# Dealer Money factor markup



## GerWil (Dec 18, 2006)

Since this site is inhabited with client advisers, I thought it appropriate to post a not so good money factor markup experience, I had with a New England dealer that I have used for five purchasers. 
I currently have an ED purchase order for a 2016 340i xDrive, priced at $750 over ED invoice; delivery August 24th. I had expected to sign the Lease Agreement a week before my departure and asked my CA to get a lease agreement printout for me to review. The agreement added a .0004 money factor markup to the .00111 rate (ED & MSD). In past leases I have been emphatic about specifying the rate parameters, but this time I was careless. The CA knows my unhappiness and in a message to him stressed that with ED's an order has to be processed far in advance as compared to a standard delivery where all is negotiated at once, so there has to be an element of trust. The Finance Manager then offered to take .0001 off the markup, which I thought insulting. They also know that I have another BMW lease expiring in April that will generate another order
I find it hard to believe that they are so shortsighted, or I am wondering if all the New England dealers are doing the same markup routine.


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## tturedraider (Nov 11, 2005)

GerWil said:


> Since this site is inhabited with client advisers, I thought it appropriate to post a not so good money factor markup experience, I had with a New England dealer that I have used for five purchasers.
> I currently have an ED purchase order for a *2016 340i xDrive, priced at $750 over ED invoice*; delivery August 24th. I had expected to sign the Lease Agreement a week before my departure and asked my CA to get a lease agreement printout for me to review. The agreement added a .0004 money factor markup to the .00111 rate (ED & MSD).


I'm curious, do you have a thorough understanding of how BMW dealers are compensated for ED deals?


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## BigJay2050 (Jun 14, 2015)

tturedraider said:


> I'm curious, do you have a thorough understanding of how BMW dealers are compensated for ED deals?


I do not. Can you please share?


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## Ninong (May 20, 2014)

GerWil said:


> Since this site is inhabited with client advisers, I thought it appropriate to post a not so good money factor markup experience, I had with a New England dealer that I have used for five purchasers.
> I currently have an ED purchase order for a 2016 340i xDrive, priced at $750 over ED invoice; delivery August 24th.


Congratulations! That sounds like a fantastic deal for a 2016 340i xDrive. You did very well indeed.



> I had expected to sign the Lease Agreement a week before my departure and asked my CA to get a lease agreement printout for me to review. The agreement added a .0004 money factor markup to the .00111 rate (ED & MSD). In past leases I have been emphatic about specifying the rate parameters, but this time I was careless.


If you have used the same CA for five cars already, then I'm surprised, even shocked, that he didn't go over all the details of the agreement with you at the time you agreed to the deal. After all, the money factor is a big part of the deal on any lease deal. It's not just the $ amount over invoice that is negotiated, but also the money factor on a lease or the APR on a loan. Unfortunately, you forgot to bring that up to make sure everybody was on the same page.

Dealers are in business to make a profit and the slight markup in the money factor that is allowed by BMWFS is part of the total deal, not just the amount over invoice. On the other hand, your client adviser handled this transaction poorly. He pushed through a very low gross deal with full markup on the money factor but now he has a pissed off customer. You may already know this, but the dealers do not get anything on the backend in the way of bonus money on a European Delivery car like they do on cars out of stock or orders placed for regular dealership delivery. They would much rather you order the car for regular delivery instead of European Delivery. They would make more money.



> The CA knows my unhappiness and in a message to him stressed that with ED's an order has to be processed far in advance as compared to a standard delivery where all is negotiated at once, so there has to be an element of trust. The Finance Manager then offered to take .0001 off the markup, which I thought insulting. They also know that I have another BMW lease expiring in April that will generate another order
> I find it hard to believe that they are so shortsighted, or I am wondering if all the New England dealers are doing the same markup routine.


The Finance Manager doesn't want to give away profit that affects his/her pay. You could have ranted to the general sales manager and demanded that they at least split the money factor markup for you based on the fact that you are a repeat customer and the fact that your client adviser has previously given you the buy rate and didn't mention anything about a markup this time.

The bottom line is that your client adviser should have settled all of the terms with you as part of the deal. There is no deal unless both of you understand everything you are agreeing to. The money factor is part of that agreement.

Don't even let them order a car for you without a detailed printout of the entire deal, including all of the payment details with a full disclosure. That should be done before you even tell them to go ahead and order your car. And yes, you're right, they should present the lease to you for your signature a week before you depart. That's standard policy at most dealerships, although exceptions are frequently made to accommodate customers who prefer to sign their lease just a day or two before they depart.


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## tturedraider (Nov 11, 2005)

BigJay2050 said:


> I do not. Can you please share?





Ninong said:


> .....You may already know this, but the dealers do not get anything on the backend in the way of bonus money on a European Delivery car like they do on cars out of stock or orders placed for regular dealership delivery. They would much rather you order the car for regular delivery instead of European Delivery. They would make more money.


^ this.

All that talk you see here about the importance of giving 10s on the survey so the dealer will get their Customer Satisfaction Index/CSI bonus money that enables them to make skinny deals, that does not exist for ED deals. The ED savings from which the OP is benefiting is coming straight out of the dealer's bottom line. http://www.bimmerfest.com/wiki/index.php/ED_Summary

The sum total the dealer is making from this deal is the $750 over invoice plus their markup on the MF. From that the dealer must pay the CA, the finance guy, the sales manager, the general manager, and every other expense associated with processing the ED deal.

Personally, I think dealers are dumb to make such skinny ED deals. I'm not saying I think dealers should not discount from ED MSRP, but I think extreme discounts are unwise.


