What's up with the $5,000 mark up and 2 per dealer limit?

[Mote]

So today I wrote my dealer about putting a deposit on a 1M. I currently have a lease on a 2008 E92 335i which will be up in March. This is the response from them:


Mario,

Thank you for your inquiry, YES we can take your deposit, every BMW center gets 2 vehicles only.
That's why we get $5000. over MSRP for each ,
Please let me know if you want to proceed with the ordering.

Thank you in advance.
JACOB AKIVA
562-427-5494
714-595-7038

Now earlier today I read this report here on Bimmerpost.

Should I point this out to the sales advisor?

[///M1]

That is the bigest BS I have ever heard of, you should send this to BMW USA Corp office so they can see how genuine customers can get put off by antics of their dealer network. Pretty shameful.

Dealers don't even know yet how many they are getting. Depending on your relationship with the dealer he should take none to minimal deposit. I walked straight into 1 and they asked for a fully refundable $200, which I think is fair, shows you have interest. Another dealer I called up from where i bought 3 BMWs over the last several yrs told me my word is more than enough that i am serious (as serious as I can be at this stage when speculations are still running rampant.)

Just walk away from that guy as quickly as you can.

[MDORPHN]

Yep, complete crap.

Who's the dealer?

Neil

[Mote]

Originally Posted by ///M1

That is the bigest BS I have ever heard of, you should send this to BMW USA Corp office so they can see how genuine customers can get put off by antics of their dealer network. Pretty shameful.

Dealers don't even know yet how many they are getting. Depending on your relationship with the dealer he should take none to minimal deposit. I walked straight into 1 and they asked for a fully refundable $200, which I think is fair, shows you have interest. Another dealer I called up from where i bought 3 BMWs over the last several yrs told me my word is more than enough that i am serious (as serious as I can be at this stage when speculations are still running rampant.)

Just walk away from that guy as quickly as you can.

Seriously unbelievable. I laughed when I read this response. This is the same dealership that I leased my current car through.

Originally Posted by MDORPHN

Yep, complete crap.

Who's the dealer?

Neil

Long Beach BMW.

What's surprising is that this dealer has a very good reputation in Los Angeles for being the most hassle free and forthcoming. At least when I got my car almost 3 years ago. I guess things have changed.

[///Mangler]

Talked to a dealer today an I knew more than he did, but $2500 refundable, guaranteed MSRP was avail. The first allocation is still avail. There are numerous names on the list, but no one has a deposit down yet.

T

[Jaguar66]

Anyone who has been through trying to get an early E36 or E46 M3 knows all too well that this is standard profit making procedure on these type of cars. It is something I expected. There will be dealers that will do this until they can't get away with it anymore, meaning that until cars are available somewhere else.

Originally Posted by Mote

So today I wrote my dealer about putting a deposit on a 1M. I currently have a lease on a 2008 E92 335i which will be up in March. This is the response from them:


Mario,

Thank you for your inquiry, YES we can take your deposit, every BMW center gets 2 vehicles only.
That's why we get $5000. over MSRP for each ,
Please let me know if you want to proceed with the ordering.

Thank you in advance.
JACOB AKIVA
562-427-5494
714-595-7038

Now earlier today I read this report here on Bimmerpost.

Should I point this out to the sales advisor?

[Franklin Joseph]

My main dealer is waiting for more info before taking a deposit.

I contacted another local dealer and they said they were only getting 1 allocation. Said price will be in the $50s and wanted a $5k deposit. No mention about markups.

After reading some posts today about not being limited, i'll probably wait on my preferred dealer.

[rossii]

If there isnt a limit on the numbers produced (if this is true) you are paying for the right to own the first ones. I would wait and see what happens.

[Mote]

Originally Posted by RobMason

Anyone who has been through trying to get an early E36 or E46 M3 knows all too well that this is standard profit making procedure on these type of cars. It is something I expected. There will be dealers that will do this until they can't get away with it anymore, meaning that until cars are available somewhere else.

Oh I know more than anyone about dealer mark ups on M cars, that's for sure. What I don't like is the dishonest justification for it by telling me that only 2 cars will be given to each dealer. Where did he pull that number from?? Like it was previously mentioned, dealers don't know how many cars they will be receiving. And based off todays news it looks like BMW will make as many as the public asks for. Shady business practices.

I will be emailing other local dealerships to see what response I get.

[cpippolo]

That's crazy. I put down $500 to be first on the list and my SA claims he has never sold a car over MSRP and never will. Might want to find a different dealer.

[1swift1]

Pure garbage. I'd not walk, but RUN to another dealer. I've got a non-refundable $1000 down at a dealership in NV, and they wrote on the receipt/purchase order that they will not charge over MSRP.
By the way, when I first got interested (early 2004) in the Lotus Elise, there were a ton of dealers trying to add a mark-up to the MSRP. After the hysteria died down (6 months), you could find cars that were a few thousand under MSRP (unfortunately, I ordered mine when the best I could do was MSRP).
If/when the news is confirmed that there really won't be a production limit (see other threads), then you should mention that to your POS dealership.

