# Rates: Why So Secretive?



## lsleelee (Jan 5, 2007)

Why do we, for the most part, have to request a specific quote to get lease or finance rates?

I recently posted to ask, "are the lease rates for xyz available yet." I thought the, "and if so, can you post them for everyone's benefit?" was implied, but I got simply a "yes."

Then you've got the RideWithG site posting incomplete lists which appear to be illicit leaks.

Then you've got internet sales guys at the dealerships spending all day generating quotes for window shoppers and early researchers.

Perhaps the worst example is car_man at the Edmunds Townhall forum. He'll give you any rates you want. He'll give someone XYZ specific model, then someone else ABC specific model, then a third person XYZ again but at 12k instead of 15k, and on and on. That's his life.

So the rates aren't confidential: they get out. But in the least convenient way possible. Wouldn't it be to everyone's benefit, especially poor car_man's, to just post a friggin' list like Jon sometimes does (and not every brand has "their Jon," I've looked)? Hell, BMW should do it themselves.


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## dkreidel (Aug 24, 2005)

Simple: it's not in the dealer's best interest** to do so and the (independent) dealer's are BMW NA's customers - not us.

** it actually might be but many, if not most, dealers are anchored in the past.


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## 3ismagic# (Mar 17, 2011)

dkreidel said:


> Simple: it's not in the dealer's best interest** to do so and the (independent) dealer's are BMW NA's customers - not us.
> 
> ** it actually might be but many, if not most, dealers are anchored in the past.


Exactly. those knowledgable enough to understand the moving parts of a lease will find out what the rates are. Those not, will not. My guess is that the neophytes far outnumber the lease wizards. Thus it continues to be in dealers interests to obfuscate the rates.


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## mclaren (Jan 5, 2005)

As others have said the dealers and BMWFS do not want the lease rates posted. Also, someone would have to do it and that requires some effort. There is no incentive.


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## Elias (Jun 26, 2005)

Some dealers like to jack the rates up to the max and would rather not disclose that tidbit of information if you don't ask them to.


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## neurom (Jan 16, 2005)

The rates are kept secret for no other purposes to deceive those who are leasing. It is difficult to lease outside as compared to a loan, so they publish the APR's but not the rates. It is an insult to customers in my opinion and one of the main reasons I am not leasing my upcoming vehicle. They should be disclosed, heck, they should be forced to do so by consumer advocacy organizations.


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## lsleelee (Jan 5, 2007)

dkreidel said:


> ** it actually might be but many, if not most, dealers are anchored in the past.


Of course they are. They don't exist in the future.

Seriously: how long before BMW realizes what's what, shuts down these con artists, opens company-owned showrooms / repair centers (they pay for the repairs already anyway) where nobody is paid on commission, adjusts US prices to the kickback-free ED levels, and adds an "add to cart" button to the online configurator?


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## Red Lined (Jan 3, 2012)

^^^^^

I stand a better chance of getting a 290+ on USMLE Step 1 while snagging a date with Kate Upton and winning the lottery.


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## Jon Shafer (Dec 15, 2001)

I used to do it regularly back in the day. Nowadays, my relationship with BMW is too important, but I try to get away with as much as possible without getting myself in trouble.

:nono:

It has the most to do with dealers complaining that doing so deprives them of the opportunity to earn a reasonable profit.

I know everyone here wants a deal at the buy rate. Doing so does not generate enough revenue to keep dealers healthy.

Seriously...

I will make a new residual list next month when the latest are published.


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## dkreidel (Aug 24, 2005)

lsleelee said:


> Of course they are. They don't exist in the future.
> 
> Seriously: how long before BMW realizes what's what, shuts down these con artists, opens company-owned showrooms / repair centers (they pay for the repairs already anyway) where nobody is paid on commission, adjusts US prices to the kickback-free ED levels, and adds an "add to cart" button to the online configurator?


State franchise laws, primarily enacted to protect the car dealers, prohibit this in most States. It will eventually change, but probably not in my life time.