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## GerWil (Dec 18, 2006)

Ninong said:


> Congratulations! That sounds like a fantastic deal for a 2016 340i xDrive. You did very well indeed.
> 
> The Finance Manager doesn't want to give away profit that affects his/her pay. You could have ranted to the general sales manager and demanded that they at least split the money factor markup for you based on the fact that you are a repeat customer and the fact that your client adviser has previously given you the buy rate and didn't mention anything about a markup this time.
> 
> ...


You are completly correct in everything you say, but I was careless because I needed a specific early delivery date. You probably recall that many were asking about the release of the F30 order guides; which finally came out the end of May. I had to push the CA to submit a pre reservation form, before the order could actually be placed, and all was very hectic until I had a confirmed delivery date. I have always managed to get $750 over invoice on my 5 ED's; so the dealer must be making some profit on these ED's (btw this is a large dealer). Unfortunately my CA's mode is to put as little in writing as possible, but I have managed in the past to work things out. The problem with ED's especially when one wants delivery of a model that has not started production is that it is hard to focus on lease terms for a lease that may not start for 4 or 5 months. I have sent an email to the General Manager, so will see if the markup is final. I do recognize that I have been been doing OK on pricing, but I have also been an easy customer for the CA. I give him the exact order details plus a lot of European delivery experience.


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## GerWil (Dec 18, 2006)

tturedraider said:


> ^ this.
> 
> All that talk you see here about the importance of giving 10s on the survey so the dealer will get their Customer Satisfaction Index/CSI bonus money that enables them to make skinny deals, that does not exist for ED deals. The ED savings from which the OP is benefiting is coming straight out of the dealer's bottom line. http://www.bimmerfest.com/wiki/index.php/ED_Summary
> 
> ...


You have a point in what you say about ED profits, but here is a quote from the same ED Wiki that you cited:
"You also can save money through European Delivery because the price is more negotiable with some dealers. Cars sold through ED generally do not come out of the dealer's allocation--in the past M cars and newly introduced models where supply is limited (e.g. coupes and convertibles in 2007) have reduced a dealer's allocation. The net result--a dealer is selling an extra car, rather than one of his allocated cars that he could sell to someone else at close to MSRP, as is the case with US delivery. Not all dealers realize that ED cars are basically bonus sales. Many refuse to negotiate off of the ED MSRP price, or try to explain that there are extra costs associated with ED for the dealer (where there are none). Generally speaking, if your dealer says this, you should look for another dealer. It is routine to pay $500 to $700 above Euro Delivery Wholesale Pricing (which should be provided to you), with no additional dealer fees aside from the typical tax, title and license fees (which vary from state to state). Note that the "Training Service Fee" is not to be charged for ED sales."
My annoyance was that I have leased in the past without the markup.


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## Ninong (May 20, 2014)

Nothing is final until you sign the lease. That's final.


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## ard (Jul 1, 2009)

"Well, you guys have me in a box on this ED, but it will cost you on the next car and on the survey"

Nothing personal, just business.


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## miamiboyca (Jun 19, 2012)

GerWil said:


> Cars sold through ED generally do not come out of the dealer's allocation--in the past M cars and newly introduced models where supply is limited (e.g. coupes and convertibles in 2007) have reduced a dealer's allocation. The net result--a dealer is selling an extra car, rather than one of his allocated cars that he could sell to someone else at close to MSRP, as is the case with US delivery.


Very important point... they will still make all the money on their US allocations, and this is a chance at extra revenue.

Now that being said, OP got a great deal on a brand new model, you should not stress too much about the small variance. As for trust - there is no trust in business.

Their is faith - "I have faith that the people I do business with negotiate in good faith. They can trust that I will check everything before I sign.":thumbup:


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## [email protected] BMW (Aug 2, 2010)

Let me put this out there.. +1 t...traider said it well.....Personally I used to do $500 over invoice Ed deals years ago when I was trying to really get in the ED game. But for me and many other experienced CA's it has to make $ sense. Most people have no idea that on an ED transaction there is no $ kickback from BMW. So if a $500 deal is made ..THAT'S IT....... the salesman probably get a 20% COMMISSION... so $100. Now keep in mind he has to ORDER CAR, deal w/ changes in build... lock a date, shuffle times for clients flight etc., do a purchase order, run all the different lease/finance calculations, do the actual purchase contract... and all this before you have even left the US... next car gets transported back to US... so now you are fielding all sorts of questions like, where's my car?, why is it taking so long?. Finally the car gets back stateside... now you have to prep and, deliver car, process registration, activate BMW Assist and Sat radio. Now your job is finally done.. now if the clients wants a PC DELIVERY AND IS OUT OF STATE.. there are about 3 more critical steps.. now add another few more weeks to the process... so lets say the average time it takes to do a ED deal is 4 months. Now remember your CA/salesman made $100.... that was 4 months ago.. and he's still dealing with your ED deal. so that's $100 for the time he put in... wayyyyyyy below minimum wage.


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## FreqMan (Apr 20, 2012)

This discussion provides insight into how BMW makes money considering the ED invoice price is significantly below US invoice. It appears corporate BMW makes the same profit but most (if not all) of the marketing costs that originate within the US (dealer sales and other costs; incentives) are removed to determine the ED invoice price calculation. Yet the dealer is still on the hook for the costs incurred during the transaction (but dealers can add their processing fees). Of course, the brand and the dealer can earn loyalty via the ED program. 

ED sales likely go to those who are enthusiastic towards European brands so a quest for loyalty can make sense.

Thanks to Greg and tturedraider for the inside info.


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## BigJay2050 (Jun 14, 2015)

Ninong said:


> Nothing is final until you sign the lease. That's final.


