HELP OT: Is "Advertising Fee" 1% Legitimate?
11-30-2004, 06:37 AM
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I don't understand the term "Over invoice", does that mean the dealer is giving you MSRP + some amount (Over invoice) or does it means its giving you MSRP less this "Over invoice" amount??
11-30-2004, 06:52 AM
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"MSRP" or "sticker price" is the nominal selling price that is advertised. "Invoice" is the price the dealer pays BMW for the car, on a fully loaded 545i that is roughly $6,000 less than MSRP.
There are three "invoice" prices that you may come across however. The first is that found published on internet sites like kbb.com and edmunds.com. That "invoice" price includes the car plus a BMW Systems and Training Fee of $160 that every car has and that every dealer pays (in the U.S. I should say). The actual BMW internal "raw invoice" ("raw" is my term) is the the price paid for the car only by the dealer with no fees added. The third one is the "dealer cost invoice" (again my terms), that is the actual gross cost of the car that the dealer pays BMW and this is the raw price plus mandated fees like the Systems and Training Fee and in some cases the MACO fee.
If you can get your dealer to print out a Vehicle Report/Wholesale (if I remember correctly, it's not in front of me) you will see the raw invoice (base and options) plus destination plus Systems and Training plus MACO (if applicable). That total would be that "dealer cost invoice".
"Over invoice" means over those "invoice" prices above, whichever one you are working up from.
Note that BMW does not have "holdback", in other words retained profit, that the dealer receives once the car is sold. "Holdback" is normally 2-3% of the vehicle price. Instead as I understand it BMWNA has something I think is called "Advanced Payments" which are based on a complicated formula of sales, customer satisfaction, investments made by the dealership owner, etc. The intent is to reward a dealer that sells lots of cars, has good customer service, and is willing to improve it facilities.
There are three "invoice" prices that you may come across however. The first is that found published on internet sites like kbb.com and edmunds.com. That "invoice" price includes the car plus a BMW Systems and Training Fee of $160 that every car has and that every dealer pays (in the U.S. I should say). The actual BMW internal "raw invoice" ("raw" is my term) is the the price paid for the car only by the dealer with no fees added. The third one is the "dealer cost invoice" (again my terms), that is the actual gross cost of the car that the dealer pays BMW and this is the raw price plus mandated fees like the Systems and Training Fee and in some cases the MACO fee.
If you can get your dealer to print out a Vehicle Report/Wholesale (if I remember correctly, it's not in front of me) you will see the raw invoice (base and options) plus destination plus Systems and Training plus MACO (if applicable). That total would be that "dealer cost invoice".
"Over invoice" means over those "invoice" prices above, whichever one you are working up from.
Note that BMW does not have "holdback", in other words retained profit, that the dealer receives once the car is sold. "Holdback" is normally 2-3% of the vehicle price. Instead as I understand it BMWNA has something I think is called "Advanced Payments" which are based on a complicated formula of sales, customer satisfaction, investments made by the dealership owner, etc. The intent is to reward a dealer that sells lots of cars, has good customer service, and is willing to improve it facilities.
Originally Posted by Wiu-Bimmer' date='Nov 30 2004, 08:37 AM
I don't understand the term "Over invoice", does that mean the dealer is giving you MSRP + some amount (Over invoice) or does it means its giving you MSRP less this "Over invoice" amount??
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11-30-2004, 06:58 AM
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The dealers invoice is what he supposedly is going to pay for the car from the factory. So, his cost plus. My explanation is very basic. See above for a fuller explanation
11-30-2004, 07:10 AM
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Originally Posted by Iceman' date='Nov 29 2004, 08:49 PM
Found on Carbuyingtips.com:
Advertising Fees
Usually when you buy through discount sites like from Cars.com, InvoiceDealers, Autoweb, Car.com, Autobytel, CarsDirect and AutoUSA you avoid ad fees. Car makers charge dealers for regional and national advertising campaigns.? These charges are reflected on the invoice and are a legitimate cost of doing business.? This is where opinions differ, as I feel it's their cost of doing business, not ours.? Tell them to pay your fees like gas, wear and tear, and your time for driving all over town to shop for the car.? Many dealers are sticklers about this fee, and it's difficult to get them to drop it, but some do waive the fee. If a dealer adds on their own advertising fee above and beyond this, they are out of bounds.? Dealers try to charge $250 -$1000, but it should not be more than $250.? You're not paying for their inability to find cost effective ads.? $1000 ad fees allow the dealer to charge you a lower price on the car.? You think you're saving money, but ad fees take it right back.? This fee may also show up as "Sales Promotion Fund", or DAA, or ADA, or anything referring to ads. Edmund's says it's non-negotiable, but they are wrong.? Anything in life is negotiable, and I don't give up that easily. What angers me the most is the cryptic way that dealers hide this fee from you by using huge acronyms, then playing stupid when you question it. "Duh, I don't know, we always charge this fee".? A Nissan Dealer in Chicago told one of our visitors that they have to charge the Nissan advertisement fee and can't drop it or they can face a class action law suit.? Nice scam.? Where's my bull icon?