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

I concur with Jon.....The car industry is one of the few business that consumers do not feel the dealer is entitled to make a profit.....to much info takes away any control dealers have to make a decent profit. I have to say that being a fester gets you the majority of info you need to make a fair deal on a BMW.


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## neilsarkar (Jan 21, 2012)

dkreidel said:


> State franchise laws, primarily enacted to protect the car dealers, prohibit this in most States. It will eventually change, but probably not in my life time.


The ice-caps are melting. Look at Tesla's franchise free business model.

If they can disrupt the industry, others will follow. The question is, who has more lobbying power - the dealers or the automakers?


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## neilsarkar (Jan 21, 2012)

Jon Shafer said:


> I used to do it regularly back in the day. Nowadays, my relationship with BMW is too important, but I try to get away with as much as possible without getting myself in trouble.
> 
> :nono:
> 
> ...


Jon,

I read in an old TTAC article that dealerships make most of their money in used/parts/service departments. The new car sales department is basically loss leader to keep feeding the other three alive. Is there any substance in this factoid?


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## mr29 (Sep 2, 2012)

[email protected] BMW said:


> I concur with Jon.....The car industry is one of the few business that consumers do not feel the dealer is entitled to make a profit.....to much info takes away any control dealers have to make a decent profit. I have to say that being a fester gets you the majority of info you need to make a fair deal on a BMW.


i agree best forum I've seen for info anywhere


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## mr29 (Sep 2, 2012)

Jon Shafer said:


> I used to do it regularly back in the day. Nowadays, my relationship with BMW is too important, but I try to get away with as much as possible without getting myself in trouble.
> 
> :nono:
> 
> ...


honest answer here. good to see this


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## Jon Shafer (Dec 15, 2001)

neilsarkar said:


> Jon,
> 
> I read in an old TTAC article that dealerships make most of their money in used/parts/service departments. The new car sales department is basically loss leader to keep feeding the other three alive. Is there any substance in this factoid?


Not true at all. If dealers aren't firing on all cylinders (Parts/Service/New and Pre-Owned Sales) they are hurting. Sales includes F&I income. When you look at modern dealerships and the pressure that manufacturers put on them to upgrade facilities constantly, and factor in dwindling margins that used to be in the high teens not long ago, and add in the crazy rent factors most dealers pay, a statement like that is completely unfounded. Just compare the average BMW Center of today versus 15 years ago. Dealers are _spending_ through the ying-yang, and it is only going to get worse. With the impeding launches of i3 and i8 and the requirements being laid out, the poop is going to hit the fan. And just look at the enormous fleets of service loaner cars we have nowadays. The old family-owned dealers need to kick butt or they will have to sell to the corporations taking over the industry, the Penskes, the Auto Nations, etc., and you can bet they make money on sales..


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## 3ismagic# (Mar 17, 2011)

[email protected] BMW said:


> I concur with Jon.....The car industry is one of the few business that consumers do not feel the dealer is entitled to make a profit.....to much info takes away any control dealers have to make a decent profit. I have to say that being a fester gets you the majority of info you need to make a fair deal on a BMW.


I love you greg but I'm going to have to disagree.

I don't know anyone who thinks dealers shouldn't make a profit. The industry itself created the pricing model where the price isn't the price (i.e. where negotiation takes place on price). For decades they made a ton of money because of severe informational asymmetry between buyer and seller. Now that asymmetry has been seriously eroded to the benefit to buyers and at the expense of sellers. Dealers are responding with a whole host of mechanisms to protect themselves (outrageous Doc fees, marking up acquisition fees and money factor, kickbacks from lenders to push certain loan products, the infamous "financing guy sales pitch") getting through the back door what they can no longer get through the front door through honest negotiation in a free market.

The question then becomes what is a reasonable profit for a car? There is no single correct answer to this (buyers and sellers will disagree as it's a zero-sum game). However, an open and free market will dictate what a fair profit is by setting the price at which the average buyer and seller agree should be the profit and this will drive everyone's behavior.