Unless the dealer calls you back a month and a half later letting you know there was a problem with the lease and you need to sign a new one.


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## BigJay2050 (Jun 14, 2015)

tturedraider said:


> ^ this.
> 
> All that talk you see here about the importance of giving 10s on the survey so the dealer will get their Customer Satisfaction Index/CSI bonus money that enables them to make skinny deals, that does not exist for ED deals. The ED savings from which the OP is benefiting is coming straight out of the dealer's bottom line. http://www.bimmerfest.com/wiki/index.php/ED_Summary
> 
> ...


Thank you for the detail, much appreciated. :thumbup:


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## miamiboyca (Jun 19, 2012)

[email protected] BMW said:


> Let me put this out there.. +1 t...traider said it well.....Personally I used to do $500 over invoice Ed deals years ago when I was trying to really get in the ED game. But for me and many other experienced CA's it has to make $ sense. Most people have no idea that on an ED transaction there is no $ kickback from BMW. So if a $500 deal is made ..THAT'S IT....... the salesman probably get a 20% COMMISSION... so $100. Now keep in mind he has to ORDER CAR, deal w/ changes in build... lock a date, shuffle times for clients flight etc., do a purchase order, run all the different lease/finance calculations, do the actual purchase contract... and all this before you have even left the US... next car gets transported back to US... so now you are fielding all sorts of questions like, where's my car?, why is it taking so long?. Finally the car gets back stateside... now you have to prep and, deliver car, process registration, activate BMW Assist and Sat radio. Now your job is finally done.. now if the clients wants a PC DELIVERY AND IS OUT OF STATE.. there are about 3 more critical steps.. now add another few more weeks to the process... so lets say the average time it takes to do a ED deal is 4 months. Now remember your CA/salesman made $100.... that was 4 months ago.. and he's still dealing with your ED deal. so that's $100 for the time he put in... wayyyyyyy below minimum wage.


Come on now Greg, I wasn't that bad...haha

I agree, timing has to be right for the CA to do that kind of pricing especially when it's out of state and their is no loyalty guarantee. When it's slow it makes more sense for a dealership to offer that kind of deal. It's a lot of work.


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## Ninong (May 20, 2014)

BigJay2050 said:


> Unless the dealer calls you back a month and a half later letting you know there was a problem with the lease and you need to sign a new one.


Haha! If BMWFS rejects it and returns it for correction, then there's a problem that has to be "resolved" with the customer. 

Failing that, the dealer can always carry the lease in-house, something he definitely doesn't want to do.


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## Ninong (May 20, 2014)

miamiboyca said:


> I agree, timing has to be right for the CA to do that kind of pricing especially when it's out of state and their is no loyalty guarantee. When it's slow it makes more sense for a dealership to offer that kind of deal. It's a lot of work.


Let me just throw in this comment just for the heck of it even though it will no doubt not go down well with most of you. I don't understand why any dealer would be willing to do a ED deal for $500 over invoice. The only thing they're doing is going for the count, not the profit on the deal. I'm surprised BMWNA hasn't shut that down by now. They can't control selling prices but they can control allocation. And yes, BMWNA does keep track of exactly what each dealer's average gross is per car as well as average F&I profit per car. Enough said.

Carry on and continue to get good deals on European Delivery cars. That's your job as a customer. It's not your job to wonder why some dealers do European Delivery deals for practically nothing at all. 

P.S. -- I forgot to add that my comment above only holds true if it's an all cash deal, which most of the more expensive BMWs used to be before BMW got into the business of selling cars through subvention of the lease terms. Now that most people lease their BMWs, there is the potential to maybe pick up a little bit of income in finance reserve. Or maybe the F&I manager will talk the customer into buying one of their offerings. So there's that potential for the dealership to pick up a little extra but in almost all cases the salesman (aka "client adviser") isn't paid on any of that. If the customer is local, there's the possibility of future income from his patronage of your service and parts departments, and maybe you have your own body shop. If the customer is from out-of-town that does not apply.


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## mclaren (Jan 5, 2005)

Dealers are having a tough time making money and I know my local dealer is trying to go with the .0004 markup on the mf. The GM told me "the retail profit is gone". The internet has allowed people to calculate the dealer invoice and quite a few people do and want $500 over. Often their calculated invoice is too low because of items like MACO and training so when the dealer says their cost is actually higher they don't believe them even if they show the customer the invoice.


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## Ninong (May 20, 2014)

mclaren said:


> Dealers are having a tough time making money and I know my local dealer is trying to go with the .0004 markup on the mf.


The lease money factor markup allowed by BMWFS is very low compared to the markups that were allowed at one time. And BMWFS has always had much lower markup allowances than other lenders (Chase, WF, BofA, etc.). And those other lenders also allowed higher markups to the lease acquisition fee, too.



> The GM told me "the retail profit is gone". The internet has allowed people to calculate the dealer invoice and quite a few people do and want $500 over. Often their calculated invoice is too low because of items like MACO and training so when the dealer says their cost is actually higher they don't believe them even if they show the customer the invoice.


There is no doubt a lot of truth to that statement. You can tell by some of the comments in online forums like this one that many people believe they have the exact dealer's invoice down to the penny because they got it from Edmunds. Then they don't believe the dealer even when he shows them his invoice because they don't know what a factory invoice looks like. Then assume the MACO and training fee is just something extra the dealer added. In some cases the customer even forgot to add the $995 destination and handling fee and think it's something the dealer made up.

I will say that I think the Florida dealers have gone overboard with what they charge for a "doc fee." That's absurd.

