# Why is ED less money?



## Jason B (Apr 13, 2002)

What is the reasoning in reducing the invoice price?


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## Guest (Nov 7, 2002)

It's two-fold-

1- BMW views it as smart to encourage people to bond with the marque by going to Germany and picking it up at the factory, giving you the opportunity to drive it on the autobahns, etc. Consider it money spent buildingbrand loyalty.

2- It is then imported into the U.S. as a USED CAR and pays a lower import duty. This is probably the MAJOR reason.


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## Jon Shafer (Dec 15, 2001)

TD said:


> *It's two-fold-
> 
> 1- BMW views it as smart to encourage people to bond with the marque by going to Germany and picking it up at the factory, giving you the opportunity to drive it on the autobahns, etc. Consider it money spent buildingbrand loyalty.
> 
> 2- It is then imported into the U.S. as a USED CAR and pays a lower import duty. This is probably the MAJOR reason. *


They also don't have to pay their dealers the "back-end"$$
on EDs...


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## beewang (Dec 18, 2001)

Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"

Cheers,:bigpimp: 

beewang


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## Plaz (Dec 19, 2001)

beewang said:


> *Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"
> 
> Cheers,:bigpimp:
> 
> beewang *


I do... there's no such thing as a free lunch.

Then again, that free lunch may be made up of gift horse mouth meat.


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## Jason B (Apr 13, 2002)

beewang said:


> *Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"
> 
> Cheers,:bigpimp:
> 
> beewang *


I was just curious as to the logistics of the operation.


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## riffic (Oct 31, 2002)

*2- It is then imported into the U.S. as a USED CAR and pays a lower import duty. This is probably the MAJOR reason. *

I bet this isn't enough to cause GM to start a Mexican Delivery Program


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## Nat Brown (Dec 29, 2001)

beewang said:


> *Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"
> 
> Cheers,:bigpimp:
> 
> beewang *


Because if you know why, you can squeeze the system even more. You should like that. 

See my article on how to save money on Euro Delivery. Or just go with Jon Shafer if you're in California to make life easier.

--gary


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## berford (Sep 10, 2002)

Jon Shafer said:


> *
> 
> They also don't have to pay their dealers the "back-end"$$
> on EDs... *


Strange, I thought it had more (or entirely) to do with the VAT (value added tax). That is, tourists don't have to pay it, locals do. In my recollection, 7% is exactly what you get back upon leaving the country on big ticket purchases--which is identical to the ED discount on the base price. Hence, I thought that was why you get the "discount" and why it's 7%. Not true?


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## bluer1 (May 30, 2002)

riffic said:


> *2- It is then imported into the U.S. as a USED CAR and pays a lower import duty. This is probably the MAJOR reason.
> 
> I bet this isn't enough to cause GM to start a Mexican Delivery Program *


:lmao: :lmao: :lmao: 
Funniest thing I've heard today.


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## ZBB 325Ci (Dec 19, 2001)

berford said:


> *
> 
> Strange, I thought it had more (or entirely) to do with the VAT (value added tax). That is, tourists don't have to pay it, locals do. In my recollection, 7% is exactly what you get back upon leaving the country on big ticket purchases--which is identical to the ED discount on the base price. Hence, I thought that was why you get the "discount" and why it's 7%. Not true? *


No... has nothing to do with VAT... EU exports are VAT exempt, which is why the tourist programs exist in the first place. Also, VAT throughout most of Europe is in the 14-17% range (don't remember Germany's exactly...).

As for why ED is less expensive -- I thought BMW received a tax credit from Germany on ED sales, as part of a program to promote tourism. Since you have to physically be present in Germany to pick up the car, the idea is that you go to Germany and spend your tourist $ and help out the German economy.

I did ED last year and will definately try to plan another one when its time!


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## Nat Brown (Dec 29, 2001)

ZBB 325Ci said:


> *
> 
> No... has nothing to do with VAT... EU exports are VAT exempt, which is why the tourist programs exist in the first place. Also, VAT throughout most of Europe is in the 14-17% range (don't remember Germany's exactly...). /B]*


*

Plus tourists DO pay VAT tax, such as when you buy BMW parts at the German dealerships. It's still WAY cheaper than buying the same parts in the US (go figure).

--gary*


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## ZBB 325Ci (Dec 19, 2001)

Nat Brown said:


> *
> 
> Plus tourists DO pay VAT tax, such as when you buy BMW parts at the German dealerships. It's still WAY cheaper than buying the same parts in the US (go figure).
> 
> --gary *


There are VAT rebates available, but you must make the purchase through a store that participates, and those stores usually cater to tourists (but many large department stores also participate). Unfortunately, BMW dealerships in Germany don't really cater their parts sales to tourists :bigpimp:

I've spent nearly 2 years in Europe on various trips and only once bothered to get the VAT rebate on one purchase... The process is a nightmare -- there are fees involved (usually 10% of the rebate up to a certain point) and you have to your receipt stamped both by the store where you bought the item and by customs when you leave the country (on a flight out of the EU).


