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      03-06-2008, 06:22 PM   #1
rsen
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Cancelling order.

After much thought, I have decided to cancel my order for the 135i. I would have liked to own this car so much that I was willing to:

Pay full MSRP on a car that is priced 20% higher than the US car despite the Canadian dollar at par.

Pay a ridiculous $2000 for freight and PDI ($775 in the USA).

Pay $800 dollars for the priviledge of having a metallic colour ($475 in the USA).

Live with a watered down free maintenance plan (no coverage for brake rotors/pads, wiper blades, belts, etc., unlike in the USA).

Live with the uncertainty of whether the car will or will not come with the "secondary" oil cooler, which would reduce the risk of the car overheating.


However, I just cannot accept a finance interest rate that is more than double the interest rate for its big brother the 335i (2.9%), and simply out of line with the rest of the automotive industry at this time. I will be be sending my sales associate the following e-mail (which will also be sent to BMW Canada to inform them that they have possibly lost a new customer):


"Thank you for your prompt reply. I agree that the 135i is going to be a great car (from what I have read in various reviews). However, the 1 series is still BMWs new entry-level series car. As such, I would have thought that BMW would offer financing rates in line with the rest of the automotive industry, let alone with the rest of BMWs own line of cars.

Yes the 135i is a very desirable car. However, the difference in interest paid on a 49,700 car loan (with all taxes and fees included), at an interest rate of 6.67% vs 2.9% (the current rate for the 335i, its big brother) is over $5000, over the 5 year loan period. This is not a small amount of money. Therefore, it is with regret that I have to decline purchasing the 135i at this time, however much I would like to get this car.

Having said that, I understand that BMW Canada sets the interest rates and that your hands are tied. I have appreciated your help over the past few weeks. I will revisit purchasing this car in the near future, once the initial "frenzy" has subsided, provided that BMW Canada lowers the finance rate to a more competitive level, as it has now done with the 335i. You can refund my $500 deposit to my VISA card. Thank you."
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      03-06-2008, 06:37 PM   #2
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More than understandable.
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      03-06-2008, 06:38 PM   #3
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Nice note to the dealership - let us know how they respond.

For the rest of us, this is a great example of 'not burning bridges' behind you and yet getting the point across!
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      03-06-2008, 06:51 PM   #4
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^^^

Agree with hugo...let us know what the response is.
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      03-06-2008, 06:56 PM   #5
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Quote:
Originally Posted by rsen View Post
After much thought, I have decided to cancel my order for the 135i. I would have liked to own this car so much that I was willing to:

Pay full MSRP on a car that is priced 20% higher than the US car despite the Canadian dollar at par.

Pay a ridiculous $2000 for freight and PDI ($775 in the USA).

Pay $800 dollars for the priviledge of having a metallic colour ($475 in the USA).

Live with a watered down free maintenance plan (no coverage for brake rotors/pads, wiper blades, belts, etc., unlike in the USA).


However, I just cannot accept a finance interest rate that is more than double the interest rate for its big brother the 335i (2.9%), and simply out of line with the rest of the automotive industry at this time. I will be be sending my sales associate the following e-mail (which will also be sent to BMW Canada to inform them that they have possibly lost a new customer):


"Thank you for your prompt reply. I agree that the 135i is going to be a great car (from what I have read in various reviews). However, the 1 series is still BMW’s new entry-level series car. As such, I would have thought that BMW would offer financing rates in line with the rest of the automotive industry, let alone with the rest of BMW’s own line of cars.

Yes the 135i is a very desirable car. However, the difference in interest paid on a 49,700 car loan (with all taxes and fees included), at an interest rate of 6.67% vs 2.9% (the current rate for the 335i, its big brother) is over $5000, over the 5 year loan period. This is not a small amount of money. Therefore, it is with regret that I have to decline purchasing the 135i at this time, however much I would like to get this car.

Having said that, I understand that BMW Canada sets the interest rates and that your hands are tied. I have appreciated your help over the past few weeks. I will revisit purchasing this car in the near future, once the initial "frenzy" has subsided, provided that BMW Canada lowers the finance rate to a more competitive level, as it has now done with the 335i. You can refund my $500 deposit to my VISA card. Thank you."