Before the Internet, dealers only had to compete with other BMW dealers within an hour's drive but now that there are Internet specialists offering very low gross deals to customers out of their local area things have changed. They may lose some of those deals if they aren't willing to come reasonably close in price. Reasonably close to me would mean within $1,000 of the out-of-town deal, assuming it's a car they have plenty of. If it's a car they have too many of, or if it's the end of the month, they might even match the out-of-town deal. If it's a European Delivery on a car that does not come out of their allocation, then that's a different sort of deal. Dealers vary on how they view those.


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## BigJay2050 (Jun 14, 2015)

Ninong said:


> The lease money factor markup allowed by BMWFS is very low compared to the markups that were allowed at one time. And BMWFS has always had much lower markup allowances than other lenders (Chase, WF, BofA, etc.). And those other lenders also allowed higher markups to the lease acquisition fee, too.
> 
> There is no doubt a lot of truth to that statement. You can tell by some of the comments in online forums like this one that many people believe they have the exact dealer's invoice down to the penny because they got it from Edmunds. Then they don't believe the dealer even when he shows them his invoice because they don't know what a factory invoice looks like. Then assume the MACO and training fee is just something extra the dealer added. In some cases the customer even forgot to add the $995 destination and handling fee and think it's something the dealer made up.
> 
> ...


I agree with you on the Internet. The last few cars I have purchased have all been purchased from more than a thousand miles away and transported back. Local dealers won't even try to match many of these deals because they feel they can get their MSRP or MSRP+ -- if not from you, then from the next guy -- and I guess they don't want to short change themselves on higher demand cars since they are allocated. And hey, if they can get it, more power to them. But I'd rather save $5k on a car and pay $1000 to ship it than just toss the money.

Of course, occasionally the local guys will tell you to show them a Buyers Order and they'll match it, but I don't like to play those games. If they couldn't give me the best deal the first time around, I have no interest in giving them my business.


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## Ninong (May 20, 2014)

You're the customer. Whatever feels right for you is right. Period. You're in charge. It's up to BMW of North America, BMW Financial Services and the BMW dealers to satisfy you. Anyway you decide to go is the right way. There is no wrong way. It's up to the manufacturer and the dealers to figure out how to get your business.

So there's nothing wrong with buying out of town if you like the price better, just as there's nothing wrong with buying locally even if the price is not as low as the out-of-town price.


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## gkr778 (Feb 8, 2013)

Ninong said:


> You're the customer. Whatever feels right for you is right. Period. You're in charge. It's up to BMW of North America, BMW Financial Services and the BMW dealers to satisfy you. Anyway you decide to go is the right way. There is no wrong way. It's up to the manufacturer and the dealers to figure out how to get your business.


:thumbup::thumbup:


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## tturedraider (Nov 11, 2005)

Just a little fyi tidbit some might find a little interesting - I have been using Edmund's since 1978 (I was about three years old ), when it was still a quarterly paperback. I bought my first new car in 1982, an '82 Olds Cutlass Supreme Brougham. When I ordered it I had prepared a typed up page that I formatted to look just like a GM window sticker, listing every option I wanted (almost all of them) with the option codes, the invoice prices, and the MSRP. My salesman was a family friend. I handed him the page with my offer amount typed at the bottom and, of course, he had to take it to his manager. He came back and said the manager had said there was no way they could sell for that price. I said OK, call me if he changes his mind. About two hours later they called and accepted my offer. To the best of my recollection it was about $300 over invoice and there was another $800 of holdback that GM would pay the dealer.


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## PAX5 (Jan 26, 2011)

[email protected] BMW said:


> Let me put this out there.. +1 t...traider said it well.....Personally I used to do $500 over invoice Ed deals years ago when I was trying to really get in the ED game. But for me and many other experienced CA's it has to make $ sense. Most people have no idea that on an ED transaction there is no $ kickback from BMW. So if a $500 deal is made ..THAT'S IT....... the salesman probably get a 20% COMMISSION... so $100. Now keep in mind he has to ORDER CAR, deal w/ changes in build... lock a date, shuffle times for clients flight etc., do a purchase order, run all the different lease/finance calculations, do the actual purchase contract... and all this before you have even left the US... next car gets transported back to US... so now you are fielding all sorts of questions like, where's my car?, why is it taking so long?. Finally the car gets back stateside... now you have to prep and, deliver car, process registration, activate BMW Assist and Sat radio. Now your job is finally done.. now if the clients wants a PC DELIVERY AND IS OUT OF STATE.. there are about 3 more critical steps.. now add another few more weeks to the process... so lets say the average time it takes to do a ED deal is 4 months. Now remember your CA/salesman made $100.... that was 4 months ago.. and he's still dealing with your ED deal. so that's $100 for the time he put in... wayyyyyyy below minimum wage.


Oh, stop whining. About two-thirds of what you describe above you don't do ... you delegate.

You sound like a real estate sales agent who always whine that 6% commission isn't enough for all they do. The reality is that cars, like houses, sell themselves, you just babysit the paperwork.

That's why you can get into these professions with only a highschool education.

Minimum wage or below is about the right compensation for this "profession".

IMO


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## GerWil (Dec 18, 2006)

GerWil said:


> .......I currently have an ED purchase order for a 2016 340i xDrive, priced at $750 over ED invoice; delivery August 24th. I had expected to sign the Lease Agreement a week before my departure and asked my CA to get a lease agreement printout for me to review. The agreement added a .0004 money factor markup to the .00111 rate (ED & MSD). In past leases I have been emphatic about specifying the rate parameters, but this time............


