Dealer margin...???

bronco · 12-01-2006, 08:08 AM

I was looking at a scanned document about the “Confidential 2007 E92 3 Series Pricing” Here is the link: http://www.e90post.com/forums/attach...5&d=1152216122

But somehow, I cant believe those wholesale figures. I truly think that dealers have bigger margin. If you take a look at the wholesale pricing (which had the biggest margin), you will see that they have ONLY about $4000….
This seems very very low to me…If you think about it – how many cars a BMW dealership sells in a month??? Maybe 15-20, if that much, and you have at least 5-10 salesmen + mechanics in the shop + managers + financial dept….etc
Am I not calculating stuff right, or these numbers are not very confidential, and were sent so we (the general public) thinks that dealers cant give us big discounts???

It is very interesting to hear from an actual SA, if possible.

Thanks guys! Happy Friday

KL2DC · 12-01-2006, 08:16 AM

The new car sales, used car sales, parts department and service department are often different profit centers. Don't forget, extra income is also earned from volume, survey scores, financing etc

canucklion · 12-01-2006, 08:20 AM

+1, new car sales is not the only source of income

Quote:

Originally Posted by KL2DC

The new car sales, used car sales, parts department and service department are often different profit centers. Don't forget, extra income is also earned from volume, survey scores, financing etc

bobnaz · 12-01-2006, 09:09 AM

Quote:

Originally Posted by bronco

I was looking at a scanned document about the “Confidential 2007 E92 3 Series Pricing” Here is the link: http://www.e90post.com/forums/attach...5&d=1152216122

But somehow, I cant believe those wholesale figures. I truly think that dealers have bigger margin. If you take a look at the wholesale pricing (which had the biggest margin), you will see that they have ONLY about $4000….
This seems very very low to me…If you think about it – how many cars a BMW dealership sells in a month??? Maybe 15-20, if that much, and you have at least 5-10 salesmen + mechanics in the shop + managers + financial dept….etc
Am I not calculating stuff right, or these numbers are not very confidential, and were sent so we (the general public) thinks that dealers cant give us big discounts???

It is very interesting to hear from an actual SA, if possible.

Thanks guys! Happy Friday

Most dealerships make their money from the service dept.

canucklion · 12-01-2006, 09:30 AM

the used card department does pretty good as well, the profit margin on used cars are higher

Quote:

Originally Posted by bobnaz

Most dealerships make their money from the service dept.

Bimmerista · 12-01-2006, 09:33 AM

Well my dealer sells about 1,000 new cars a year.

They make very often more profit per car from sales of used cars - and the BMW certified used car programme is very popular here.

The dealer also makes a very good living off the warranty services (charges that are paid to it by BMW - the ultimate cost of which of course gets passed on to the consumer through the car financing rates), as well as the repair work done on out-of-warranty cars.

But the actual profit margin on the new cars is about 8% and that is considered very good for the car business (in the non-exotic market segment)

KL2DC · 12-01-2006, 09:33 AM

don't forget the paint protection package

Russellnyc · 12-01-2006, 09:34 AM

It will all make sense when you try to trade a car in at a dealership. They may be getting $2-3k on the new car, but they'll make $7-10k off a nice trade-in if you let them.

nightkhan · 12-01-2006, 09:34 AM

I was at a BMW event recently which was promoting the 335, and I overheard a couple guys talking about how much a dealership makes. One of them called up his friend who works at one of the dealerships, and I heard him mentioning that they bring in $2 million just from the service department. Guess those free maintenance for the first 45k miles isn't slowing them down at all.

bronco · 12-01-2006, 10:03 AM

WOW...So I should not feel bad to ask for $3000 OFF the price they give me when I go to buy my 335i???

KL2DC · 12-01-2006, 10:04 AM

Quote:

Originally Posted by bronco

WOW...So I should not feel bad to ask for $3000 OFF the price they give me when I go to buy my 335i???

I don't see why you should....aim for $500 over invoice which is doable on an E90 and watch those BS fees.

Russellnyc · 12-01-2006, 10:19 AM

Case in point! Want to talk about dealer margin on trade-ins!?
http://www.e90post.com/forums/showthread.php?t=31444
$tealer FTW!

canucklion · 12-01-2006, 10:20 AM

they still bill BMW for those 'free maintenance" and any warranty work

Quote:

Originally Posted by nightkhan

Guess those free maintenance for the first 45k miles isn't slowing them down at all.

bronco · 12-01-2006, 10:26 AM

Quote:

Originally Posted by KL2DC

I don't see why you should....aim for $500 over invoice which is doable on an E90 and watch those BS fees.

Should I brag about discounted features/packages? Because difference between wholesale and retail is not very big...

canucklion · 12-01-2006, 10:29 AM

what do you mean 'brag'?

