# Why is ED so much cheaper?



## jeffinohio (Oct 9, 2003)

Im planning a trip in April for ED and wanted to understand why the price of ED is so much cheaper compared to buying the car in the States from a BMW dealer? Is it because we physically have to go to Munich and get the car? Because the car is being paid for before coming to the States? or what is the main reason for the price difference Im not complaining but just curious cause its just to good to pass up for all potential BMW buyers.


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## postoak (Mar 5, 2002)

This question has been brought up a number of times and no one has answered definitively. But I think your statement that "it's just too good to pass up for all potential BMW buyers" isn't really correct because the program isn't right for everyone. Are you aware of the negatives?

1) The process, from start to finish, takes about 5 months

2) If you're doing a trade-in, you'll have to be without your old car for, probably, over two months

3) When leasing, you make 3 payments without having the use of your new car

4) You have to take the time to go to Germany to pick up the car

Anyway, if you learn the answer to your question then maybe we can move on to some questions I have like, why are airfares cheaper if you stay over the weekend at your destination?


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## Marco (Mar 7, 2003)

jeffinohio said:


> Im planning a trip in April for ED and wanted to understand why the price of ED is so much cheaper compared to buying the car in the States from a BMW dealer? Is it because we physically have to go to Munich and get the car? Because the car is being paid for before coming to the States? or what is the main reason for the price difference Im not complaining but just curious cause its just to good to pass up for all potential BMW buyers.


I have had the same question since I came across the program a year ago (I did use it last June) and found no good aswer. Here are some thoughts/partial answers I found or made up (none particularly convincing):

1. It is a program initiated when BMW was trying to break into the American market and needed to make a name for itself. It has remained active for no good reason.
2. Even now, ED is still a way to attract new customers who otherwise maybe would not buy a BMW. It is likely that they will buy another bimmer later on without using ED.
3. After all, it's not as if BMW is loosing money on it. It's just making less profit.
4. If there are limits (self-imposed or not) on the number of cars that BMW can import in the US, this may be a way around it. (I read this as an explanation to the ED program in this forum smetime ago. Are there limits?).
5. BMW receives some sort of subsidies from the German government For ED, since it supprts tourism.

Who knows :dunno:


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## Tanning machine (Feb 21, 2002)

It's been pretty definitively answered by Jon Shafer and others: BMWNA gets substantially cut out of the picture. When you buy in the US, BMW NA holds back some of the money, about 7%, which it then pays dealers each month based on their CSI scores. If they score well, they get most of that money. If not, they get less (or none). If you buy ED, BMW NA doesn't get that holdback money and the dealers don't get any of it at the end of the month. THat's why you don't get to rate the dealer after an ED purchase. In the end, BMW AG gets the same amount either way.
(and it has nothing to do with duty, because duty on imported cars is only 2.5%, which is less than $1000--clearly not enough to cover the savings, even if the value of the used car were zero, which it's not).

Now, the question as to "why" BMW has this is another matter. After talking to folks at the ED center (take it for what it's worth) it seems to be principally a customer loyalty program. First off, it's a reward to folks who are "serious" BMW afficianados. Second, they figure that after picking up a car and driving in Germany, you're more likely to buy another BMW.


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## bmw325 (Dec 19, 2001)

Tanning machine said:


> It's been pretty definitively answered by Jon Shafer and others: BMWNA gets substantially cut out of the picture. When you buy in the US, BMW NA holds back some of the money, about 7%, which it then pays dealers each month based on their CSI scores. If they score well, they get most of that money. If not, they get less (or none). If you buy ED, BMW NA doesn't get that holdback money and the dealers don't get any of it at the end of the month. THat's why you don't get to rate the dealer after an ED purchase. In the end, BMW AG gets the same amount either way.
> (and it has nothing to do with duty, because duty on imported cars is only 2.5%, which is less than $1000--clearly not enough to cover the savings, even if the value of the used car were zero, which it's not).
> 
> Now, the question as to "why" BMW has this is another matter. After talking to folks at the ED center (take it for what it's worth) it seems to be principally a customer loyalty program. First off, it's a reward to folks who are "serious" BMW afficianados. Second, they figure that after picking up a car and driving in Germany, you're more likely to buy another BMW.