My Dealer has had second thoughts about adding the markup and the Lease Agreement that I sign next week will be at .0011.
I also want to comment on what Greg said about ED's being such a pain. I do not believe that I am unique, but when ready for an order I inform the CA over the phone or email that I am about to order again. I then send him a list of the packages and options, with the codes taken from the order guide, and how I expect it to be priced. I then receive the Vehicle Inqiiry Report for approval; receive the letter issued by the ED department with the delivery date; receive a copy of the purchase order, and that's it. I only go into the Dealer to pay (lease or buy). After the car is shipped I track it and only call the CA after the car has cleared customs to find out when I can expect the car to be at the dealer. That does not seem like too much work for the CA.
I see on Bimmerfest many who are confused by the ED process and often they are directed to a Board Sponsor. They are doing ED for the first time and are not familiar with the process, so it takes more work, If it so time consuming, then why not discourage the recommendations.


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## dkreidel (Aug 24, 2005)

PAX5 said:


> Oh, stop whining. About two-thirds of what you describe above you don't do ... you delegate.
> 
> You sound like a real estate sales agent who always whine that 6% commission isn't enough for all they do. The reality is that cars, like houses, sell themselves, you just babysit the paperwork.
> 
> ...


Not enough coffee this morning? Someone piss in your Wheaties? I often agree with what you post PAX5, but not this time. I've done 16 BMW ED's with 4 different CA's: one was clueless, one was okay, the other two were superb in dealing with the vagaries of ED. I know how hard these guys worked on my deals: M cars, Individual options before Individual was allowed in the US, special colors, out of state courtesy delivery, car on fire, car wrong color, etc.

You may be correct about some car salesman, but the ones I work with and the ones who populate this board are consummate professionals, well educated and bust their ass to keep ahead of folks like us  I don't know much about the background of our sponsors, but I recall the founder of this board earned (at least) a master's degree and it may have been a PhD

I've never offered $500 over ED invoice as I think it's too low; most of my ED deals have been between $1K and $2K over ED invoice.

dk


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## gkr778 (Feb 8, 2013)

dkreidel said:


> You may be correct about some car salesman, but the ones I work with and the ones who populate this board are consummate professionals, well educated and bust their ass to keep ahead of folks like us  I don't know much about the background of our sponsors, but I recall the founder of this board earned (at least) a master's degree and it may have been a PhD


Bimmerfest sponsor CAs and part/accessory specialists are in a different league - they are the best of the best and not necessarily representative of automotive retailing overall.

As a "profession", automotive retail sales positions have low barriers to entry just as PAX5 mentioned. At BMW of Silver Spring, the very highly rated dealership and Bimmerfest sponsor in the Washington, D.C. area where I purchased my F30 320i, the qualifications for a "Client Advisor" (aka new vehicle salesman) are:

• High school diploma or GED; associate's or bachelor's degree, preferred 
• Valid driver's license with less than 2 points
• Minimum 18 years of age
• Minimum 2 years of sales experience; consumer to consumer experience, preferred
• Strong negotiation, problem solving, and presentation skills
• Proven closing and follow-through skills
• Basic MS Office knowledge; internet proficiency, and basic arithmetic skills
• Ability to maintain proper dress code and professional appearance in accordance with dealership policies
• Experience in a commission or bonus-based environment, preferred

And Mile One Automotive, the parent company for this dealership, is among the most selective in the Mid Atlantic region when it comes to hiring automobile retail salespeople. Most others are less stringent.

FWIW, BMW of Silver Spring offered me $600 above ED invoice on my 320i on their first response to my purchase inquiry. I accepted it without any qualms. :thumbup:


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## tturedraider (Nov 11, 2005)

GerWil said:


> My Dealer has had second thoughts about adding the markup and the Lease Agreement that I sign next week will be at .0011.
> I also want to comment on what Greg said about ED's being such a pain. * I do not believe that I am unique*, but when ready for an order I inform the CA over the phone or email that I am about to order again. I then send him a list of the packages and options, with the codes taken from the order guide, and how I expect it to be priced. I then receive the Vehicle Inqiiry Report for approval; receive the letter issued by the ED department with the delivery date; receive a copy of the purchase order, and that's it. I only go into the Dealer to pay (lease or buy). After the car is shipped I track it and only call the CA after the car has cleared customs to find out when I can expect the car to be at the dealer. That does not seem like too much work for the CA.
> I see on Bimmerfest many who are confused by the ED process and often they are directed to a Board Sponsor. They are doing ED for the first time and are not familiar with the process, so it takes more work, If it so time consuming, then why not discourage the recommendations.


Good to hear about your good result. :thumbup:

The number of customers like you with whom CAs deal could fit on the head of a pin. Bimmerfest and other forum customers are the most informed customers with whom CAs deal and many of them have only a marginally good understanding of the process. The number of truly highly informed customers could fit in a thimble. Even in today's "information age" society with unprecedented levels of information available the average customer, even BMW customers, walks in with an ad in mind they saw somewhere wanting that deal, having never even looked at BMW's website, much less the Build Your Own page, and knowing virtually nothing about the various cars they're about to look at and consider spending $50k + on.


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## Alpine300ZHP (Jan 31, 2007)

BigJay2050 said:


> I agree with you on the Internet. The last few cars I have purchased have all been purchased from more than a thousand miles away and transported back. Local dealers won't even try to match many of these deals because they feel they can get their MSRP or MSRP+ -- if not from you, then from the next guy -- and I guess they don't want to short change themselves on higher demand cars since they are allocated. And hey, if they can get it, more power to them. But I'd rather save $5k on a car and pay $1000 to ship it than just toss the money.
> 
> Of course, occasionally the local guys will tell you to show them a Buyers Order and they'll match it, but I don't like to play those games. If they couldn't give me the best deal the first time around, I have no interest in giving them my business.