KL2DC · 12-01-2006, 10:31 AM

Quote:

Originally Posted by canucklion

what do you mean 'brag'?

+2 .... brag or rag?

Don't brag its not cool...

bronco · 12-01-2006, 11:47 AM

heheh Should I really push for some $$$

off the price of the features/packages?

KL2DC · 12-01-2006, 11:53 AM

Bronco...in my case I got $500 over invoice for the base car and all options at cost. Other dealers may charge you options at retail but offer the base car at $XXX over invoice. Just be clear on what you want when you start your negotiations and stick to it...

RichReg · 12-01-2006, 12:08 PM

I completely agree with where Bronco is coming from.
Those wholesale & retail prices are freely available for a reason...so that no one gets any ideas about really & truly low-balling a dealership.

Fact of the matter is, not only do dealers make tons on service & warranty claims, but its my understanding that
they make a specific amount every month (paid to them by BMWNA) for each & every unit they sell. This goes above & beyond whatever profits they make on any one specific deal.

KL2DC · 12-01-2006, 12:18 PM

Quote:

Originally Posted by RichReg

I completely agree with where Bronco is coming from.
Those wholesale & retail prices are freely available for a reason...so that no one gets any ideas about really & truly low-balling a dealership.

Fact of the matter is, not only do dealers make tons on service & warranty claims, but its my understanding that
they make a specific amount every month (paid to them by BMWNA) for each & every unit they sell. This goes above & beyond whatever profits they make on any one specific deal.

Yep...as mentioned. This is where those infamous survey forms and the need for all 5s come in as well....

kuthair · 12-01-2006, 12:19 PM

Quote:

Originally Posted by RichReg

they make a specific amount every month (paid to them by BMWNA) for each & every unit they sell.

Isn't that called a holdback? According to Edmunds.com BMW doesn't have holdbacks.

KL2DC · 12-01-2006, 12:20 PM

Quote:

Originally Posted by kuthair

Isn't that called a holdback? According to Edmunds.com BMW doesn't have holdbacks.

They don't, my understanding is its like a holdback but not really...sorry no specifics beyond that.

