So, you are CORRECT. If your lease is through BMW/MINI then your dealer will have the option to purchase the car at lease end, usually for less than the residual specified in your lease. The CURRENT MARKET, at the time of lease end determines price -- the dealer will be told by MINI what the dealer's purchase price will be. The information we have is that the dealer pays less than residual but usually more than low wholesale book, as determined by Manheim MMR or whatever data MINI Financial uses.

The dealer decides if they want to CPO the car, which adds costs for the dealer. Sometimes CPO is a good deal for the buyer, but if you know your car's history, then, if warranty is something you want, other extended service contract options may be more cost-effective than CPO. If you don't need/want CPO or any form of extended warranty, the cost will be less, of course. Lots of variables there.

My strategy would be to not get too clever. I would go into the dealer knowing what, at that point in time, MINI's like the one I want to buy, are selling for and wholesaling for in your region. CarMax is a good place to visit to get your car appraised.

The challenge is that used car prices are so dynamic and change rapidly, like week to week. If you are, say 30 days from lease end, then asking the dealer what they can do for you will result in clearer numbers as you are close enough to lease end for the dealer to get a quote from MINI and, in turn, tell you what they can do for you.

Once I had a sense of wholesale and retail pricing, I'd just contact a Sales Manager I knew and trusted, or if I didn't have that connection, I'd start developing one, so that, as lease end approached, I could have an honest and straightforward conversation regarding my options.

WE KNOW that right now MINI corporate is offering incentives to dealers to move used MINI's. WE BELIEVE those incentives will remain in play for the remainder of this year. We UNDERSTAND that dealers can earn 1% back end money IF they hit a targeted number of used MINI sales. The 1% bonus money is based on the sticker prices on new MINI's sold. So, they need to sell more used cars AS WELL AS new cars, and they still need to hit new car sales targets to get all the back end dollars available.

Expect to pay a premium if you buy any used MINI from a MINI dealer, no matter how it works out. Even if the MINI you end up buying is the MINI you are currently leasing.

Hope this helps.

 

What does it cost the dealer to certify the car as CPO? What happens? I was under the impression that MINi could sell a car as CPO so long as it was under a certain mileage and age and had no known defects. I can't imagine that the "multi point inspection" adds significant expense, given the service manager is already on salary.

Do they have to pay MINI money to go into some sort of CPO warranty expense slush fund? I can't imagine any other way for CPO to cost a dealer something.

 

Correct. A CPO is a type of warranty for which the dealer pays a fee and usually also incurs extra reconditioning costs required to meet a supposedly higher standard for such things as brakes, tire tred depth, etc.

And then there is the implied promise of a best of the best used car, for which the dealer tries to attach additional value onto the asking price.

I've had good luck with a CPO (wasn't a MINI). But the price still had to be right for me to do the deal. A used car is a used car. CPO or not, it's subject to market pricing based on supply and demand.

 

What do you do when the dealership is a "No Haggle" dealership? I've never had to deal with a dealership like that, and while it seems nice to avoid the haggle, I feel like that takes any ability to get a better deal out of my hands.

 

If you know the price you are willing to pay, simply tell them you are a No Haggle buyer and here is your price. Walk away if they won't meet you. It works both ways.

I just walked away on my last purchase attempt and found something used that satisfied me and saved me $7,000 over what I would have given MINI for new car. Win for me, lose for them.

 

FIRST CONSIDERATION: Is the dealer's 'no haggle' offer a competitive price based on your well-researched understanding of the current market?

SECOND: Where do incentives, if applicable, factor into the no haggle offer? Are they included in the no haggle price or are they subtracted from the no haggle price?

THIRD: Reflecting Moocher's point, car deals are made based on what a willing buyer will pay.

I once visited a so-called 'no haggle' dealership where their 'already discounted prices are clearly posted on every car.' As I thanked the salesperson for the information and was leaving, he said, "And if you shop another same brand dealer I hope you will give us the opportunity to match or beat any offer they give you."

 

Let’s say you wanted to buy a new Clubman JCW and you were trying to figure out how much to pay. You built a car on the MINI USA web site and went to Edmunds and TrueCar and calculated invoice and got a sense of what the cars have been selling for, but not a lot are being sold so it’s difficult to get a broad sense of the market.