I can't think of any another industry whose profitability is so inherently tied to informational asymmetry (i.e. it's ability to hide information from consumers) rather than real value-added.

What hiding lease rates does do is (rightly or wrongly) reinforce the consumer's view of dealers as dishonest brokers who will take advantage of people by deliberately hiding information and marking up the price in hidden ways that consumers can't detect.

Having said that. Greg is a straight shooter. I bought my car from him and couldn't have happier with the transaction.:thumbup:


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## mr29 (Sep 2, 2012)

3ismagic# said:


> I love you greg but I'm going to have to disagree.
> 
> I don't know anyone who thinks dealers shouldn't make a profit. The industry itself created the pricing model where the price isn't the price (i.e. where negotiation takes place on price). For decades they made a ton of money because of severe informational asymmetry between buyer and seller. Now that asymmetry has been seriously eroded to the benefit to buyers and at the expense of sellers. Dealers are responding with a whole host of mechanisms to protect themselves (outrageous Doc fees, marking up acquisition fees and money factor, kickbacks from lenders to push certain loan products, the infamous "financing guy sales pitch") getting through the back door what they can no longer get through the front door through honest negotiation in a free market.
> 
> ...


good points


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## OBS3SSION (Oct 1, 2002)

neilsarkar said:


> The ice-caps are melting. Look at Tesla's franchise free business model.
> 
> If they can disrupt the industry, others will follow. The question is, who has more lobbying power - the dealers or the automakers?


Yeah, but Tesla is having a hard time of it. I'm not sure what the status is now, but Tesla could not sell cars out of their Natick Massachusetts store because they could not get a dealership license in the state. The reason: They could not be a dealer because the service center was not attached to the showroom, but in a different location.

I'm not sure if the pressure to squash Tesla's factory store model came from other automakers or the dealership lobbyists...


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## neurom (Jan 16, 2005)

3ismagic# said:


> I love you greg but I'm going to have to disagree.
> 
> I don't know anyone who thinks dealers shouldn't make a profit.... Dealers are responding with a whole host of mechanisms to protect themselves (outrageous Doc fees, marking up acquisition fees and money factor, kickbacks from lenders to push certain loan products, the infamous "financing guy sales pitch") getting through the back door what they can no longer get through the front door through honest negotiation in a free market.
> 
> What hiding lease rates does do is (rightly or wrongly) reinforce the consumer's view of dealers as dishonest brokers who will take advantage of people by deliberately hiding information and marking up the price in hidden ways that consumers can't detect.


You hit the nail in the head, 3is. The best deals are those in which both parties feel they had a fair outcome and the relationship is preserved or bolstered. The free market decides what is a fair profit. I think dealers are absolutely entitled to a profit, that is not the issue. But the tactics of deceit implicit in the practice of hiding lease rates only puts dealers at odds with the buyers, who see them as untrustworthy. I personally do my part and do not go offering 3 cents over invoice to dealers because I think that is insulting and does not help foster a relationship I want to have with them for the future, so the dealers should be honest, publish the rate, if you are going to upcharge say so and explain why. Most in here would understand a reasonable upcharge from the buy rate, but they should publish them. Given all the finance options out there with low APR rates below 2.5% (as low as 1.74% in some cases), plus the acq fees, termination fees, wear and tear, I refuse partly on principle to give the dealer a lease deal to perhaps save a few pennies depending on who does the lease vs buy math. So if the dealers want to change their reputation as dishonest and deceitful, be transparent and let the free market decide what is fair, publish the damn lease rates.


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## hispeed4fun (Mar 1, 2013)

3ismagic# said:


> I love you greg but I'm going to have to disagree.
> 
> I don't know anyone who thinks dealers shouldn't make a profit. The industry itself created the pricing model where the price isn't the price (i.e. where negotiation takes place on price). For decades they made a ton of money because of severe informational asymmetry between buyer and seller. Now that asymmetry has been seriously eroded to the benefit to buyers and at the expense of sellers. Dealers are responding with a whole host of mechanisms to protect themselves (outrageous Doc fees, marking up acquisition fees and money factor, kickbacks from lenders to push certain loan products, the infamous "financing guy sales pitch") getting through the back door what they can no longer get through the front door through honest negotiation in a free market.
> 
> ...


