# Question on dealer profit areas



## rocky (Jun 30, 2004)

I have done some analysis and these are areas I have come up with that a dealer makes “profit” on a lease. Please correct me if I am wrong:
1. Money factor – addition to “buy rate” from BMWNA
2. Acquisition fee – addition to “buy rate” from BMWNA (usually $525)
3. Document fee – in addition to actual fees for title, reg, etc.
4. Dealer cash – keeping part of it or subtracting all form inv cost
5. Price OVER invoice cost

I have currently “negotiated” what I think is a reasonably good lease deal for a 745.
The deal I currently have is for the same buy rate on the money factor (I think) as what dealer is buying it for from BMW, and the price I am paying over invoice is relatively small. Dealer is charging $725 for acquisition fee ($200 over $525 acq fee base)
Dealer is charging additional $198 for documentation fee in addition to title transfer docs and inspection sticker. Some area dealers charge nothing for a doc fee and some charge a nominal amount. This dealer WILL NOT waive the doc fee, but I think that they have been reasonable with the other profit areas, so I can swallow this, even though I’m not happy.

The dealer has shown me a printout of the invoice. Another dealer has also shown me the printout of the invoice and there seems to be a difference in one item and I have a question about this item and another:
“Training service fee” $160 – what is this – some dealers have it included as part of base invoice?
“MACO fee” (supposedly some kind of cooperative advertising fee for the area) $400 –what is this and why would one dealer have it and not another?

I believe that a dealer has a right to make a profit – that is why they are in business obviously. Yet, I would like to know just how much the profit is and if the two fees above are normal. Are these part of their profit – do they have yet another invoice that I am not being shown?


----------



## GabeHaim (Feb 18, 2004)

I can only speak for what I make money on a vehicle:

1. I do not make money on the money factor (I use what BMW tells me to use)
2. Acquisition Fee (NY is $800 and I cannot charge more than that!)
3. No Doc fee at my dealership
*4. Amount over invoice
5. Hold Back money*

I have no training service fee but I do have a MACO charge, which is an advertising cost ($200)--> standard, if they charge $400 they are charging $200 extra!

let me know if you have any questions

Gabriel Haim
Rallye BMW


----------



## SARAFIL (Feb 19, 2003)

rocky said:


> "MACO fee" (supposedly some kind of cooperative advertising fee for the area) $400 -what is this and why would one dealer have it and not another?


MACO varies dealer to dealer, region to region. Some dealers have a greater MACO fee than others, and some don't even have MACO. The reason is that some dealers don't participate in market co-op advertising, and of the ones that do, some are located within different co-op groups that spend different amounts on advertising. Also, if there are more dealers in a small area, you can obviously expect a lower MACO as more dealers split the advertising cost.

The number you see on their invoice for MACO is legitimate-- there is no way for them to change the number that shows up. They might tell you one thing, but the truth is the number that shows up on the invoice printout.


----------



## bimmerguy (Dec 26, 2001)

GabeHaim said:


> I can only speak for what I make money on a vehicle:
> 
> 1. I do not make money on the money factor (I use what BMW tells me to use)
> 2. Acquisition Fee (NY is $800 and I cannot charge more than that!)
> ...


The dealer does makes money on the money factor, BMW gives you guys a buy rate and then you mark it up a bunch of points.

Some dealers add money to the Acq. fee.

How can you have no Doc. fee? Its cool if you don't, every dealer i've been to does.


----------



## jetstream23 (Mar 9, 2004)

My dealer wants to charge me $388 for documentation. There are no other fees besides the License (about $600). Does this sound like a good deal?


----------