So you visit the MINI USA web site, go to Shopping and Offers, enter your Zip Code, and review the lease deal offered for the Clubman JCW.

But wait! You want to purchase, not lease. Well, let’s see what is to be learned from the lease offer that maybe can be applied to a purchase.

By clicking on the offer details of the Clubman JCW lease offer, we learn that, on a car with a $37,700 MSRP, the dealer kicks in $675 and there is something called a ‘lease credit’ that’s worth $1,500. Taken together, this is a total discount of $2,175 off the $37,700 MSRP. $2,175 is about 5.8% of $37,700. So WE KNOW that MINI USA is, in effect, saying that a 5.8% discount from MSRP is what they think is a fair price. Based on this, if one were pricing out a new Clubman JCW, the MOST one should consider paying is about 94% of MSRP.

Some negotiators would want to do much better than 6% discount, but no one should pay more, based on what MINI USA is telling the public they think the cars should sell for.

The dealer may argue that the $1,500 credit is for leases only or that the same applies for the $675 dealer contribution on the lease deal. This does not change the fact that the VALUE of the car is determined by what a willing seller will take, and MINI USA will take $2,175 less than MSRP on a $37,700 MSRP Clubman JCW. So that’s the MAXIMUM price one should pay.

Okay, let’s say you build a Clubman JCW with an MSRP of more than $37,700. Fine. Either stick to 94% of MSRP (or better), or keep the $1,500 manufacturer’s incentive as a constant but adjust upward the dealer contribution as a constant percentage of the MSRP. For example, $675 is 1.8% of $37,700. Thus, for example, on a car with a $40,000 MSRP, 1.8% of $40,000 = $720. So $1,500 + $720 = $2,220 discount on a $40,000 MSRP car. This is only about a 5.5% total discount from MSRP, which is why it’s useful to calculate the percentage discount based on the example in the MINI USA original offer and then hold that discount percentage as a constant to be applied if the MSRP of the car you want is higher than the MSRP in the MINI USA offer.

To negotiate price, prior to disclosing if one plans to lease or buy, it might be wise to construct an offer based on MINI’s current programs. Though I’d be looking to get more than a 5.8% discount on a Clubman JCW! And if I were buying instead of leasing, I'd press hard for the best financing offers and I'd inquire regarding any unpublished incentives that might be lurking in the weeds.

 

The only concern I have with this approach is that I had to cough up a $2500 deposit when I ordered my Clubman. They said it was non-refundable, but I gather that was just to keep people from ordering a red car and then changing their mind when it showed up and demanding a blue car. If I can't get to a price I'd like, I realize I can leave and push to get that cash back, but it still feels like I'm starting the process with the field tilted their way...

 

Different dealers have different deposit policies. I would NEVER agree to a non-refundable deposit. And any deposit I left would be on a credit card, not a check.

The no haggle dealer I visited said that for an ordered car they required a $400 credit card deposit that was refundable.

Also, remember, there are two types of special orders. One is when the dealer uses one of their existing slots and fills that slot with your specified order. The second is when you place a special order that is in addition to existing available dealer allocated slots. It can get complicated.

Finally, when I did place my order at a different dealer than the no-haggle guy, we had agreed on all aspects of the deal with the understanding that the incentives might change as the delivery would be in a new month. Fortunately, the incentives improved. But residual, money factor, and price (including agreed upon dealer discount) were all locked in before I signed the build sheet or the credit app to get the order going. We agreed that my deal would be 'as good or better' when the car was delivered or I could walk away. No deposit was required by the dealer in my case.

 

Has any prospective buyer ever really forfeited a "non-refundable" deposit? It's hard to imagine a circumstance wherein the dealer may permanently keep a deposit when a sale is not made, regardless of the reason.

 

I think customers have some responsibility here.

If someone tells me a deposit is 'non-refundable' and I proceed to sign or shake hands on an agreement, then, even if I later renege and demand my deposit back, unless there is a clear failure to perform as promised on the other side, like I ordered a red one and they try to deliver a blue one, or I ordered it with LED's and it comes without... I'm just saying, if a dealer told me he needed $2,500 non-refundable dollars for a car I had yet to see or drive, to do a deal that was not nailed down in every way, I wouldn't agree to it, even if I were confident I could claw the deposit back if I didn't end up doing the deal. The Zen of life includes risk management and preserving options.