This is exactly how I feel and why I buy out of state. I refuse to engage in games where they will match the other guy if you can "prove" that your deal is legit. Screw that....


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## mwm1166 (Jul 16, 2013)

Ninong said:


> Let me just throw in this comment just for the heck of it even though it will no doubt not go down well with most of you. I don't understand why any dealer would be willing to do a ED deal for $500 over invoice. The only thing they're doing is going for the count, not the profit on the deal. I'm surprised BMWNA hasn't shut that down by now. They can't control selling prices but they can control allocation. And yes, BMWNA does keep track of exactly what each dealer's average gross is per car as well as average F&I profit per car. Enough said.
> 
> Carry on and continue to get good deals on European Delivery cars. That's your job as a customer. It's not your job to wonder why some dealers do European Delivery deals for practically nothing at all.
> 
> P.S. -- I forgot to add that my comment above only holds true if it's an all cash deal, which most of the more expensive BMWs used to be before BMW got into the business of selling cars through subvention of the lease terms. Now that most people lease their BMWs, there is the potential to maybe pick up a little bit of income in finance reserve. Or maybe the F&I manager will talk the customer into buying one of their offerings. So there's that potential for the dealership to pick up a little extra but in almost all cases the salesman (aka "client adviser") isn't paid on any of that. If the customer is local, there's the possibility of future income from his patronage of your service and parts departments, and maybe you have your own body shop. If the customer is from out-of-town that does not apply.


I think a lot of these deals came from and still come from people who are trying to carve out a niche when they may be fairly new or young CA's. If you need to drum up business in a turn over heavy industry, and you're trying to make it, using the internet and making great deals will get you known.


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## miamiboyca (Jun 19, 2012)

PAX5 said:


> Oh, stop whining. About two-thirds of what you describe above you don't do ... you delegate.
> 
> You sound like a real estate sales agent who always whine that 6% commission isn't enough for all they do. The reality is that cars, like houses, sell themselves, you just babysit the paperwork.
> 
> ...


Dude you're out of line. Greg did my ED and handled everything. He's top notch and offering information to help some people and provide insight.

As for the high school only education - you can also be a CEO (Microsoft,Wendy's, list goes on) but apparently a college education (based on your condescending tone I assume you have one) doesn't teach you how to act in public and apparently made you an elitist prick. IMO


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## innovativeit (Sep 30, 2007)

PAX5 said:


> Oh, stop whining. About two-thirds of what you describe above you don't do ... you delegate.


In the past 15 years, I have purchased/leased several BMWs at stores located in Michigan, Colorado, and Indiana. None of those stores were staffed to allow the CAs to delegate the tasks previously identified. In addition to doing those tasks personally, I have had CAs who assisted my elderly parents with programming their garage openers, setting up navigation prior to trips, etc. - months after the delivery of the vehicles. Perhaps, there are a few "super stores" that can support a delegation process but I'd bet that most stores are not set up that way.



PAX5 said:


> You sound like a real estate sales agent who always whine that 6% commission isn't enough for all they do. The reality is that cars, like houses, sell themselves, you just babysit the paperwork.
> 
> IMO


I think you are very fortunate to have owned houses that "sell themselves". My home selling experience has been that my agents have provided marketing/staging assistance, fielded all inquiries, spent time showing my houses to prospective buyers, assisting buyers in preparing offers and qualifying for mortgages, "babysitting the paperwork", and more. Just like my CAs, my real estate agents worked to earn their commissions.



PAX5 said:


> That's why you can get into these professions with only a highschool education.
> 
> Minimum wage or below is about the right compensation for this "profession".
> 
> IMO


I certainly agree with miamiboyca's response to your opinion on the entry level education requirement for a CA. You are minimizing the skill requirements, such as oral and written communications, that you also expect your CA to possess.

Surely, you don't really think that the minimum wage folks working at your favorite fast food restaurant are interchangeable with the CA assisting you with your BMW purchase(s)?


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## Justin T (Oct 10, 2006)

Plus, you cannot equate the commission a CA gets for moving a car to the commission a RE agent gets for selling a home (unless its a crack den I guess).

I think the "6% standard" is nuts...there is no way the work done justifies that kind of cash. I mean, I value the work the RE agent does but anything over 4% seems excessive. I understand that the buyer's agent gets their cut from this pool as well...


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## woron (Dec 13, 2011)

[email protected] BMW said:


> So if a $500 deal is made ..THAT'S IT....... the salesman probably get a 20% COMMISSION... so $100. Now keep in mind he has to ORDER CAR, deal w/ changes in build... lock a date, shuffle times for clients flight etc., do a purchase order, run all the different lease/finance calculations, do the actual purchase contract... and all this before you have even left the US... next car gets transported back to US... so now you are fielding all sorts of questions like, where's my car?, why is it taking so long?. Finally the car gets back stateside... now you have to prep and, deliver car, process registration, activate BMW Assist and Sat radio. Now remember your CA/salesman made $100.... that was 4 months ago.. and he's still dealing with your ED deal. so that's $100 for the time he put in... wayyyyyyy below minimum wage.


You send few emails, ask your financial manager to do paperwork and techs to prep car for delivery (they split other 80%). And if client choses PCD, you don't do half of the items on your list. And you get $100 per 2 hours of actual work? Yes, $50/hr is below minimum wage.


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## PAX5 (Jan 26, 2011)

woron said:


> You send few emails, ask your financial manager to do paperwork and techs to prep car for delivery (they split other 80%). And if client choses PCD, you don't do half of the items on your list. And you get $100 per 2 hours of actual work? Yes, $50/hr is below minimum wage.


... exactly!