This is exactly what i was thinking going through negotiations last week. I have been in sales for 15 years and could not think of any other business or product that is so secretive. Then you throw in the sleazy sales guys (not all of them) and it takes some of the fun out of getting a car. At the same time the people on here are able to get good deals because there are suckers out there that dont know any better. Im sure there are alot more people walking into dealerships buying/leasing cars close to msrp or jacked up rates than guys on this forum that know the real numbers. Either way with all the info we do have we still end up buying cars above invoice before incentives so the dealer always makes money just not as much as they wanted to that day.


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## Jon Shafer (Dec 15, 2001)

hispeed4fun said:


> This is exactly what i was thinking going through negotiations last week. I have been in sales for 15 years and could not think of any other business or product that is so secretive. Then you throw in the sleazy sales guys (not all of them) and it takes some of the fun out of getting a car. At the same time the people on here are able to get good deals because there are suckers out there that dont know any better. Im sure there are alot more people walking into dealerships buying/leasing cars close to msrp or jacked up rates than guys on this forum that know the real numbers. Either way with all the info we do have we still end up buying cars above invoice before incentives so the dealer always makes money just not as much as they wanted to that day.


Honestly, I'm not questioning your point, but really, do you know when you walk into Trader Joe's to buy a salad what the cost of goods you are buying is? Or Best Buy? Wal Mart, any retailer? No... Will they tell you if you ask. No....

What do you sell?

I am not defending the business model, but really, who is to say what is a fair margin of profit?

:dunno:

And WRT financing, is it really unfair for a dealer to earn a little commission for arranging $50-$100k financial transactions?

Do mortgage brokers not get paid for doing the same?

In my opinion, what makes the car deal so frustrating for buyers really is the variability of pricing. Not just between retailers, but within retailers.

No two buyers (generally) get the same deal.

FWIW, there are no such thing as "Financing Kickbacks" in the BMW world. BMWFS as a captive lender OWNS the BMW market (for leasing anyway). There is no #2. There are no "kickbacks". Period.


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## Stavrs (Sep 8, 2011)

hispeed4fun said:


> This is exactly what i was thinking going through negotiations last week. I have been in sales for 15 years and could not think of any other business or product that is so secretive.


I am bit curious - what other industries do you know that are less secretive? Let's say we buy a grill from Amazon - do we have any idea how much they make? You refinance a mortgage through a broker or a bank - any idea what they will make out of that? You get a new fridge from Best Buy - any idea what they negotiated with LG for their buy price?

Maybe I am missing something - if so please explain - but I cannot think of any other industry where, if you really search, you can find how much the middle person/dealer/retailer is making, or at the least be very close. But you can in the auto industry, basically decide how much you are willing to let a dealer make these days.


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## jagu (Nov 7, 2006)

[email protected] BMW said:


> I concur with Jon.....*The car industry is one of the few business that consumers do not feel the dealer is entitled to make a profit*.....to much info takes away any control dealers have to make a decent profit. I have to say that being a fester gets you the majority of info you need to make a fair deal on a BMW.


You should try being in the legal service industry:rofl:


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## neilsarkar (Jan 21, 2012)

When I leased my first BMW, I educated myself on the basics of leasing (residual, MF, and even MSD). So I avoided the typical "How much do you want to pay per month?" pitch. Even then I was charged $925 acquisition free and 0.0004 markup on MF without any disclosure about base MF/acquisition fee. Month later, after I joined Bimmerfest, I came to know about the mark-ups. And that rubbed me in a very wrong way. 