 

Never happened to me but I would be willing to bet it happens a lot. Many people are too timid to ask for the money back after deciding for whatever reason they can't complete purchase.

It is a move by the dealer to weed out those who love to order and not complete the deal.

 

So, anyone out there feel they are snagging decent deals on new/used MINI's?

 

I like to think I got a pretty decent deal on mine. 2014 3 door hardtop S manual I picked up in December 2016.

While I was shopping around I noticed that non-Mini dealer trade ins had more enticing starting prices than anything offered at the Mini dealerships, CPO or otherwise. Once I had narrowed down my search, there were two cars I was agonizing over. One at a Mercedes dealership, the other at Toyota. Each dealership had their own quirks as expected, but both had a fair asking price close to Blue Book and not too far above wholesale.

I went to Mercedes first and they were a pleasure to deal with. Haggled a little bit with them and got the asking price down to about a 5% markup over wholesale. The car was fresh on the lot, so it needed to go in for some detailing and TLC from the body shop. In the meantime I went to Toyota to check out the other car, which was very close in specs and asking price. I tried to negotiate with them but they wouldn’t budge. I walked away and played the waiting game because I knew this car wouldn’t move from their lot easily. Every week they dropped the asking price $200 and I would get a call from the dealer telling me what I already knew “the Mini we have is now priced at $X.” Overall the experience with this particular Toyota dealer soured me because they generally reacted to my attempts at negotiation with hostility. Anyway, this went on for about a month and the Toyota dealership ended up dropping the asking price to a sliver over wholesale before finally sending it out to auction. At this point you can probably guess I ended up buying the car on the Mercedes lot. It had a few features the other one didn’t which weren’t exactly deal breakers, but the way I was treated at Mercedes was so much better that it had a surprising impact on my final decision of which car to buy.

 

Great story. Great outcome. Your experience validates what Minnie the Moocher advocates -- late model MINI's from non-MINI dealers are often better values. Your patience was clearly rewarded.

 

Before I bought mine from Audi dealer I was looking at a barely used Justa 2015 and the price on that dropped about $5K from original asking price, sales-manger told me it was going off to auction if I didn't want it. Then they jacked the price back up a few thousand and I stopped watching. Way too many games going on, also a Toyota dealer.

 

Several posts on this thread have touched upon the obvious: The buyer brings the money to the deal. Without the buyer, there is no deal.

Decades and decades of sales experience have resulted in development of sales systems designed to make the buyer feel disempowered, anxious, fatigued, and, grateful if the “sales manager approves the deal.”

WAIT!!

It’s the customer’s approval of the deal that is the lynchpin. Until the customer says yes and signs on the dotted line, there ain’t no deal!

So, those of you who have recently purchased or leased a new car, or bought real estate or expensive furniture, take a moment to reflect upon the entire process of your deals. Stop and recall all the subtle ways others attempted to exert influence, or even control, over the process.

“Wait here a minute while I run this past my manager.”

“If you qualify.”

“I can’t promise this deal will fly until we get approval.”

“I’ve never seen them say yes to a deal this low but we can sure try.”

“It would be better if you could offer to put more money down.”

“The sticking point is the low value of your trade.”

ALL of these sorts of comments, while tinged with honesty, are designed to engender a disempowered feeling in the customer.

Zen out. Chill. You don’t need the deal as much as the dealer needs the deal. There are thousands of good cars, new and used, for sale every day.

And, most important of all, the customer is giving the dealer the opportunity to sell a car. What the dealer does with that opportunity is up to the dealer. The customer can always choose to pay more, but that is a choice the customer can consider after the dealer has the opportunity to meet the best terms acceptable to the customer.

My consistent position has been that a customer needs to know enough to be able to justify the numbers. If a customer wants 10 grand for his trade, there needs to be some credible evidence in the marketplace to support that price. If the customer offers to buy a car for invoice less rebates, then the customer needs to know… BUT WAIT! There are all kinds of things going on outside of the view of the customer. EVEN THE SALESPERSON MAY NOT KNOW all of the levers the dealer can pull to close a deal. Back end money, stair step programs, special manufacturer to dealer incentives, closeness to bonus targets, staleness of inventory – any of these can influence approval of an outrageous deal – even a deal that would seem unreasonable to ask for.