[Robert]

Originally Posted by Mote

Seriously unbelievable. I laughed when I read this response. This is the same dealership that I leased my current car through.



Long Beach BMW.

What's surprising is that this dealer has a very good reputation in Los Angeles for being the most hassle free and forthcoming. At least when I got my car almost 3 years ago. I guess things have changed.

Forget it. BMW just announced the car won't be limited in production. So the 2 per dealer don't hold true anymore. Tell them you are taking the deposit elsewhere and have a nice thanks giving.

I believe the independent owner of Long Beach sold the dealership to Sonic. When I bought my 135i there I didn't pay a dime over MSRP and I was the first guy who took delivery there with deposit down a year in advance.

[Brandon26pdx]

That might be true they will only get 2 allocations...as in, 1M's that show up at the dealer without having been pre-ordered by customers, but customer ordered cars don't come out of dealer allocation. That's been covered a bunch of times.

Basically, dealers will only jack you around if you let them. Those sales guys will play whatever game they think will grind more margin out of a deal. Nothing personal IMO, that's just how the car game is played in our culture. Guys tend to get overly emotional over hot-hot new stuff coming down the pike, which frequently plays right into the hands of dealers.

[rapter]

What bull... Report him

[ucla1995]

ED it.

[Doctor J]

Why you getting all irate?

All brand new models with limited initial availability suffer from dealer gouge. i.e. M3, M5, Z06, GTR etc etc

Considering the current economic climate -- can you blame them for trying to make a buck? It's called CAPITALISM

If you don't want to pay the premium to be one of the first -- you will have to wait my friend

[rca06Mcoupe]

some random related historical details.....

With the E46 M3, I recall, there were rumors beforehand that each USA dealer was to get one vehicle that was to be for demo only -- that did not pan out, dealers sold whatever they were allotted. I also recall some low volume dealers got ZERO allocations for the first six months.

My own high volume dealer in Boston got 6 vehicles in the first allocation, but the following month only got two cars allocated. I was 9th on the list of about 135 people.
However, #4 on the list did not take delivery because he didn't like the Cinnamon leather interior with the Alpine White; I happened to drop in at the dealership the next day and bought that one on the spot, so I wound up with a car from the first allocation.
Fortunately it had the same optional equipment I was considering.

With the Z4M Coupe I was first on the list at a suburban Boston dealership; only 4 people were on that list. Z4 M Coupes and M Roadsters were available with little or no wait for ordering, and also available at times in the showroom and out on the lot-== there was relatively low demand.

Each time I put down $500. fully refundable deposit at MSRP.

Re: mark up issue, both dealers said the only vehicle they remember they ever marked up was the Z8.

For the 1M I will wait until they fully reveal the car and specs and pricing, and probably put in a deposit if I like what I see. I haven't spoken to the dealer yet about the 1M. I have 18 months left on extended warranty & am really enjoying the Z4 M Coupe.

[lucid]

In this economy, I'd guess that type of BS will die down in about 2-3 months after release, and they will start discounting significantly 5-6 months in. There is no reason to pay more than sticker if you really want one of those initial cars. That is pretty much what happened with the E92 M3 (I bought one when it came out).

[1M Fan]

I guess I should feel lucky. Only a $1000 refundable deposit on a car at MSRP. I normally balk at MSRP, but I don't feel like waiting.

[I<3BMW]

Ok, I don't know this guy, but I sell BMW's too and I can vouch for his claim of hearing 2 per dealer. I had M car training 2 weeks ago at my dealership and of course the 1M came up. We were told the same thing by a very attractive German lady Now, as far as the 5k over, that would be at that dealers discretion. As a client advisor, I think it's strange how people act like a profit is a 4 letter word, it's not. Without profit, the cars that we all love to drive wouldn't be available nor would we have the money to buy them.
I don't believe we are going to sell them for 5k over MSRP but if someone is willing to pay it is that gouging? Maybe it just means that they were priced to cheap to start with.
I know that I myself have wanted something that was priced super cheap and I knew that other people were interested in it so I offered more money than the asking price. A couple of times I got those items and sometimes someone else also knew it was a good deal and offered even more over the asking price than I did.
Sorry for the rant. I do hope that the 1M's are reasonably priced and they are plentiful so I can sell a lot of them I won't mind the test drives either! I love my job!

[lucid]

People are questioning the extent to which the dealership adds "value" to this transaction. I think the dealerships add value, but not to that extent, so I personally wouldn't pay for it. Someone else might.

Having said that, it's a free market. The dealership can ask for whatever it wants for the property sitting on its lot.

There is also free speech. People can pass judgment and call that whatever they want.

That simple really...

[vividracing]

Simple: go elsewhere!

I test drove a Beetle Turbo when they first came out here in the US. (Yes, I know, it was going to be a second car, driven mainly by my wife, honest!) They were fairly difficult to come by initially, in fact, at the time, I recall that there was only the one dealership in the Phoenix area that had them.

Anyway, this dealer had a $4500 markup on it, Market Value Adjustment, I think they called it. I liked the car, but certainly not enough to pay $4500 over the odds, so I walked.

Graeme