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## PAX5 (Jan 26, 2011)

miamiboyca said:


> Dude you're out of line. Greg did my ED and handled everything. He's top notch and offering information to help some people and provide insight.


Good for you. I hope you compensated him well... Or did you???



> _... (based on your condescending tone I assume you have one) doesn't teach you how to act in public and apparently made you an elitist prick. _ IMO


Hmm ... my point is causing you to show your true colors.


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## justinnum1 (Nov 22, 2011)




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## Ninong (May 20, 2014)

woron said:


> You send few emails, ask your financial manager to do paperwork and techs to prep car for delivery (they split other 80%). And if client choses PCD, you don't do half of the items on your list. And you get $100 per 2 hours of actual work? Yes, $50/hr is below minimum wage.


The F&I manager doesn't get anything from the deal gross, only from F&I dept gross. BMW pays the dealership's service dept to PDI the car, so the technician who does that does not in any way benefit from "the other 80%." The sales manager & GSM (if there is one) get compensated in ways that are tied to total dept profit but it's a very small percentage of the gross on any individual deal.



PAX5 said:


> ... exactly!


No, not quite exactly.

Some of you guys are very harsh on the salespeople you probably do business with whenever you buy a car. I'm amazed you get along with one of them well enough to complete a deal.

And just for the record, *in my opinion*, anything less than $1,500 over dealer's ED invoice on any car is an extremely low gross deal. More power to you if that's what you're getting but it's still absurdly low. Carry on.


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## kjboyd (Apr 13, 2006)

Just my two cents: it's not we who've created the devil here.

My local dealer wouldn't take less than MSRP and wanted dealer mark up on an X1. As the old in living color skit says... "Homey don't play that." So I went elsewhere. 

I appreciated the good deal I got from a board sponsor. Plus my mom went to him as well. So that is two CSI bonus scores. Clearly he's doing ok for himself or he, and other sponsors, wouldn't be in this business. 

I'm sure they more than make up for it on the full MSRP deals that you know they do as well. An educated buyer and all...


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## miamiboyca (Jun 19, 2012)

PAX5 said:


> ... exactly!





PAX5 said:


> Good for you. I hope you compensated him well... Or did you???
> 
> Hmm ... my point is causing you to show your true colors.


Yes, I don't like elitists that sit behind a keyboard.

And what your advanced college education apparently didn't teach you is opportunity cost.

During busy time, $100 on a deal as Greg pointed out is peanuts - why?... because he could spend time on more lucrative deals. He's basically explained why sometimes he and other CA's do better XX over ED invoice deals than at other times and why now that he has made a name for himself he is less inclined to do so... Like any good sales person, he has to weigh more lucrative opportunities vs lower margin XXX over ED Invoice sales. Its also quite common that the customer who tries to squeeze pennies out of every part of a deal are usually the most time consuming of all...

As for my compensation to him is multi faceted. First is the deal (one that worked for both of us) Second - was a thank you gift I sent to him for my 100 questions through my ED process (and his very quick response) and third and most lucrative for any sales person is my referral, which comes from working with a knowledgeable and professional CA. I don't have a moments hesitation in referring someone to Greg (My closest friend already got a car from him last year)

Your comments are very short-sided. Like any profession, there good and bad - for you to lump them all into 1 category is well - ignorant, despite your claim to education.

OK, this game of wits has become unfair for you now I feel like am picking on someone with obvious limits. So UNSUBSCRIBE it is...


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## Ninong (May 20, 2014)

kjboyd said:


> Just my two cents: it's not we who've created the devil here.
> 
> My local dealer wouldn't take less than MSRP and wanted dealer mark up on an X1. As the old in living color skit says... "Homey don't play that." So I went elsewhere.
> 
> ...


Kevin,

That's your job as a customer to get the deal you think is best. Don't forget that a deal for a car out of stock and even an ordered car for regular dealership delivery is not at all the same as a European Delivery deal.

It's the low gross ED deals that make no sense if the dealer is actually selling them at only $500 or $750 over ED invoice. On the other hand, if you can get one at that price, more power to you.


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## Ninong (May 20, 2014)

If a dealership accepts some of those extremely low-gross European Delivery deals, it is with the expectation that the customer will possibly repeat with them on cars out of stock or even ordered cars for regular delivery. The customer might also send them some referral business. 

Once a client adviser gets so much business that he can't handle his own deliveries and other follow-up obligations, most dealerships require him to participate in the compensation of whatever assistance is necessary. Stuff like that varies from one store to another but I'm sure that woman at BMW of Beverly Hills has more than one assistant and she almost certainly contributes to their compensation.


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## PAX5 (Jan 26, 2011)

miamiboyca said:


> ... So UNSUBSCRIBE it is...


Goodbye!


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## woron (Dec 13, 2011)

Ninong said:


> The F&I manager doesn't get anything from the deal gross, only from F&I dept gross. BMW pays the dealership's service dept to PDI the car, so the technician who does that does not in any way benefit from "the other 80%."


Cool. So a lot of people actually involved in ED sale are getting paid from other sources.


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## Ninong (May 20, 2014)

woron said:


> Cool. So a lot of people actually involved in ED sale are getting paid from other sources.


The ones you mentioned certainly are. There are other ways for an auto dealership to generate income other than the direct front-end gross on the sale of a car. The F&I department's income is separate from the gross on the deal. The service and parts departments are separate from the sales department and capable of generating quite a bit of income on their own.


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## gekisai29 (Jan 13, 2007)

A fair deal is the price both sides happily agree to. the seller almost always won't sell if he can't make a reasonable profit which certainly is the way it should be. for my last car(Not my ED) my CA inquired as to whether i would let him make something "this time". I asked him "how much?"; he said $500 over; I said "fine". Not as much fun as haggling but the best way to do business & establish a long term relationship.