Ford dealers use the cryptic term "FDAF/LMDA" on their invoice.? "FDAF" stands for "Ford Dealer Advertising Fund", and the "LMDA" stands for Lincoln Mercury Dealer Advertising.? Why can't they just disclose it as "ad fee"? I didn't pay an ad fee for my Lexus in 1998 or the Mazda Millenia in 1999.? Honda add fees are built into the invoice price, don't let them charge you extra.? Other companies choose their own cryptic acronym, like DAA (Dealer Area Advertising),? TDA (Toyota Dealer Advertising Fee), HDA, you get the picture.? If it ends with an "A", it's most likely an advertising fee. Speaking of advertising, dealers are neither grateful nor shy about plastering their name on the trunk of your shiny new car at a cost of $0 to them. You then spend the next several years advertising their dealership free of charge with your moving billboard.? You should charge them a $600 advertising fee for that.
Advertising Fees
Usually when you buy through discount sites like from Cars.com, InvoiceDealers, Autoweb, Car.com, Autobytel, CarsDirect and AutoUSA you avoid ad fees. Car makers charge dealers for regional and national advertising campaigns.? These charges are reflected on the invoice and are a legitimate cost of doing business.? This is where opinions differ, as I feel it's their cost of doing business, not ours.? Tell them to pay your fees like gas, wear and tear, and your time for driving all over town to shop for the car.? Many dealers are sticklers about this fee, and it's difficult to get them to drop it, but some do waive the fee. If a dealer adds on their own advertising fee above and beyond this, they are out of bounds.? Dealers try to charge $250 -$1000, but it should not be more than $250.? You're not paying for their inability to find cost effective ads.? $1000 ad fees allow the dealer to charge you a lower price on the car.? You think you're saving money, but ad fees take it right back.? This fee may also show up as "Sales Promotion Fund", or DAA, or ADA, or anything referring to ads. Edmund's says it's non-negotiable, but they are wrong.? Anything in life is negotiable, and I don't give up that easily. What angers me the most is the cryptic way that dealers hide this fee from you by using huge acronyms, then playing stupid when you question it. "Duh, I don't know, we always charge this fee".? A Nissan Dealer in Chicago told one of our visitors that they have to charge the Nissan advertisement fee and can't drop it or they can face a class action law suit.? Nice scam.? Where's my bull icon?
Ford dealers use the cryptic term "FDAF/LMDA" on their invoice.? "FDAF" stands for "Ford Dealer Advertising Fund", and the "LMDA" stands for Lincoln Mercury Dealer Advertising.? Why can't they just disclose it as "ad fee"? I didn't pay an ad fee for my Lexus in 1998 or the Mazda Millenia in 1999.? Honda add fees are built into the invoice price, don't let them charge you extra.? Other companies choose their own cryptic acronym, like DAA (Dealer Area Advertising),? TDA (Toyota Dealer Advertising Fee), HDA, you get the picture.? If it ends with an "A", it's most likely an advertising fee. Speaking of advertising, dealers are neither grateful nor shy about plastering their name on the trunk of your shiny new car at a cost of $0 to them. You then spend the next several years advertising their dealership free of charge with your moving billboard.? You should charge them a $600 advertising fee for that.
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'Dealers try to charge $250 -$1000, but it should not be more than $250.'
To see if ANY advertising fee is legitimate, check with other BMW dealers in the area. If they all are charging an ad fee, then there is a reigonal fee that the BMW dealers are paying to BMW. If all the dealers in the area are not charging an ad fee, then there is no BMW charge to the dealers for reigonal advertising.
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