12-01-2006, 08:08 AM	#1
bronco Colonel 76 Rep 2,104 Posts Drives: e92 Join Date: Nov 2006 Location: Atlanta iTrader: (0)	Dealer margin...??? I was looking at a scanned document about the “Confidential 2007 E92 3 Series Pricing” Here is the link: http://www.e90post.com/forums/attach...5&d=1152216122 But somehow, I cant believe those wholesale figures. I truly think that dealers have bigger margin. If you take a look at the wholesale pricing (which had the biggest margin), you will see that they have ONLY about $4000…. This seems very very low to me…If you think about it – how many cars a BMW dealership sells in a month??? Maybe 15-20, if that much, and you have at least 5-10 salesmen + mechanics in the shop + managers + financial dept….etc Am I not calculating stuff right, or these numbers are not very confidential, and were sent so we (the general public) thinks that dealers cant give us big discounts??? It is very interesting to hear from an actual SA, if possible. Thanks guys! Happy Friday __________________ SaaS - The world of tomorrow is already here...www.saaschronicles.com
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12-01-2006, 08:16 AM	#2
KL2DC Moderator 318 Rep 17,767 Posts Drives: F36 428i,E90 328i, E85 Z4 3.0i Join Date: Jan 2006 Location: DC Metro iTrader: (23) Garage List 2015 F36 428i [0.00] 2011 E90 328i [0.00] 2006 E85 Z4 3.0i [0.00]	The new car sales, used car sales, parts department and service department are often different profit centers. Don't forget, extra income is also earned from volume, survey scores, financing etc __________________ Official DC Metro Registry - Current, New & Prospective Area Members Roll Call!
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12-01-2006, 09:33 AM	#6
Bimmerista Major General 82 Rep 5,732 Posts Drives: superstock Join Date: Aug 2005 Location: Montreal, Quebec, Canada iTrader: (0)	Well my dealer sells about 1,000 new cars a year. They make very often more profit per car from sales of used cars - and the BMW certified used car programme is very popular here. The dealer also makes a very good living off the warranty services (charges that are paid to it by BMW - the ultimate cost of which of course gets passed on to the consumer through the car financing rates), as well as the repair work done on out-of-warranty cars. But the actual profit margin on the new cars is about 8% and that is considered very good for the car business (in the non-exotic market segment) __________________ __________________________ 2016 435 xdrive GC white on black leather interior, Msport1, Msport2, premium package 2015 Lincoln MKX, silver on brown leather, premium package - that's right! Techno-Groovy baby
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12-01-2006, 09:33 AM	#7
KL2DC Moderator 318 Rep 17,767 Posts Drives: F36 428i,E90 328i, E85 Z4 3.0i Join Date: Jan 2006 Location: DC Metro iTrader: (23) Garage List 2015 F36 428i [0.00] 2011 E90 328i [0.00] 2006 E85 Z4 3.0i [0.00]	don't forget the paint protection package __________________ Official DC Metro Registry - Current, New & Prospective Area Members Roll Call!
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12-01-2006, 09:34 AM	#8
Russellnyc Razor sharp handling 23 Rep 619 Posts Drives: 2007 e92 335i 6MT Join Date: Oct 2006 Location: NYC iTrader: (0)	It will all make sense when you try to trade a car in at a dealership. They may be getting $2-3k on the new car, but they'll make $7-10k off a nice trade-in if you let them. __________________ 1997 E36 328is Arctic Silver: 1997-2003 100k Mi. SOLD 2000 Audi TT Quattro Coupe Lake Silver: 2003-present 35k Mi. SOLD 2006 Lotus Elise Polar Blue/Red 2007 E92 335i Spacegrau/Coral/Al \| ZSP/ZPP/ZCW/CA/PDC/NAV Broken in
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12-01-2006, 09:34 AM	#9
nightkhan Private Woodman 163 Rep 467 Posts Drives: 328i, JB, Space Rocket Join Date: Jan 2006 Location: San Francisco iTrader: (3)	I was at a BMW event recently which was promoting the 335, and I overheard a couple guys talking about how much a dealership makes. One of them called up his friend who works at one of the dealerships, and I heard him mentioning that they bring in $2 million just from the service department. Guess those free maintenance for the first 45k miles isn't slowing them down at all. __________________ Former King of Stock... E90 325i, Jet Black: Done with Current: E92 328i, Sports Package, 335i wheels, Power Seats, BMW Assist/Bluetooth, IPod/USB, heated seats, //M Short Shifter Future Mods: 19" CSL's, KW V2, 15mm spacer, tints
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12-01-2006, 10:03 AM	#10
bronco Colonel 76 Rep 2,104 Posts Drives: e92 Join Date: Nov 2006 Location: Atlanta iTrader: (0)	WOW...So I should not feel bad to ask for $3000 OFF the price they give me when I go to buy my 335i??? __________________ SaaS - The world of tomorrow is already here...www.saaschronicles.com
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12-01-2006, 10:19 AM	#12
Russellnyc Razor sharp handling 23 Rep 619 Posts Drives: 2007 e92 335i 6MT Join Date: Oct 2006 Location: NYC iTrader: (0)	Case in point! Want to talk about dealer margin on trade-ins!? http://www.e90post.com/forums/showthread.php?t=31444 $tealer FTW! __________________ 1997 E36 328is Arctic Silver: 1997-2003 100k Mi. SOLD 2000 Audi TT Quattro Coupe Lake Silver: 2003-present 35k Mi. SOLD 2006 Lotus Elise Polar Blue/Red 2007 E92 335i Spacegrau/Coral/Al \| ZSP/ZPP/ZCW/CA/PDC/NAV Broken in
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12-01-2006, 10:29 AM	#15
canucklion pull my finger to get your kinder® surprise 148 Rep 10,455 Posts Drives: circles around you Join Date: Dec 2005 Location: Toronto, Canada iTrader: (9)	what do you mean 'brag'? __________________
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12-01-2006, 11:47 AM	#17
bronco Colonel 76 Rep 2,104 Posts Drives: e92 Join Date: Nov 2006 Location: Atlanta iTrader: (0)	heheh Should I really push for some $$$ off the price of the features/packages? __________________ SaaS - The world of tomorrow is already here...www.saaschronicles.com
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12-01-2006, 11:53 AM	#18
KL2DC Moderator 318 Rep 17,767 Posts Drives: F36 428i,E90 328i, E85 Z4 3.0i Join Date: Jan 2006 Location: DC Metro iTrader: (23) Garage List 2015 F36 428i [0.00] 2011 E90 328i [0.00] 2006 E85 Z4 3.0i [0.00]	Bronco...in my case I got $500 over invoice for the base car and all options at cost. Other dealers may charge you options at retail but offer the base car at $XXX over invoice. Just be clear on what you want when you start your negotiations and stick to it... __________________ Official DC Metro Registry - Current, New & Prospective Area Members Roll Call!
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12-01-2006, 12:08 PM	#19
RichReg Colonel 121 Rep 2,099 Posts Drives: 2015 435Xi GC & 2000 323Ci. Join Date: Apr 2005 Location: New Jersey iTrader: (0)	I completely agree with where Bronco is coming from. Those wholesale & retail prices are freely available for a reason...so that no one gets any ideas about really & truly low-balling a dealership. Fact of the matter is, not only do dealers make tons on service & warranty claims, but its my understanding that they make a specific amount every month (paid to them by BMWNA) for each & every unit they sell. This goes above & beyond whatever profits they make on any one specific deal.
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