Therein lies the problem. I believe that like every business the car dealerships are entitled to profit. Heck, I would even pay MSRP if that were the industrywide norm. But, by trying to hide information from the consumers, the dealerships (and the automakers) have painted themselves in a negative way. Even today, most automakers (Audi is a bright exception) do not openly advertise their current incentives in their website. Rather, they put up some obfuscated information like $599/month with $3,699 downpayment with a huge chunk of fine print. Puh-leee-ease! 

So in the current scenario, to get a fair deal when buying/leasing a car a consumer has to be savvy, well-educated, and has a healthy bit of skepticism about anything the CA is saying. That sets up the mood for an un-healthy partnership between consumer and dealership from the very beginning.

Now, Greg and Jon certainly does not believe in the out-dated business model of information hiding, and kudos to them for that ! Only if rest of the followed their foot-steps...

One can dream, right?


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## dkreidel (Aug 24, 2005)

Jon Shafer said:


> The old family-owned dealers need to kick butt or they will have to sell to the corporations taking over the industry, *the Penskes, the Auto Nations, etc., and you can bet they make money on sales..*


Penske recently purchased a very large West Coast BMW dealer that had been a family operation for decades. I can tell you purchasing the last BMW, a'13 X5M was *a very different experience* than the last 14 BMW's and Mini's I've bought from the same CA and same dealer under private ownership.

It wasn't pretty, but a fair deal was reached. Had they not had the right car in stock, and had it not been the end of the year (December 30th) I would have gone elsewhere.


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## neilsarkar (Jan 21, 2012)

Jon Shafer said:


> Honestly, I'm not questioning your point, but really, do you know when you walk into Trader Joe's to buy a salad what the cost of goods you are buying is? Or Best Buy? Wal Mart, any retailer? No... Will they tell you if you ask. No....
> 
> What do you sell?
> 
> ...


+1000.

When one buys other luxury items at Neiman Marcus or Tiffany, one does not enquire about the 'invoice price'. It should be the same for luxury automakers at least. Buyers pay (non-inflated) MSRP along with fully disclosed fees and commissions. But as of now, MSRP remains a joke in the automotive world. You pay MSRP if you are a sucker (or new-money in the SF Bay Area).

I recently purchased a home and had to pay all the questionable administration/processing/origination fees at closing. But at least they were disclosed. The sneaky world of automotive leasing is a different story. Getting a fair deal (i.e. a deal where you are not paying significantly more than other consumers) here remains a dark art.


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## neilsarkar (Jan 21, 2012)

dkreidel said:


> Penske recently purchased a very large West Coast BMW dealer that had been a family operation for decades. I can tell you purchasing the last BMW, a'13 X5M was *a very different experience* than the last 14 BMW's and Mini's I've bought from the same CA and same dealer under private ownership.
> 
> It wasn't pretty, but a fair deal was reached. Had they not had the right car in stock, and had it not been the end of the year (December 30th) I would have gone elsewhere.


Was it Peter Pan? I never had good experience with them (corporate-owned or otherwise).


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## dgkfl (Feb 7, 2005)

I can't think of any other retail business where as much cost info is available to the consumer willing to do the research as the car business. And thanks to this forum, an educated BMW buyer is armed with more information than the buyer of almost any other marque.

A lot of BMW buyers must be business people. How many of you would want your customers to know as much about your costs as you know about a BMW dealer's costs? And by the way, you know darn well that the dealer needs to cover fixed costs; I don't hear anybody here calculating those into the cost of a deal.

Personally, much as I don't want to pay more than I have to for a car, I don't understand why any of us thinks a $500 profit on a $60,000 car, especially given all the fixed costs of running a car dealership, is remotely fair. I know I couldn't run my business on a 1% margin.

Just saying. I'm certainly going to try to get a $500 deal, but let's at least be fair. (Yes, I know, a lot of dealers do a lot of sleazy things, and I'm not excusing that; it's just tough to make a living if your customer can figure out what your exact bottom line is.)


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## JP 99300 (Sep 29, 2004)

neilsarkar said:


> Was it Peter Pan? I never had good experience with them (corporate-owned or otherwise).


I'm guessing he's referring to Crevier, since they sell BMW and MINI in SoCal.