I did the same thing. Could not agree more. Can you tell me where is offering 2.9% on 335ci because BMW site is still saying 3.9%. Thanks.
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      03-06-2008, 07:10 PM   #6
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wow hard to understand why BMW is doing this. Seems they are really trying to reduce demand, but why notdo the same in the USA??? The answer can not be volume... I am perplexed....
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      03-06-2008, 07:41 PM   #7
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rsen;
Fully understand and agree with your position.
I'm fortunate enough to be paying cash (not getting a lot on GICs right now, so my after-tax opportunity costs are minimal).
Nice note to your dealer & BMW Canada..
Keep us posted if you get a response.
Good luck...
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      03-06-2008, 08:54 PM   #8
rsen
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Ronsil,

BMW.ca shows 2.9% financing for the 335i coupe, 3.9% for the 335Xi coupe.
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      03-06-2008, 10:42 PM   #9
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Quote:
Originally Posted by rsen View Post
However, I just cannot accept a finance interest rate that is more than double the interest rate for its big brother the 335i (2.9%)...
What BMW is doing really feels like bait and switch. I reluctantly swallowed the price premium in Canada but am having real trouble swallowing the interest rate. The reality is that the 135i is just as expensive as the 335i when leased or financed through BMW.

To piss us off further, http://www.1addicts.com/forums/showthread.php?t=4929 indicates that the US lease rate is 6.84% (0.00285 money factor) vs our 7.75%.
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      03-07-2008, 01:04 AM   #10
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I've said it before and I'll say it again. Why should the 1 be any less money than the 3 series? What does it not have that the 3 does? God I hope BMW NA isn't keeping track of these posts.
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      03-07-2008, 03:42 AM   #11
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^^
It might do them some good to pay attention to such enthusiast forums such as these... but hey. .that would be way too good of them.
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      03-07-2008, 04:32 AM   #12
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Quote:
Originally Posted by fe1rx View Post
What BMW is doing really feels like bait and switch. I reluctantly swallowed the price premium in Canada but am having real trouble swallowing the interest rate. The reality is that the 135i is just as expensive as the 335i when leased or financed through BMW.

To piss us off further, http://www.1addicts.com/forums/showthread.php?t=4929 indicates that the US lease rate is 6.84% (0.00285 money factor) vs our 7.75%.

^^^

I'm not sure about being bait and switch, but I do think it's gouging. I think we should expect the rates to be higher, especially since it's a new model. I don't think it's reasonable to have a new model introduced at 2.9%, I've never seen any auto maker do that. With that said, I definitely think the rates is too high, especially when you take into account what the US get.
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      03-07-2008, 08:20 AM   #13
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Quote:
Originally Posted by Bringinthewolf View Post
I've said it before and I'll say it again. Why should the 1 be any less money than the 3 series? What does it not have that the 3 does? God I hope BMW NA isn't keeping track of these posts.
I like your argument, why should the 1 finance/lease rate not be the same as the 3 finance/lease rate?
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      03-07-2008, 04:57 PM   #14
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Here is a very long email which I wrote to my SA to cancel my order. After reading it now, I think I must have been drunk at the time.

My SA replied back today, nothing concrete but it looks like they understand the situation and want to do something about it.


Dear Mr. xxxxx,

At this time I regret to inform you that I will be cancelling my order for the 135i, VIN WBAUC73598xxxxxxx.

I have been eagerly anticipating the arrival of the 135i since the announcement of its release and from the time I put my deposit down on the vehicle in July of 2007. The 135i is currently the only vehicle on the market that I would love to own. Well I guess I should clarify that as the only one among vehicles I can afford. As a member of 1addicts.com I have been closely following the development and release of this vehicle to the point where it is the first thing I look at in the morning when I wake up and the last thing I look at before I go to bed at night.

During the 2-3 month wait between the release of the US and Canadian pricing I was hopeful that BMW Canada would price the 135 closer to the US pricing since this was a new vehicle and the dollar has been around par the whole time leading up to the release. Much to my disappointment this was not the case. The price of the 135i as I configured it comes in at $46 095 CAD and a similar American equipped vehicle comes in at $37 150 USD, both including freight and PDI. At the time my initial thought was that the $8945 price difference (approx 124%) was too high to continue.