But how can one know what is unreasonable? If the salesperson doesn’t have ALL the information, and the customer doesn’t have all the information, then a comment from a salesperson like, “Your offer has no basis in reality. I’ve never seen a car like this go for the low number you’re proposing” only has validity if it is tested.

Or, on an ordered car, you wait 8 ~ 12 weeks, track the ship’s daily progress to the port, and then realize you don’t even know all the details of the deal because the sales team cleverly kept you all focused on ordering and getting excited about your custom built just for you car. Then, when the car arrives, THEY KNOW how much emotion and time you’ve invested and how unwilling you will be to walk away once you lay eyes on the baby you’ve waited so long to see.

With the wise buyer of an ordered MINI, every detail of the deal that could be nailed down was nailed down BEFORE the build sheet was approved. It was, IN WRITING, that the deal at time of delivery would be AS GOOD OR BETTER than what was agreed to when the order was placed and the deal was subject to test driving the ordered car to confirm customer approval of the car when it finally arrived. The message to the dealer was that the customer’s commitment was tenuous, and the deal was always in jeopardy until the dealer satisfied all the customer’s requirements. Because the wise buyer understands that it is the buyer who controls the deal. Until the buyer brings the money and signs on the dotted line, their ain’t no deal! Forget all this nonsense about non-refundable deposits or talking about deal terms once the ordered car arrives.

Cast your bread upon the waters and see what happens. And remember, no matter how well the customer is treated, it’s a conspiracy against the person who brings the money to the deal.

 

Why does it matter to a dealer if you are planning to lease or buy your new MINI?

First of all, one’s credit status impacts lease deals and special financing a lot. Only top tier credit scores qualify for the best factory lease offers, and only strong credit qualifies buyers for the best below-market APR financing deals. Usually, certain nice incentives are attached only if a buyer qualifies for the best lease or APR financing.

This can impact the final price negotiations because, if a customer with excellent credit is aware of the best current lease and financing offers, an honest dealer will need to offer those excellent terms, thus losing the opportunity to pad profits by charging a higher rate and keeping some of that higher rate as profit in the deal. If the dealer doesn’t have any extra “back end” financing profit to figure into a deal, then the dealer may hesitate to offer the deepest discount on a car.

However, if the dealer is acting in your best interests, then knowing if you plan to buy or lease will allow an honest dealer to offer you the best incentive package and it might lower the price the dealer can offer.

For example, if the manufacturer is offering dealers special “trunk” incentives on leases which are not publicized, then maybe the dealer can reduce the capitalized cost on a lease by another $500 or $1,000, thus giving you a lower lease payment, whereas, if that “trunk” money is not being offered on purchases, the dealer won’t have the extra $500 or $1,000 to play with on a purchase deal.

Conversely, if hidden incentive money is available for purchases only, the dealer might go a bit lower on selling price if there’s that extra incentive money available to sweeten the deal.

While the best car deals are often made when a customer lays all relevant cards on the table so the dealer can have the opportunity to put together a great offer, it is good to be open to all options you are willing to consider and, when asked if you’re buying or leasing, it is reasonable to respond by saying you are willing to consider all options and will decide based on the best available deal. What “best available deal” means to you depends on what you value and what you need, and your individual circumstances.

Do you want to customize and modify your car? Leasing probably isn’t the best option.

Do you drive more than 15,000 miles per year? Leasing might work for you but you need to be very careful about how high mileage leases effect residual values and other lease costs.

Do you like to pay off your car in a few years, drive for a couple of more years without payments, and then use any remaining value of your car as the down payment or lease drive-off payment on your next car? Leasing definitely isn’t the best option.

If you drive 15,000 miles or less per year, like driving a new car in warranty all the time, love having the latest style and technology, have strong credit, don’t mind always having a monthly payment, are okay if you experience a major change in your circumstances that would make being locked into a lease for a few years inconvenient, and if you like your vehicle with lots of pricey options and you are a good deal negotiator, leasing is probably a good way to go for you.

If you like to drive a car until the wheels fall off, you are a buyer.