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## BMW_F1 (Nov 6, 2009)

If you think about it, BMW new car sales is very transparent. Now the caveat is that you need to put in the work to make it be that way. Obviously any BMW dealer will try to sell you a car at 599/month and give you a terrible deal. You can though, use the various resources to your advantage. 

The amount of data we have is really significant. It is pretty easy to know exactly how much a dealer is making in profit. They have three avenues to make a profit on a new car sale: selling above invoice price, marking up interest rates and the acquisition fee, and the Added Value Program. The AVP means that if you meet the requirements you can receive a 5% bonus off of the base MSRP of the vehicle. The program is pretty complicated and you need to satisfy a lot of different requirements, such as participating in loaner car program, good CSI scores, complying with the corporate identity, and training for both sales and service employees. 

The point of this being, you need to do a lot and spend a lot to maintain the dealership. I think the general consensus here is that $500-$1000 over invoice with a base MF is a fair deal. I don't know the cost structure of a dealership, but I would hope this can keep them afloat if they have enough volume. 

Also the distinction needs to be made between disclosing the MF in your lease contract and the buy rate. If the dealer won't tell you the MF in your own lease contract, you should run from that dealership as fast a possible. The buy rate is akin to invoice pricing, something the dealer does not need to disclose to you. 

At the end of the day, the reason we want the disclosure is the poor reputation of most car dealers. We don't want to overpay, an issue which would be eliminated if there was no variability.

Post edited by moderator.


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## Alpine300ZHP (Jan 31, 2007)

jagu said:


> You should try being in the legal service industry:rofl:


THANK YOU. For all the crap car dealers get, lawyers get it worse. Everyone thinks we should work for free.


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## neurom (Jan 16, 2005)

BMW_F1 said:


> Also the distinction needs to be made between disclosing the MF in your lease contract and the buy rate. If the dealer won't tell you the MF in your own lease contract, you should run from that dealership as fast a possible. The buy rate is akin to invoice pricing, something the dealer does not need to disclose to you.


Important point, I have been demanding they disclose the buy rate, and I read your post and admit they really do not have to. The lesson for a customer is that when comparing offers the price as well as the MF offered by that dealer have to be considered upfront before the deal is sealed, rather than make the offer and then find out they get you on the back end with a surprisingly high upcharge on the MF.


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## Alpine300ZHP (Jan 31, 2007)

dkreidel said:


> Penske recently purchased a very large West Coast BMW dealer that had been a family operation for decades. I can tell you purchasing the last BMW, a'13 X5M was *a very different experience* than the last 14 BMW's and Mini's I've bought from the same CA and same dealer under private ownership.
> 
> It wasn't pretty, but a fair deal was reached. Had they not had the right car in stock, and had it not been the end of the year (December 30th) I would have gone elsewhere.


I had the same experience when I shopped a MBZ product at an Autonation store. Does not matter since I ended up with another BMW from a family owned store.


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## hispeed4fun (Mar 1, 2013)

Jon Shafer said:


> Honestly, I'm not questioning your point, but really, do you know when you walk into Trader Joe's to buy a salad what the cost of goods you are buying is? Or Best Buy? Wal Mart, any retailer? No... Will they tell you if you ask. No....
> 
> What do you sell?
> 
> ...


When you walk into a retailer like you mentioned you are buying something at a set price that day just like everyone else is that day. 2 people walk into bestbuy and buy the same fridge and pay the same price. You can also shop around and go to other retailers to get a better price but again same price for all in that store. I have been selling commercial real estate for over 10 years and there are never any secrets. Everyone knows how much the broker is making, the mortgage guy and so on. I cant sell a property without disclosing my commission. Mortgage rates are a little different because you can jack them up but everyone knows what the base is and you negotiate from there. Here the MF is a secret from the start. Then you have doc fees acquisition fees that are jacked up. I am not saying that you are not entitled to make a profit or a commission on the transaction but there shouldnt be secret fees that one guy pays and the other doesnt. I guess its all part of the game, the people who are knowledgeable are able to get better deals because there are enough suckers out there that make up difference that we save.