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## berford (Sep 10, 2002)

ZBB 325Ci said:


> *
> 
> There are VAT rebates available, but you must make the purchase through a store that participates, and those stores usually cater to tourists (but many large department stores also participate). Unfortunately, BMW dealerships in Germany don't really cater their parts sales to tourists :bigpimp:
> 
> I've spent nearly 2 years in Europe on various trips and only once bothered to get the VAT rebate on one purchase... The process is a nightmare -- there are fees involved (usually 10% of the rebate up to a certain point) and you have to your receipt stamped both by the store where you bought the item and by customs when you leave the country (on a flight out of the EU). *


The process has been simplified recently. They now have a verification checkpoint (where you show an official the items eligible for VAT refund and the appropriate receipts, and get the refund form stampted) and a refund kiosk (where another official gives you an immediate cash refund--in your currency of choice.) It's important, though, that you keep the goods with you so you can show them to the first official--otherwise they won't process the paper. I made the mistake last time of packing some stuff in my luggage and checking it for the flight before going to the refund area. I only had about 75% of the eligible value in my carry-on luggage.


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## fastcat (Aug 25, 2002)

Plaz said:


> *
> 
> I do... there's no such thing as a free lunch.
> 
> Then again, that free lunch may be made up of gift horse mouth meat.  *


:lmao: :lmao: In Germany, a lot of the meats and sausages you buy is horse meat.


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## seivwrig (Apr 20, 2002)

berford said:


> *
> 
> Strange, I thought it had more (or entirely) to do with the VAT (value added tax). That is, tourists don't have to pay it, locals do. In my recollection, 7% is exactly what you get back upon leaving the country on big ticket purchases--which is identical to the ED discount on the base price. Hence, I thought that was why you get the "discount" and why it's 7%. Not true? *


The VAT is a whopping 16%. The only way to beat this is if you have any relatives in the military in Germany with the VAT forms. I did this. Also, when buying accessories and parts, buy from Niederlassung Munchen. They are cheap than the ED center. The ED center is cool, but save your money. The BMW center is pretty close.


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## berford (Sep 10, 2002)

seivwrig said:


> *
> 
> The VAT is a whopping 16%. The only way to beat this is if you have any relatives in the military in Germany with the VAT forms. I did this. Also, when buying accessories and parts, buy from Niederlassung Munchen. They are cheap than the ED center. The ED center is cool, but save your money. The BMW center is pretty close. *


Thanks, but I've already been corrected on that point. When I wrote the earlier post, I was looking at an original of a "Global Refund Cheque" issued to me (that I wasn't able to obtain the refund for, since I didn't have the items with me when I went through the airport). The quoted refund amount is 5 Euros on a purchase of 74.5 Euros--that's 6.7%, which I rounded to 7% in my post. Go figure.:dunno:


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## Tanning machine (Feb 21, 2002)

*It's not the duty . . .*



> They also don't have to pay their dealers the "back-end"$$


This is the key, not the duty. :thumbup: Dealers get paid after the sale by BMW NA based on the customer satisfaction rating. With ED, BMW NA is cut out of the picture, so the dealer doesn't get that incentive money and BMW AG doesn't have to add that into the price. (This also means some dealers may be less interested in doing ED because they don't get the bonus, even though the car doesn't come out of their allocation).

Duty is not the explanation. .:thumbdwn: Duty on cars is something like 2.5%. The rate is the same regardless of whether the car is new or used. All that matters is the value. Sure, a used car is less valuable, but not enough less valuable to matter. Think about it, if duty is 2.5%, then the value of the car would have to decline $3000/.025, or $120k to explain the full difference. Even if duty were 10%, the decline would have to be $30k to change the price as much as the difference in price.

I don't know about German tourist incentives, :dunno: but I do know it's not the duty.


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## Skybum (Sep 6, 2002)

I dont think BMW NA is cut out of the deal.


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## schley (May 26, 2005)

beewang said:


> Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"
> 
> Cheers,:bigpimp:
> 
> beewang


 Bee is this still true? Looking through some archives and got a laugh) 3 years old almost


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## adrian's bmw (Feb 14, 2003)

beewang said:


> Maybe its just me... but I'd never ask "why" I am being charged less then I have to pay Call me an a$$ but I could give a %#@*  Same as when someone says "Free Food!!" I never hesitate and ask "WHY!!??"
> 
> Cheers,:bigpimp:
> 
> beewang


 :bustingup I'm with you, brother. And free food is my favorite food.


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## damills (Nov 6, 2002)

adrian's bmw said:


> :bustingup I'm with you, brother. And free food is my favorite food.


Whats an example of how much you would save on a maxed out M3 Coupe, say its $62k car doing ed not counting flying and other money spent on the trip?


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## beewang (Dec 18, 2001)

damills said:


> Whats an example of how much you would save on a maxed out M3 Coupe, say its $62k car doing ed not counting flying and other money spent on the trip?


Z-E-R-O !!!


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## damills (Nov 6, 2002)

No difference in MSRP at all  Why do some say it saves money, not counting the trip cost. Im talking about if you were wanting to take a vacation in Europe?