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## Lionnutz (Jul 24, 2014)

Ninong said:


> Once a client adviser gets so much business that he can't handle his own deliveries and other follow-up obligations, most dealerships require him to participate in the compensation of whatever assistance is necessary. Stuff like that varies from one store to another but I'm sure that woman at BMW of Beverly Hills has more than one assistant and she almost certainly contributes to their compensation.


She had 3 the last I heard


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## Blkthght (Dec 28, 2011)

PAX5 said:


> Oh, stop whining. About two-thirds of what you describe above you don't do ... you delegate.
> 
> You sound like a real estate sales agent who always whine that 6% commission isn't enough for all they do. The reality is that cars, like houses, sell themselves, you just babysit the paperwork.
> 
> ...


And you sound ignorant. So you don't like/respect auto dealers.....ok we get it. But you're over here generalizing and making reckless assumptions about people's education levels and career choices. And you specifically directed your insulting bulls%$t to someone you don't even know......and who, by the way, comes on this forum to provide valuable insight and info to people looking to acquire a new bmw....and not just from him. Wtf are you anyway? Who does that? Only an a**hole does that.


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## PAX5 (Jan 26, 2011)

Blkthght said:


> And you sound ignorant. So you don't like/respect auto dealers.....ok we get it. But you're over here generalizing and making reckless assumptions about people's education levels and career choices. And you specifically directed your insulting bulls%$t to someone you don't even know......and who, by the way, comes on this forum to provide valuable insight and info to people looking to acquire a new bmw....and not just from him. Wtf are you anyway? Who does that? Only an a**hole does that.


Cry me a river, pal ...


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## The BoatMan (Apr 2, 2002)

Am I mistaken but doesn't the MF markup go to the finance guy?

Is it not still considered invoice <1000 a mini deal?

I rather pay more over invoice and have it go to the CA than an inflated MF. When I was new to the game with ED, I paid an inflated MF for a resident board sponsors expertise. No complaints.

I've since learned and demand base MF. If not agreeable I move on and being in NJ there is always a dealer willing to agree.


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## Ninong (May 20, 2014)

The BoatMan said:


> Am I mistaken but doesn't the MF markup go to the finance guy?


If you're asking about commissions, then yes. The salesman (client adviser) is usually not paid a commission on the finance reserve. However, the general sales manager's compensation package should show no difference between where the profit comes from and he's the one who determines how he wants the operation to run. In some dealerships the sales managers are paid on both the front and the back of the deal and in others just the front (which is a mistake).

If you walk into a dealership (e.g., in some parts of Texas) and confront the salesperson about why he won't cut the money factor and he tells you they don't do that at his dealership, that's something coming from the general sales manager and/or the dealer principal. In some stores management refuses to negotiate the money factor markup. That only works if there are no other BMW stores nearby or if the others that are nearby employ a similar tactic.



> Is it not still considered invoice <1000 a mini deal?


What constitutes a "mini deal" is in the eye of the beholder. Seriously. Is it a car out of stock or an ordered car? Is it a European Delivery? If it's a European Delivery, is it an M car that comes out of allocation? If it does come out of allocation, is it an M4 or an M3? All of those examples deserve a different "mini deal" for obvious reasons. And we haven't even touched on whether you hit a dealer at the perfect time for you, meaning he's desperate for whatever reason. You couldn't care less what the reason is, you just want to catch one near the end of the month, or the end of the quarter, or the end of the year when he needs to move a few more deals out of stock. So a "mini deal" is a moveable target.



> I rather pay more over invoice and have it go to the CA than an inflated MF.


And I'm sure the GSM, who gets paid equally on both the front and the back, would rather see you pay more on the cap cost, too. Or selling price if it was a finance deal instead of a lease. After all, what goes into the cap cost is solid and can't be charged back if the lease, or loan, is terminated early. If the car is totaled a month from now they will be charged back virtually all of that finance reserve because it will be unearned. Or if you financed it with the dealership and then a few weeks later discover that your credit union is cheaper so you have your credit union refinance it and pay off the original loan. The finance reserve that had originally is now charged back because it is unearned. It's only fully earned if the lease or loan goes full term. If it's paid off sooner, or traded in sooner, then there's a chargeback of the unearned reserve to the dealer's reserve account.


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## Ninong (May 20, 2014)

Lionnutz said:


> She had 3 the last I heard


Based on the number of deals that I heard, she probably needs at least three: at least one person just to do deliveries, another one just to show cars and take customers on demo drives and a third person as an administrative assistant to handle follow-ups and phone traffic.

Dealing with a "client adviser" like that is like going to the doctor's office and waiting until your name is called and someone else takes your vitals and enters new information in their computer system, asking you where it hurts, etc., and then you wait some more until the actual doctor comes in and sees you for maybe 15 minutes, if you're lucky and he's not in a hurry.


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## tturedraider (Nov 11, 2005)

Ninong said:


> Based on the number of deals that I heard, she probably needs at least three: at least one person just to do deliveries, another one just to show cars and take customers on demo drives and a third person as an administrative assistant to handle follow-ups and phone traffic.
> 
> Dealing with a "client adviser" like that is like going to the doctor's office and waiting until your name is called and someone else takes your vitals and enters new information in their computer system, asking you where it hurts, etc., and then you wait some more until the actual doctor comes in and sees you for maybe 15 minutes, if you're lucky and he's not in a hurry.


I can't even comprehend what kind of personality she has that draws customers in. I've heard she's not a particularly warm and "engaging" person.


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