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## Robert A (May 18, 2003)

Personally, I always thought that dealers should post their own rate schedule in some prominent location in their showroom. Banks post their rates, so why can't dealers, right? That allows meaningful comparison shopping. 

But there's a basic problem... 

At its core, leases are all about payment, not about rate. In fact, lease math is way over most consumers' heads, and without all the factors (rate, residual, bank fee, etc), consumers are truly lost. Even it were fully available, it is still not shown on the lease contract.

I would like to see full disclosure -- but again, it won't mean much to most consumers.


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## Robert A (May 18, 2003)

Jon, tell me how the new car business works from a profitability standpoint.

You walk into any BMW dealer today, you've all these financial resources being expended by the dealer -- a big bucks showroom, tons of paid staff, millions of dollars of cars laying around. Then you've got test drives at dealer A but the sale goes to dealer B.

And yet you have profit margins of 1% +/-? How does this business survive? It makes no sense to me. I can only assume that the manufacturers are participating by providing back-end financial assistance to the dealers in a very big way.



Jon Shafer said:


> Honestly, I'm not questioning your point, but really, do you know when you walk into Trader Joe's to buy a salad what the cost of goods you are buying is? Or Best Buy? Wal Mart, any retailer? No... Will they tell you if you ask. No....
> 
> What do you sell?
> 
> ...


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## [email protected] (Jun 28, 2012)

hispeed4fun said:


> *When you walk into a retailer like you mentioned you are buying something at a set price that day just like everyone else is that day. 2 people walk into bestbuy and buy the same fridge and pay the same price.* You can also shop around and go to other retailers to get a better price but again same price for all in that store. I have been selling commercial real estate for over 10 years and there are never any secrets. Everyone knows how much the broker is making, the mortgage guy and so on. I cant sell a property without disclosing my commission. Mortgage rates are a little different because you can jack them up but everyone knows what the base is and you negotiate from there. Here the MF is a secret from the start. Then you have doc fees acquisition fees that are jacked up. I am not saying that you are not entitled to make a profit or a commission on the transaction but there shouldnt be secret fees that one guy pays and the other doesnt. I guess its all part of the game, the people who are knowledgeable are able to get better deals because there are enough suckers out there that make up difference that we save.


Thats not really true...Best Buy prices are negotiable...just saying


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## Robert A (May 18, 2003)

The difference with Best Buy (or any electronics retailer) is that the marketplace is completely transparent. Customers can instantly search hundreds of other merchants to get competitive prices. This level of transparency is lacking in the car business, although it is much better than it used to be. And while customers can do a pretty good job of honing in on the correct cash price, they are lost when it comes to leasing. In that sense, the car buying business is still rather opaque.



[email protected] said:


> Thats not really true...Best Buy prices are negotiable...just saying


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## [email protected] (Jun 28, 2012)

Robert A said:


> The difference with Best Buy (or any electronics retailer) is that the marketplace is completely transparent. Customers can instantly search hundreds of other merchants to get competitive prices. This level of transparency is lacking in the car business, although it is much better than it used to be. And while customers can do a pretty good job of honing in on the correct cash price, they are lost when it comes to leasing. In that sense, the car buying business is still rather opaque.


I do not agree 100% with how the business model of the car business is ... but with that said...even if EVERYTHING was transparent...90% of the buyers do not care. Everything boils down to one thing and one thing only...how much am I paying per month...

As for the Best Buy example the market place is NOT as transparent is everbody thinks. Prices for the same item purchased the same day at the same time can be different for different buyers. Also, when searching for pricing; all everybody is doing is searching for how much discount is off the *RETAIL* price...

BB is not disclosing to us how much kickback they get for moving that Samsung nor are they telling us what it actually costed them either are they?

FYI, the Xenox or canon copier your company is leasing for use...the lease rates are marked up from the 3rd party company you are doing business with...