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## turpiwa (Jun 13, 2005)

M3's are not eligible for savings in the ED programme.


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## turpiwa (Jun 13, 2005)

Unless you can negotiate due to the car not affecting the allotment fo the dealership?

What do you think?


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## damills (Nov 6, 2002)

turpiwa said:


> Unless you can negotiate due to the car not affecting the allotment fo the dealership?
> 
> What do you think?


:dunno: I remember a post couple of years back where a guy claimed it saved him enough to pay for the entire cost of the trip (eating, hotel, etc). I was just always curious, thought I would just ask.


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## beewang (Dec 18, 2001)

damills said:


> No difference in MSRP at all  Why do some say it saves money, not counting the trip cost. Im talking about if you were wanting to take a vacation in Europe?


Last time M cars were on ED list was MY 2000 (E36 M3) some may argue that US model E36 M3 is really NOT an M car and thus it was available on the ED program... but in anyevent that was the last time an M car was on the ED list.

hope this helps,

beewang


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## damills (Nov 6, 2002)

beewang said:


> Last time M cars were on ED list was MY 2000 (E36 M3) some may argue that US model E36 M3 is really NOT an M car and thus it was available on the ED program... but in anyevent that was the last time an M car was on the ED list.
> 
> hope this helps,
> 
> beewang


Ok, what about a maxed out 540? Im just curious if there is any cost savings not just the M, is here any model where you do save?


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## beewang (Dec 18, 2001)

Okay... not to point out the obvious  ....

http://www.bmwusa.com/bmwexperience/europeandelivery/savings

Also, 540 hasn't been sold for the past 3 yrs (last MY was 2003) :eeps:

Sooooooooo.... you say you are from Tenneseee Aye!!??


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## JSpira (Oct 21, 2002)

Nat Brown said:


> See my article on how to save money on Euro Delivery. Or just go with Jon Shafer if you're in California to make life easier.
> 
> --gary


Your article links to a netsol page


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## JSpira (Oct 21, 2002)

Nat Brown said:


> Plus tourists DO pay VAT tax, such as when you buy BMW parts at the German dealerships. It's still WAY cheaper than buying the same parts in the US (go figure).
> 
> --gary


Well, not really. You pay VAT (or really Mehrwertsteuer in this case) and then you get the MWSt. back when you leave with the goods.

I've found that most parts are more expensive in the BRD than in the USA due to exchange rates, even with MWSt. refund.


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## JSpira (Oct 21, 2002)

ZBB 325Ci said:


> Unfortunately, BMW dealerships in Germany don't really cater their parts sales to tourists :bigpimp:


Not necessarily 100% true - I've gotten MWSt. refunds from dealer purchases.



ZBB 325Ci said:


> The process is a nightmare -- there are fees involved (usually 10% of the rebate up to a certain point) and you have to your receipt stamped both by the store where you bought the item and by customs when you leave the country (on a flight out of the EU).


You've got to be kidding. This is one of the easiest things to do and every time I leave the EU I get a few hundred EUR back. The entire process takes minutes.


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## JSpira (Oct 21, 2002)

berford said:


> It's important, though, that you keep the goods with you so you can show them to the first official--otherwise they won't process the paper.


I've had to show one item out of 10 trips in past 2 years. You just have to answer "ja" when asked if you have the Goods, and if you don't look like someone who would be profiled in security, they stamp your form so they can go back behind the partition and finish their Bier.


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## MarcusSDCA (Jan 14, 2004)

Do you get the VAT back on everything?? Even your Grey Poupon??


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## cwsqbm (Aug 4, 2004)

beewang said:


> Last time M cars were on ED list was MY 2000 (E36 M3) ...


I read somewhere that the German government gave a tax incentive up to year 2000 to encourage ED. Afterwards, it comes from BMW's good graces (and probably advertising budget). That's why MB and Porsche don't give ED discounts anymore. They don't need any additional advertising to sell M models, so no discount.


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## berford (Sep 10, 2002)

Jspira said:


> I've had to show one item out of 10 trips in past 2 years. You just have to answer "ja" when asked if you have the Goods, and if you don't look like someone who would be profiled in security, they stamp your form so they can go back behind the partition and finish their Bier.


I assure you that was not true in my case. They insisted on seeing everything that I was claiming a VAT refund on and refused to consider the receipts for anything I couldn't produce. That was in Switzerland (Geneva)--perhaps it varies by point-of-departure.


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## JSpira (Oct 21, 2002)

berford said:


> I assure you that was not true in my case. They insisted on seeing everything that I was claiming a VAT refund on and refused to consider the receipts for anything I couldn't produce. That was in Switzerland (Geneva)--perhaps it varies by point-of-departure.


My comments were meant to be limited to the European Union.


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## berford (Sep 10, 2002)

MARCUS330i said:


> Do you get the VAT back on everything?? Even your Grey Poupon??


No. This will help you do the research: http://www.thevatclearinghouse.com/VATRefunds.htm


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