After much contemplation and looking at pricing of other vehicles in the Canadian market and most importantly the strong desire I had to own this car, I decided the inflated price was worth paying and I would proceed.

I still had faith that BMW Canada would provide reasonable lease/finance rates for the 135i. After all the president and CEO of BMW Canada Inc., Lindsay Duffield stated in an online interview with customers through the Globe and Mail; “Our pricing is always based on the competitive market situation in Canada, and the prices on our vehicles and options are competitive versus other manufacturers.” He further went on to state; “We've been offering very attractive lease and finance rates all year, so if you leased/financed your vehicle with BMW Financial Services, you would have already received a very attractive program.”

My main point of contention and the reason why I am cancelling my order is the finance rate, 7.75% is not an “attractive lease and finance rate”. It is actually a very poor rate and nowhere near competitive with any manufacturer or even comparable to any model in BMW’s current line up. After a brief look through BMW.ca, it appears that the lease rates range from 2.9% - 4.9% while the financing rates range from 2.0% - 3.9% on all models including M series cars.

I understand the 1 series is a new model and in high demand and for that I expected to pay MSRP, I did not even try to inquire about a discount on the price. However a finance rate of 7.75% is preposterous, this effectively makes the 135i more expensive than the 335i coupe.

I also remember hearing that the 1 series was designed to bring younger buyers into the BMW family, it was actually expected that the 1 series demographic would be 10 years younger than the current BMW customer. I am not completely sure on the current BMW customer demographics but I am 30 y/o and earn over 100k per year. I think I would fit into the demographics of a customer BMW would like to have.

I guess to sum up I plan on purchasing and financing a new vehicle sometime over the next 6 months. I want this to be the 135i but that will only occur if the rates come into line with all of the other current BMW models. I understand that you do not set these rates and there is nothing you can do about them. I just hope you forward this email on to someone at BMW Canada and they realise they are going to lose a significant number of valuable future customers with these finance and lease rates.

Maybe I am wrong and the market can bare these types of rates on a vehicle that fits into the bottom of the range for a manufacturer. If this is the case sometime down the road I will be driving an Infiniti G37 or some other model and will not be very happy but at least I will be happy knowing that I paid what I feel is fair market value for a new vehicle.

Before you try to sell me on a 335i coupe or another BMW model I want you to know I currently have no interest in any model outside of the 135i. Well the new M3 would be nice but that is outside of my price range.

The VISA I used to place my deposit is no longer valid, so you can either send me a check or I can provide you with another VISA to refund the money. I am sorry if you feel I wasted your time but hopefully sometime in the not to distant future we can be working out a deal on a 135i.

Best Regards,

xxxxxx

Hi xxxxxx,

I understand where you are coming from. The finance rate is 6.75% for the 1 series, and the lease rate is 7.75%.
I attended the 1 series training session yesterday, and a lot of sales people addressed the issue on the high interest rate.

I will talk to my general manager (xxxx xxxxxx) about this issue in the meeting and see if we can do anything about it.
Maybe BMW will do something in the next few weeks. We don't know yet.
I will get back to you in the next couple of days.

Thank you.
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      03-07-2008, 05:31 PM   #15
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interesting...

yeah, those are the rates we're all getting...
I WONDER if BMW will do anything about them between now and the time newly ordered cars arrive (I was told June if you ordered right now).
I doubt it... any manager would ask, how are they selling? GREAT. Good enough.
No change where none is needed kinda thing.

Apparently, you don't agree on financing until the car shows up at the dealer... so these rates haven't gone into effect for anyone that has already ordered it and not received yet... so BMW, well aware of this, must have posted these rates FOR THE NEAR FUTURE... and thus, I doubt, in spite of the reply from your SA, that they will change in the next few months...
sad, but true...

now, don't banks offer variable rates for car loans that essentially use Prime as the variable rate??? Prime is at 5.25 now, say it does vary, but I doubt it will hit 6.75, and stay there...
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      03-07-2008, 05:40 PM   #16
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I received a reply form my sales associate regarding the high interest rate. He was recently at BMW Canada to view the new 1 series and says that the 6.75% finance rate, as set by BMW Canada, is non-negotiable. The rate is what it is. He also said that BMW Canada had originally planned on setting the rate even higher for the 135i...Yikes. They then decided to offer it at this "lower rate" of 6.75%. Maybe we should applaud BMW for having such restraint...lol.