Thus, the answer to a salesperson when they ask, “Are you planning on leasing or buying?” is to say, “I’m willing to consider both options, depending on the available deals. Which option will result in the lowest possible selling price of this car?” And if a salesperson says, “The selling price doesn’t really matter on a lease,” RUN from that salesperson and find someone who will be honest with you, because the final negotiated selling price of the car DOES indeed impact the amount you will pay, whether you’re buying or leasing,

Which is why, buy or lease, the focus always needs to be on the final, complete, including all fees, out-the-door selling price (or capitalized cost in the case of a lease).

 

So what happens at the end of the lease? Do you have the choice of either paying off the agreed residual value and keeping (buying) the car OR simply returning the car to the lessor?

If you compare lease terms from two or more dealers, even though one might have a lower payment, it might be due to a higher "residual value" allowance - and not due to a lower capitalized cost or better money rate.

What's the smartest way to evaluate the residual value part of the lease terms?

 

Good questions.

It is usually unwise to lease a car with the plan to purchase it at lease end. Occasionally it can work out, but rarely does it make sense.

Let's assume we're talking about MINI leases written through BMW/MINI Financial Services.

Residuals are set by the manufacturer -- dealers can't modify them. The residual is a percentage of the TOTAL MSRP, not the final negotiated price.

Residuals are based on marketing and mileage -- the marketing part is an aspect of what are called 'subvented' leases. This means the manufacturer is adjusting the residual upward and/or providing a below-market money factor (finance rate) in order to make the lease more attractive.

So the problem is, 'inflated' residuals often result in higher-than-market residual values. You can purchase the car at lease end (or any time during the term of the lease).

At lease end, the residual value printed in the original lease agreement contract is the MAXIMUM price you would pay -- the contract basically says you can buy the car at lease end for the residual value amount. You can buy the car during the lease period for a calculated amount available from MINI Financial Services -- they calculate the payoff based on residual plus any unpaid depreciation. At lease end or during the lease period, purchases are rarely good deals.

Now, when a car is turned in to a dealer at lease end, there is an inspection conducted and there may be charges for excessive wear and tear. Wheel rash, worn tires, many types of dings and scratches, serious body damage, cracked windshield, torn upholstery -- any of these can result in charges to the leasee.

Also, there are excessive mileage penalties which can be handled any number of ways -- the leasee can pay for the excess miles at a pre-determined rate specified in the lease, or, during the lease term, extra miles can be purchased at what is usually a lower rate/mile than is charged at lease end.

The Money Factor, which is the lease rate (the rent on the money), is a range set by the manufacturer. HOWEVER, dealers can bump the rate up within a range, and, they often try to do this. That is why, as discussed in previous posts on this thread, if you plan on leasing, SCHOOL YOURSELF on the ins and outs of how leases are constructed and learn how to calculate money factors and residuals and cap costs. And check the national offers, reading the fine print to get the info you need to calculate the best money rate on offer, and then compare that rate to what the dealer offers. Credit scores impact money factors. Top Tier credit is required to get the best special rate.

Lease contracts are NOT anywhere near as transparent as regular purchase contracts. Leases do not usually disclose money factors.

Now, here's the inside scoop. When a leasee turns in a car at lease end, if the receiving dealer wants to buy the lease return, they contact MINI USA and are quoted a purchase price that, we are given to understand, IS LESS THAN THE RESIDUAL printed in the original lease contract. SO, if a leasee loves his/her MINI and wants to buy it, THE SELLING PRICE CAN AND SHOULD BE NEGOTIATED and it should be an amount BELOW the residual printed in the original lease contract.

If a leasee is done with the car at lease end, and it is returned clean and in compliance with lease return requirements (which the MINI USA web site spells out pretty clearly), then there is a 'lease return fee' of $350 bucks which is hard to negotiate away, unless, of course, the leasee is wanting to lease another MINI.

Money factors can be negotiated. Cap cost, of course, is negotiated just as the selling price of a purchase is negotiated. But residuals are set.

About the only time purchasing at lease end makes sense is if one has modded the car, or has put so few miles on that there's so much good life left in the car that it's worth close to the residual amount.

And then there's the question of extending the warranty if the car is purchased at lease end -- the dealer can do a CPO, which costs the dealer some money, or an extended warranty can be negotiated as part of a purchase.