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## nv6425 (Jun 10, 2007)

dunderhi said:


> One reason that I'm buying BMWs and not MBs is that I have become so familiar with BMW's pricing and incentive structures that I am confident when I enter the showroom floor I know within a couple of dollars of what my monthly payment will be. During my last purchase, my CA kept returning from the sales manager's office with the incorrect lease numbers. After the third try, the sales manager came out to explain to me all of the factors that were going into his lease numbers and he wasn't sure what part I didn't understand. I showed him my work sheets and we compared the differences. He went back to his office and after a few minutes he came back out and asked me into his office. We sat side-by-side at his computer and went over his inputs. I was able to point out how he entered the MSDs and trade-in(cash out) incorrectly and when we were done, his monthly payment was only about a buck different than my own. He even gave me copies of his work sheets just to make sure there weren't any more errors. He did have a small error in my favor which I pointed out and he corrected. So it's good to be educated and fair, because I think most people would have ended up paying more and I'm not confident that the dealership would have even known why.
> 
> Now the finance guy was a different story, since he didn't believe me when I told him he was making an error in my favor resulting in a lower lease payment than the sales manager and I had calculated. To my surprise when they called me back to resign my paperwork, which I assumed would happen when he finally realized he had an error, it was actually because the sales manager realized the MF and residual improved and wanted to lower my monthly payments by about $100/mo. So although many folks claim all dealers are deceptive, I think my dealership is pretty honest, but maybe not so good with numbers. I wasn't originally planning on having my cars serviced by them, but now I think I will give them a shot.


That's a great dealer, don't let them get away!


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## Alpine300ZHP (Jan 31, 2007)

mpc578 said:


> There are a lot of good, fair dealers out there, and it looks like you found one. Unfortunately, like in most things, the negative ones get all the publicity.


Very true. I am well aware of how a few bad apples make everyone in a profession seem rotten. I am a lawyer and can attest that lawyers get the same cheating people attitude as car dealers.


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## MRCW (Nov 4, 2009)

Alpine300ZHP said:


> THANK YOU. For all the crap car dealers get, lawyers get it worse. Everyone thinks we should work for free.


As a contractor, I too, dwell on the bottom rung...I am amazed that if someone gets into trouble, they want spend money on the "best" lawyer they can afford, but when they want to purchase a house (generally the biggest transaction in their life...( sorry BMW)) they want to find the cheapest builder... OK, off my soap box...

What I find most atrocious is not the pricing or lack of disclosure, but when a lie is made about it...They " disclose" one interest rate and then figure another one, or value your trade for "X" and then somehow the paperwork has it for "Y."

I recently bought a new truck for my business and they quoted be a 4.99% interest rate. when I said i could get it for 1.99% from my credit union ( I could...) they said they would match it... Once the final paperwork came out, I sat there with my tablet, crunched the numbers and found they were charging me 3.99%.

When I complained to the F&I guy he said, "sorry, i must have input the wrong interest rate..." I walked out...The sales guy and the manager came over... got the "we already detailed the car, we'll make it right. etc..." I just kept going.

This type of stuff is what get car dealers the bad reputation


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## Alpine300ZHP (Jan 31, 2007)

cwickberg said:


> As a contractor, I too, dwell on the bottom rung...I am amazed that if someone gets into trouble, they want spend money on the "best" lawyer they can afford, but when they want to purchase a house (generally the biggest transaction in their life...( sorry BMW)) they want to find the cheapest builder... OK, off my soap box...
> 
> What I find most atrocious is not the pricing or lack of disclosure, but when a lie is made about it...They " disclose" one interest rate and then figure another one, or value your trade for "X" and then somehow the paperwork has it for "Y."
> 
> ...


LOL. Thanks for modifying my post.


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## MRCW (Nov 4, 2009)

dunderhi said:


> I think my dealership is pretty honest, but maybe not so good with numbers.


Ha Ha! I have never met a car dealer who wasn't a wiz at numbers...If they weren't they wouldn't be in business or have a job in the car sales industry!


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