Exactly. Everything I've heard points to the fact that it is a customer loyalty program-- that doesn't actually cost BMW too much to do (maybe even saves them a few bucks). Personally, I think it works. I picked up my 325i in Germany and went on the factory tour-- it gave me more of a "bond" w/ BMW-- and i am more likely to purchase another one because of it (assuming i can stomach the styling).


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## postoak (Mar 5, 2002)

> It's been pretty definitively answered by Jon Shafer and others: BMWNA gets substantially cut out of the picture. When you buy in the US, BMW NA holds back some of the money, about 7%, which it then pays dealers each month based on their CSI scores. If they score well, they get most of that money.


 - Tanning Machine

Wow, I missed that thread. So, on a $40,000 car the dealer can make an additional $2,800? :yikes: No wonder so many dealers don't want to bother with EDs!


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## Tanning machine (Feb 21, 2002)

postoak said:


> - Tanning Machine
> 
> Wow, I missed that thread. So, on a $40,000 car the dealer can make an additional $2,800? :yikes: No wonder so many dealers don't want to bother with EDs!


Yes, that's why some are reluctant. Of course, those are allocation cars and ED cars are not, so the same reasoning still applies--they should do ED because it's marginal money. (Also, I think Ted or Jon mentioned that usually the CSI money goes to the dealer, not the salesman, so the salesman should certainly not care. Of course, the dealer may not approve, but what work are they doing?

Add: check here and here. Jon's made the point elsewhere as well.


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## elver (Oct 26, 2003)

When BMWNA imports the car into the US, there are import taxes they have to pay. When you do ED:
1-Car is used
2-Car belongs to you, not BMWNA
3-BMWNA brings the car into the US, but you are the importer of record.
4-Import taxes are lower, BMWNA passes the savings to you with ED pricing.


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## BillKach (Sep 22, 2003)

elver said:


> When BMWNA imports the car into the US, there are import taxes they have to pay. When you do ED:
> 1-Car is used
> 2-Car belongs to you, not BMWNA
> 3-BMWNA brings the car into the US, but you are the importer of record.
> 4-Import taxes are lower, BMWNA passes the savings to you with ED pricing.


Yeah, from what I understand, this is what makes the deal work.


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## Tanning machine (Feb 21, 2002)

elver said:


> 4-Import taxes are lower, BMWNA passes the savings to you with ED pricing.


The import duty on cars is 2.5% of the value. That's less than $1000 on a fully equipped 3er.

The difference in value between a new and used 3er can't explain $3000 in savings. The difference in duty would be about $100 at best. See my post above for the real reason.


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## The Other Tom (Sep 28, 2002)

postoak said:


> - Tanning Machine
> 
> Wow, I missed that thread. So, on a $40,000 car the dealer can make an additional $2,800? :yikes: No wonder so many dealers don't want to bother with EDs!


Yep, and that's why dealers are so "pushy" to get all 5's on their surveys. Also, Tanning Machine is right about who gets the $$...for the most part it's not the salesman (sorry, client advisor). My CA told me he gets maybe $100-200 per month due to good scores.


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## Stevarino (May 14, 2002)

*$500.00 Bmw Rebate Received*



The Other Tom said:


> Yep, and that's why dealers are so "pushy" to get all 5's on their surveys. Also, Tanning Machine is right about who gets the $$...for the most part it's not the salesman (sorry, client advisor). My CA told me he gets maybe $100-200 per month due to good scores.


Another thing I don't understand about ED. Why is BMW North America sending me a check for $500.00 (BMW Club membership) if they are "cut out of the deal"?

The other question that always comes up is why does no other company offer a comparible program. Not Porsche, VW, MB, etc. They offer some program, but not as good as the BMW Program. (Volvo is the closest, I think, but a distant second.)


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## BillKach (Sep 22, 2003)

Stevarino said:


> The other question that always comes up is why does no other company offer a comparible program. Not Porsche, VW, MB, etc. They offer some program, but not as good as the BMW Program. (Volvo is the closest, I think, but a distant second.)


I heard the Volvo program gives a 10% discount...


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## LDV330i (May 24, 2003)

Stevarino said:


> The other question that always comes up is why does no other company offer a comparible program. Not Porsche, VW, MB, etc. They offer some program, but not as good as the BMW Program. (Volvo is the closest, I think, but a distant second.)


Saab gives you a 9% discount plus $1,000 cash travel allowance. 

VW and Audi do not offer European Delivery at any price, nor is the Mini offered for ED.