BOTTOM LINE. If a person takes loving care of their MINI, and doesn't drive more than 15,000 miles/year, and has excellent credit, and doesn't mind always having a payment, leasing is an attractive option for driving the newest model with no warranty or repair hassles. You can get more car for your payment and refresh your ride every three years. And there are many possible tax advantaged ways to offset the lease cost if you have your own business.

As Minnie the Moocher has pointed out and others have demonstrated, buying a late model, low mileage, well-loved, gently used MINI is usually a better value proposition because there's so much front end depreciation -- depreciation that the first owner ate for the benefit of the second owner.

See Post #7 on this thread for more details on leasing.

 

I just purchased a new 2017 JCW (which I pick up in 2 days) and the deal went reasonably smooth. I bought out of state so I am going to address this method here. I started by surfing on AutoTrader.com to see which dealers were discounting within 200 miles on the model I wanted. (Don't be afraid to buy out of state as it's not that difficult.) I have now purchased 3 Mini Coopers (all out of state) and none at my local Brentwood (Nashville) dealership as they will not deal (owned by Sonic). I think getting a good to great deal depends on how motivated the seller is and how patient and courteous you are. You can sense the willingness of a dealer to negotiate by talking (throwing a few figures around) with a salesperson, shooting the s**t so to speak. A few pointers:

1-Be informed. You'll get a feel for what prices are being asked for the model you seek by visiting different dealer websites. Know all your figures! If you find "your vehicle", and the dealer is offering what you feel is a decent discount, click "Get e-price". You'll hear back. Ask the sales person for all the extra fees dealer charges. Bogus charges can negate a good price in a hurry. Make sure the discount they offer is NOT off of a jacked up MSRP (Dealer adds like "Market Adjusted Value","Sealant" etc.) Get a copy of the window sticker emailed to you! If they seem legit, tell the sales person you'd like to submit a proposal. Write your deal proposal down with all relevant figures. Call your county clerk and get local sales tax rates and find out if the state where you are buying has a reciprocal sales tax arrangement with your home state. If so, you can pay your sales tax at purchase and know that they are not over charging you.

2-If you have a trade, look up the KBB and NADA values. Don't fall for the auction price trick because a MINI dealer loves to sell used MINI's, especially if yours is well cared for. A trade-in may save you sales taxes as in many states you only pay tax on the difference of the new car minus the trade-in. So for example, you wanted $17,000 for your car privately, and the dealer offers you $15,700, its virtually a wash because taxes saved would be around $1,200 + the cost of the ad which adds up to around $17,000. (Our tax on cars here is 7%)

3-Since the dealer will counter, start with a figure that is biased in your favor, but remember to be reasonable. Don't be afraid to walk away!!! With MINI's I consider a decent discount to be in the 3-4,000 range depending on trim. Manuals will sell a bit cheaper. You may be able to negotiate reduction in fees such as DOC fee if dealer is firm on his vehicle selling price. Or, negotiate for extras like floor mats, mirror covers etc.

4-When negotiating by phone, you will find that some dealers will cut to the chase quicker knowing that you are coming a good distance. Mine gave me his bottom price w/o haggling. I wanted a bit more in the deal and since he didn't want to go lower on price, I added some perks (Like add free satellite radio). If you are trading take 20-25 high resolution shots of your car. I make mine look professional and have the car well detailed. A good service record also helps. I was able to get KBB "Excellent" trade-in value which with sales taxes saved, added up to private party selling price. Saved me time too.

5-If you reach a happy median and decide to buy, get a signed purchase purchase order listing all charges (which you already know!). Have it signed by your salesman and his boss/sales manager and then secure the deal with a credit card deposit. If MINI has special financial offers available, make sure you get pre-approved so that the rate is listed in the deal as well. If there are no financing incentives from MINI, get rates from your bank and offer the dealer the chance to beat it.

6-Happy hunting, and remember, if you find a car with EXACTLY the color and equipment you want, it might be worth paying a few more bucks to snag it. After all, your time is worth money.

 

So, ToyCar did very, very well and got a great deal on the right, great car. Congrats!!

Now, here I am plagiarizing comments from a seasoned BMW Client Adviser who knows his stuff regarding buying used cars, out of state:

"Here's my tips, based on my current position as Internet and Portfolio Sales Manager. These are based on the assumption that you would be an out of state buyer.

