edl

Need some (urgent) advice:

Have an opportunity to buy on 04 545 (sports, cold weather, prem sound) new, untitled (leftover from last year) at 11.5K cash difference on my existing car.

Have also been working a few dealers on an 05 545 with identical specs - the best i have gotten to date is 17K cash difference.

So, I can get the 05 by paying 5.5K more.

Questions: (i) how much would you value the 8 months used up on the warrany/maintenance (the 04 warranty started in Jan 05, which is when they accepted a BMW incentive); (ii) how much would you value the year of depreciation (realize this depends on length of ownership - say over a 3-5 year period); (iii) how much confidence would you have that as Sept rolls around and the 550's are in production, the 17K will come down - to say 15K; (iv) at that price point (15K cash difference for an '05), how much does the equation change v. the 11.5K for the '04?

When you look at autotrader.com the average asking price for the all 05's (of which there are 2) is 52K, for the 04 44.5K - so the market is showing about a 7.5K cash difference (it would be more in my particular case as the 04 does not have sports or premium sound, the 05 does). This leads me to believe that the 05 is the better deal - particularly if I wait and can get the 05 cash difference down a bit (realizing there is risk in giving up the bird in hand for the 2 in the bush).

Thoughts?

Thanks!!!!

tomwid

Don't know about the rest, but isn't the "in service" date supposed to start when the car is sold brand new? So if you have an 04 545i that didn't sell till Aug 05, the warranty does NOT start until Aug. 05? So they accepted a BMW incentive, that means they had to start the warranty in Jan? Sounds fishy. I wonder if the it holds true for FL Lemon law (in service date I mean). The car is considered "new" isn't it?

If that's the case, the 04 is a much better value considering the 6k price difference, ESPECIALLY if the cars are similarly equiped, but you said the 04 didn't have sport, but the 05 does? Or maybe you're saying your CURRENT car doesn't have prem sound or sport? (I don't know what you got to trade). That to me is a big deal. The sport is a 2k+ option.

What do you drive now? How many miles? How much they giving you for your trade?

edl

Sorry! I confused things a bit: comparing an 04 to an 05 545 - identically equipped (sports, coldweather, prem sound) - currently the price difference between the 2 is 5.5K - the market (autotrader.com) shows the difference between the 2, nationwide using all cars being sold on the site at 6K (I did the wrong comparison in my first email). So, all of the above questions are whether the it is worth it to pay 5.5K more to have 1 year less depreciation, 8 months more maintenance and warranty, etc.

thanks,
edl

tomwid

I would say yes, it's worth it. Don't forget that PDC comes standard on all 05s also, so if the 04 doesn't have it, adjust $700.

Also, isn't the dealer willing to negotiate even further on the 04 model? I was thinking that since they got their incentive, they should pass that down to you. I'm sure they do not want to hold on to the 04 any longer than they have to.

allenman

Depends on your circumstances.
I own a small car company, am a long time German car nut, and always drive a very slightly used German car (BMW, Porsche, Benz). If you think you're going to get out more "quickly" (that is, you're not going to keep the car several years), then the 04 may be a better value. The 5.5 k difference in the 05 is going to evaporate sometime in the next few months as it becomes "used" also. But if you're leasing, or going to take a balloon, then it may have some more value. Also, as it regards the warranty issue, once the car is "punched", the inservice date will begin. However, most BMW's that are put into service as demos usually have the warranty start date extended by 90 days. The 04 that I'm driving had an inservice date of 1/05, but the warranty start date is shown as April 05 (dealer's wife's demo). And I don't know how much negotiating others are talking about here, but these cars with low miles and good equipment are doing mid to upper 40's at the highline auctions, depending on the color and miles. At MSRP, without incentives, there is about 9.5% pre-holdback in margin. It's going to be a loser for them, just a matter of how much they are willing to lose. It's like lots of things, on this one you are the one with the right answer depending on your circumstances.

allenman

BTW, you mgith want to re-check, in our area, average asking price on Autotrader for 04 545i is $53.941, not $44500. That may be right for 6 cyl cars, but not V8's. Lowest priced within 200 miles of Atlanta shows $48500, which should confirm the values I mentioned to you at the auction. Most of the cars that are $45ish K have no sports package and 18-22k miles.

edl

allenman, thanks - great insights - my research shows 8% markup over invoice - i have also been told that they have no "holdback" - i.e., their margin is whatever they get over invoice - Tomwid, thanks for the input - the incentive is built in - that is the 5.5K difference is the 04 price (including additional .7K for PDC and reduced for the 3.5K incentive dollars BMW gave them) v. the best price i have been able to negotiate for a similarly spec'd 05 (obviously, no incentive dollars yet). In absolute round numbers this means 51,500 for the 04 (v. 61K msrp; 56K invoice)) and 57000 for the 05 (v. 62K msrp; 57.5 invoice).