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## sigurros (May 23, 2003)

Tanning machine said:


> Second, they figure that after picking up a car and driving in Germany, you're more likely to buy another BMW.


So true, so true... I am already thinking about what my next ED going to be, and when, and I just came back less than 2 weeks ago..


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## bluer1 (May 30, 2002)

Stevarino said:


> Another thing I don't understand about ED. Why is BMW North America sending me a check for $500.00 (BMW Club membership) if they are "cut out of the deal"?
> 
> The other question that always comes up is why does no other company offer a comparible program. Not Porsche, VW, MB, etc. They offer some program, but not as good as the BMW Program. (Volvo is the closest, I think, but a distant second.)


They aren't - BMWCCA is.


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## Magna (Jan 4, 2002)

*maybe this has already been asked . . .*

i should do a search . . . anyway do we still get the BMW CCA discount on EDs???


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## The Other Tom (Sep 28, 2002)

Magna said:


> i should do a search . . . anyway do we still get the BMW CCA discount on EDs???


I thnk so, yes :thumbup:


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## MD2b (Dec 20, 2002)

postoak said:


> 1) The process, from start to finish, takes about 5 months


:wow: Find yourself a different dealer!!! My M3 took only 2 months and this is a M3 we're talking about, not your run of the mill 3er. My salesperson said that 2-3 months is the usual amount of time for most of BMW's selection.

BMW of Mississauga for all those who are interested.


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## MD2b (Dec 20, 2002)

Marco said:


> 4. If there are limits (self-imposed or not) on the number of cars that BMW can import in the US, this may be a way around it. (I read this as an explanation to the ED program in this forum smetime ago. Are there limits?).


My M3 did not come out of dealer allocation so I guess this bypasses a limit of sorts.


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## LDV330i (May 24, 2003)

MD2b said:


> :wow: Find yourself a different dealer!!! My M3 took only 2 months and this is a M3 we're talking about, not your run of the mill 3er. My salesperson said that 2-3 months is the usual amount of time for most of BMW's selection.
> 
> BMW of Mississauga for all those who are interested.


I believe the 5 months that POSTOAK was talking about was in regards to the ED process and not to a factory order/NA delivery. I started my ED process in June for Oct. pick up in Munich and I am still waiting for redelivery. So my process has been longer.


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## tashi (Oct 11, 2003)

MD2b said:


> :wow: Find yourself a different dealer!!! My M3 took only 2 months and this is a M3 we're talking about,* not your run of the mill 3er. * My salesperson said that 2-3 months is the usual amount of time for most of BMW's selection.
> 
> BMW of Mississauga for all those who are interested.


Excuse me... !!!

Earth to MD2b...

We are proud of our _ run of the mill 3ers..._

BTW, BMWNA (and not BMW Canada) quotes the whole process as 4-6 months.

Is the European Delivery program offered to people north of the line?


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## MD2b (Dec 20, 2002)

tashi said:


> We are proud of our _ run of the mill 3ers..._


Sorry if you took offense. There is nothing wrong with a regular 3er, however, my point is this: go to your dealer tomorrow and look on the lot for a M3. Then count how many regular 3ers you see. Next, ask your dealer how long of a wait there is to obtain a M3 versus a customized normal 3er.

I too am proud of my 3er although it came with nifty gills which are a pain when waxing.



> Is the European Delivery program offered to people north of the line?


Yup, I did ED this summer; I saved roughly $1000 on the M3. Factor in the flight, lodging, food etc and there goes the $1000. However, the experience is well worth it.


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## LDV330i (May 24, 2003)

tashi said:


> Is the European Delivery program offered to people north of the line?


ED program in Canada is different from the USA plan. It is not a turnkey plan where you pay one price takes care of everything. I think up north you have to pay separately for your european insurance, etc. That is why BMWCanada offers ED M3's at a discount while in the USA you get no discount.


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## MD2b (Dec 20, 2002)

LDV330i said:


> ED program in Canada is different from the USA plan. It is not a turnkey plan where you pay one price takes care of everything. I think up north you have to pay separately for your european insurance, etc. That is why BMWCanada offers ED M3's at a discount while in the USA you get no discount.


Something along those lines. Originally, i was told that I was going to save $6k on the M3 -- take 2 at that price! -- but after all was done and said (license, insurance, duty, etc), the car was only about $1k cheaper...which I probably could have gotten via normal delivery. Would I do it again? YES!


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