Ask to have the CPO inspection sheet, the Statement of Certification, an Autocheck and CarFax (most just have CarFax online, and some make you pay for them) and lastly a printout of the Repair Order showing what was actually done. AutoCheck is competition for CarFax, and sometimes things show up on Autocheck that aren't on CarFax, and vice versa.

Know how many days this has been in stock. If it's been out there for 5 days, don't expect a big discount. Dealers will want to get the most gross with a sale to a local client in the first couple weeks.

Conversely and illogically a car that has been in stock say 100 days likely has been price reduced and there will be less discounting available. Remember, the trade in or lease buyout cost was 100 days ago, as well as the costs to certify. 100 days later the market value has dropped, but the costs haven't, so the dealer is being pinched. They might eat a loss.

The right age is 3-4 weeks. Old enough to start needing to move, young enough to have some negotiating room.

3rd Party Inspection: hate 'em. For three reasons: we've already done that and can document it, 3rd party people will ALWAYS find something wrong, as they don't have the CPO inspection parameters, and we hate taking a car off the lot for a day or half day. The CPO vehicle likely is still under the new vehicle warranty anyway.

If you insist it needs to be done, please expect that you will pay for it and arrange it.

I suggest instead that you find an appraiser or lease end inspection company or anyone you can find to do a visual inspection. It's the dents, dings and scratches that don't show up in the online photos that will grind at you.

Price: be prepared to justify your offer. My first question is always how did you determine that price? What were your sources. If you just say KBB, I'm going to come back with KBB, NADA, Edmunds, and a list of cars in the market. You should know those as well.

And please book it out correctly. Don't skip options you know are on the car. If you're unsure, ask the CA to send you the Options List. Nothing worse than getting an offer and the source doesn't include Navigation or MSport or another package that can drive up price. And always book them out as CPO: your values will be $2k lower than what they should be if you don't.

Trade ins. Again, assuming this is an out of state transaction, I would ask right up front if they take trades on out of state deals when you are not doing the transaction on-site. We, and many other dealers, don't take out of state trade ins unless they are driving it in. So might as well find out before you go too far in the process.

Don't hold off on mentioning the trade from a negotiation perspective. There's a finite pool of margin in the transaction. If you've got the dealer to agree to a near wholesale deal, you will end up with a trade value that's near wholesale as well. There no margin to over-allow the value to you. If the dealer says the trade in is worth $10k to them to recondition it and sell it, but you need $12k to agree to a deal, that $2k comes from profit in the deal. If there's none left, then there's not much the dealer can do."

 

Buyers tips from a BMW sales guy, I would have spit my coffee out had I not finished drinking it. This advice is based upon letting the dealer have a profit on a used car he bought wrong or can't sell. At some point the dealer is going to have to take a "loss" or auction it at a "loss". I'd rather be the guy buying the loser.

"The right age is 3-4 weeks. Old enough to start needing to move, young enough to have some negotiating room." So at 4+ weeks he is saying the dealer has reached the bottom line and at that point pay the price or the car will evaporate into thin air? No at some point the dealer will take what he can get even if it is a loser.

This is all great advice if you are on the dealers side.

 

Glad you're still following the thread, Moocher.

I would encourage you to read what I quoted from the BMW sales guy again very carefully. I think you will find some good insights.

He is saying, I think, that the 3 ~ 4 week sweet spot is where the price starts to soften on a used car -- when he talks about room for negotiation, I took that to mean the dealer is likely to be more flexible whereas when the car is fresh on the lot, all the dealer is thinking about is all the money he spent getting the car ready -- he's hoping to get it all and a bunch more, whereas a few weeks into it, he's more likely thinking he's got money tied up in a unit that isn't moving -- time to cut his losses and try something else. Dealers want to move metal. And, in the case of MINI, right now there are incentives for moving used MINI's.

The MAIN reason I reprinted the quote from the BMW guy is, as Patton famously said about Rommel, "I read your book!" Patton understood the thinking of the enemy, and triumphed. So, Moocher, don't spit out your coffee. Sip it and smile knowingly, because the more customers understand about dealers' thinking, the better the opportunities for good deals.