Anyway, I am a patient man and can wait out the initial high demand for the car. Remember, by the time the car is officially released, the 2008 model year will be almost 1/2 over. I fully expect production to increase significantly for the 2009 model year and beyond. After all, it is their new "entry level" series. Keeping it a low volume car beyond the first shortened model year wouldn't make any sense. I am sure BMW would like to sell tons of these and bring new customers into the fold. Maybe I am wrong.

He also said there will be no problem with refunding my deposit. And he will just add some options to the car before it is built, to have for the next potential customer.
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      03-07-2008, 05:52 PM   #17
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I dont think they will be changed in the near term either but his attitude toward the situation seemed to the most interesting to me. He did not just say "Those are the rates and if you dont like them too bad, I will sell your car to someone else."

Also since the high rates were a topic of dicussion among the sales people they must have come concern and that the sales and interest cant be as high as some seem to think they are on here.

I may be reading a little to much into what was said but that is the feeling I get from him.
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      03-07-2008, 06:47 PM   #18
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Quote:
Originally Posted by YYZATC View Post
I dont think they will be changed in the near term either but his attitude toward the situation seemed to the most interesting to me. He did not just say "Those are the rates and if you dont like them too bad, I will sell your car to someone else."

Also since the high rates were a topic of dicussion among the sales people they must have come concern and that the sales and interest cant be as high as some seem to think they are on here.

I may be reading a little to much into what was said but that is the feeling I get from him.
YYZATC, definetly keep us posted on what you hear!
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      03-08-2008, 03:35 PM   #19
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Quote:
Originally Posted by rsen View Post
Live with a watered down free maintenance plan (no coverage for brake rotors/pads, wiper blades, belts, etc., unlike in the USA).
My SA has advised that the 1 series, unlike any other BMW model, will have 3 year / 60,000 km Service Inclusive (brake pads, rotors, belts, wipers, clutch).
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      03-08-2008, 04:20 PM   #20
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Quote:
Originally Posted by fe1rx View Post
My SA has advised that the 1 series, unlike any other BMW model, will have 3 year / 60,000 km Service Inclusive (brake pads, rotors, belts, wipers, clutch).

Same here...I was told the same thing
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      03-12-2008, 01:30 PM   #21
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Just received a call from my BMW SA, he says they will refund my money no problem but he suggested that I wait until the car comes in and after I take it for a test drive. If I still dont want the car at that point then they will refund my money. I told him that was fine but that my decision wouldnt change until the finance rates come down. He said that he wasnt sure but BMW might do something about them by that point. I highly doubt that is the case, I just think he wants me to wait and not go out and buy another new car in the meantime. I am sure he is gambling that once I drive the car I will love it and forget about the high rate and just buy it.

I already know I love the car so a test drive is not going to change my opinion for the good. All it could possibly do is turn me off of it, if I happen to not love it as much as I have built up in my head.

We also talked about the free service that is included. I told him that this is just more of a gimick to attract poeple in than anything. The only thing I would get out of this would be a new set of brake pads and maybe some wipers. Does anyone really think they are going to go through a clutch, rotors or belts in 60 000km? I am willing to bet that if you do they wont be covered anyway because they will say that is was not "normal wear and tear". These type of warranties never cover excessively hard driving and if you ever track you car you can forget about any of these beig covered. He had nothing to say against this argument so I guess he agreed.

This all leads me to believe that this car isnt in as high demand as we may believe if he is willing to wait until after I test drive it and decide no before he trys to sell it to a new customer.

Well the car is on the BOHEME and supposed to arrive in Halifax, March 18th. Not sure how long it will take to get to Toronto but I should be having a test drive near the end of march.
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      03-12-2008, 02:32 PM   #22
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I'm certain the demand on the 1 series isn't as high as it's being made out to be.

Mark my words, some interesting things will happen over the course of 2008.
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