a final pre-T,T & T estimate, then and only then told the dealer my after-factory accessory wishes. I chose a few, declined a few, and elected to have some done by a 3rd party. (I got a factory alarm that was installed at the dealer so it would be covered by the whole-car warrantee and be fully integrated with the car, and the CD changer in the trunk --- ditto, but did window tinting by someone else, later). Treat this negotiation like you were negotiating separate deals with separate car mechanic shops - as that is what you really are doing anyway. If you are in a strong bargaining position, try offering to pay their parts price, but only if they will install it for free, at THEIR convenience, (when they have slack time in the shop), That way it actually doesn't cost them anything so they may agree, just to close the deal.
- Rebate
aka Option Credit, aka Dealer Credit, aka Trunk Money.
This is subtracted AFTER tax, not before.
This was the hardest piece of info to find, and I searched the net, and several boards. But I found over $1,200 in Trunk Money, so it was WELL worth my time to do the research. Another comment: I understand that many dealers will quietly take this credit for themselves, as extra 'hidden' profit, unless you let them know about it and ask for it. As they are under no obligation to turn it over to you anyway, all I can say is make sure you know what's out there, and put the numbers into the formula, either as a credit on your side, or an extra profit on the dealer's side.
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= Final Price (AKA "check price" aka "drive-out price")
Total cost to you. or what your one check is made out for.
Again, this doesn't count any trade-in credits or lease figures. The above number is a single cost you should now plug into those negotiations.
NOTES:
If you can schedule a week or two, consider doing the ED (European Delivery). I haven't so check it out elsewhere. However, if you do, then the MACO and Training/Destination fees are not added.
For US delivery, you can elect to do a PDC delivery (Performance Driving Center delivery option instead of having the car shipped to your selling dealer), You don't get a refund on the price of the Destination & Handling, but if you can find the time to go meet your car, and can work out the 1-way travel, do it, it's incredibly worth it.
If you do this, then it really doesn't matter from who you buy it. You could make the purchase with a dealer on the other side of the country. Or even better, look around this forum for dealers here. The driving school, factory tour, death trail test-drive of the x5, and museum were all just as incredible an experience as they said it would be.
Good Luck!
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