I've read many posts in these and other forums about what is considered a "good deal" on a 5 series, and the consensus seems to be somewhere around $1000~$1500 over invoice price. This runs contrary to what my dealer has said, namely that there is only about $1000 of wiggle room in the price, and that the 550s in particular are in such demand (being new, produced in lower quantites, etc.) that they don't frequently sell for under MSRP. (My local dealer even tacked on a $5k "market adjustment" to one 550 fitted with an aero kit, on top of the $3600 for the kit itself). I've looked at the pricing sheets for 5 series and the various options, and it seems that even a fully-loaded car has only about $6k of profit in it for the dealer, i.e, the delta between the invoice and the MSRP.

Now, I may be a chump, but $6k of profit on a $70k car does not seem like an unreasonable amount... less than 10%, after all. And to suggest that a dealer should settle for $1k of profit seems almost ridiculous. Obviously, I want to pay the least possible for my car, but I also want to understand what exactly the dealer gets from my sale, mostly so that I don't ask for unreasonable things and look like an idiot when I say "so and so from this forum said I shouldn't pay more than X". Is my math fuzzy here, or do dealers really sell cars for so little profit? Do they get a % of the invoice price, for instance? Or get some kind of kick-backs form BMWNA for meeting a certain number of sales? Are these $1500-over-invoice deals only made on cars that are end-of-model year? Or cars that haven't sold in a year and need to be gotten rid of? Or can I really expect a deal like this on a car that's supposedly hot and in demand?

 

Dealer profit @ MSRP is ~9%, plus there ~5% holdback (some of which is based on dealer volume, CSI ratings, etc.).

Your dealer's "wiggle room" needs some adjusting!

 

Agreed...

Have purchased three new BMW's from an East Bay dealership since 2002:

1) Utilized the Internet Sales Department

2) Was able to negotiate $1500.00 over invoice each time (in spite of MSRP and added dealer mark up)

3) Given the additional dealer incentives I feel $1500.00 over invoice is fair

Good luck!

 

Just ordered a 530i at $1400 over invoice - with BMW's current lease incentives on a 24 months lease (74% residual and .00140 money factor) it's $599/month incl. tax with no cap cost reduction, only the $625 fee, sec. deposit and 1st month's payment.

 

Dealers like to work back from MSRP. This doesn't matter because only the final total matters. IMHO, $3K under MSRP is almost always achievable unless the car is super hot or in low supply. Going lower requires patience and walking off the lot if necessary. Approx $4.5K under MSRP equates to $1.5K over invoice and, at this time of year, this could be hard to achieve. Remember, $1K or $2K savings hardly impacts the total cost of a lease. Overall, financing rates are often more important and watch the wiggle here.

Just my two cents.


CVT Benhogan

 

Each dealer is different, some are willing to offer lotsa discounts, some won't budge. My local dealer, BMW of Manhattan, wouldn't budge on 1 or 2k below MSRP. I had to try a few more dealers to get the price I wanted, and I did (invoice + $1500).

Location is also a factor. CA is supposedly the hardest place to get a good price on a car cause of the demand.

Demand of that particular car is of course also a factor. I got a good deal on my 545 a few months before the 550 came out. The 550 had no discounts when it came out.

Interestingly, I think the "invoice" pricing that we all know of isn't really a good gauge of what the dealer cost is. We'll never know what's really going on. When I was shopping for my 545 I went into the local MB dealer and asked about the E-Class. After some talks, salesman asked me how much I wanted to pay for a particular car. I said, "invoice + $1000". He was real friendly and said, "I'll do even better, I'll give it to you for invoice + $500."


I was like, "HUH, WTF?!"

That's lower than what I said! I would've been a first time buyer and he's only known me for 10min. I didn't even express that I was really interested in that MB and for his 1st round of negotiations he's willing to make only $500?

I guess either MB IS REALLY that deparate these days or invoice pricing don't mean jack.

 

Yeah, somehow I think getting $1500 over invoice on a 550 in the SF bay area is not realistic... but who knows, my (MY06) car is due to arrive at about the same time the 07 model year starts production, so perhaps that will give me some leverage to get the price down. And if lease rates were to drop on the 06's this February (entirely speculative, but plausible?), that would help my bottom line a good bit. But purchase price still matters, at least if I intend to buy the car at the end of my lease.

I briefly considered getting an M5, but here at least the dealers are tacking on $10k~$30K to the MSRP AND padding the lease rates, which I cannot stomach. I can understand not going under MSRP when a dealer only has 5-6 cars to sell for an entire year, but screwing you on your way in and your way out is just too much.

I have also found the Mercedes dealers to be much more flexible than the BMW dealers. Every time I go into a MB dealership I am innundated with sales reps, and they have offered deals I never would have had the nerve to ask for on my own... perhaps it's the quality control issues they've had this year adversely affecting sales, or a preference for bimmers in the bay area, or something else entirely.

 

That's because MB's sales are in the toilet--see Fred Meloan's MB sales reports.

 

Which dealer in the east bay did u deal with?

 

I think that $1,500 over invoice is fair. Between the holdback, incentives, and $1,500, the dealer is doing just fine. And, let's not forget the long term profit incentives of getting to service your vehicle for years, sell you your next vehicle, and service that one.....etc.

I just ordered an '07 550, and my initial offer was $500 over invoice....they pretty much laughed at me, but I was just trying to test the waters.....I was told I probably COULDN'T get the car for even $2500 over invoice....well, I walked out, and only a day later, suddenly I'm ordering the car for $1500 over invoice. And, the next day another dealer calls me to offer $1000 over invoice....but, I was committed, and happy with my deal at $1500. I would want everyone in California to know that there are reasonable deals to be made on the 07s right now....but you have to be willing to walk away if you don't get what you want. And, I agree with the original poster....I'm looking for my best deal, but I want the dealers, and more importantly, my salesman, to make some money.