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How to Buy a New Mini -- The Art of the Deal

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How to Buy a New Mini -- The Art of the Deal

  #151  
Old 02-22-2017, 02:42 PM
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I enjoyed this thread, I am looking at trading in my 2009 Clubman S for something with power in all the wheels. I bought the 2009 in California, but now live in Minnesota. An All4 version of the Clubman seems like a good reason to let my 2009 go. :/
 
  #152  
Old 02-23-2017, 03:23 PM
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All You Can Do is Ask

Okay, so MINI USA is messing with the rules and playing a new game. Instead of simply posting the deals on the MINI USA web site and listing in the small print all the details necessary to understand the various offers, the site directs you to your local dealer.

When you get to the local dealer’s web site you may see a few “special offers” on a few selected cars or you may see something like “New Cooper for $299 month with $0 drive off. See dealer for details.” The “details” you need to fully understand the deal are rarely given in the ad.

If you call the dealer to inquire about the advertised special, be prepared to talk with more than one person before you learn what you need to know about the offer. And don’t be shocked, or deterred, if you encounter resistance over the phone. All you can do is ask!

Customer: I’m calling about the $299/month with zero drive off offer on a Cooper you are showing on your web site. Are you the right person for me to talk with to get information about the offer?

Dealer: We have three at that price. Great cars. When can you come in and take a look?

Customer: (silently counting to three before speaking) Are you the person who can help me understand the details of the offer?

Dealer: What would you like to know? By the way, my name’s Bob, what yours?

Customer: Thanks for taking my call, Bob. In response to your first question, I’d like to know all the details of the offer. Specifically, what is the money factor? What is the MSRP? What is the final capitalized cost? How are the required drive-off costs folded into the deal including the lease fee, the license tags, and the sales tax?

Dealer: Wow, sounds like you’re serious. I’d love to show you the cars and go over all the numbers.

Customer: (interrupting) Now, Bob. You asked me what I’d like to know. I just told you and instead of giving me the information I requested, you said “sounds like you’re serious.” Are you the best person to answer my questions and arrange to sell me a new MINI or is there someone else at your dealership I should be talking with to get the information I need to decide if it’s worth a trip in to buy a car from you today?

Dealer: To be honest, it’s difficult to do this over the phone.

Customer (interrupting) To be honest, I think my questions are simple and easy. Let’s try again. I need to know what is the money factor? What is the MSRP? What is the final capitalized cost? How are the required drive-off costs folded into the deal including the lease fee, the license tags, and the sales tax? Can you tell me the answers, please?



If Bob dodges the questions, the customer can ask to speak to the manager. Or, the customer can call MINI USA and say:

Customer: I’m a very frustrated MINI customer and I need your help. I visited the MINI USA web site and when I clicked to look at the Special Offers, I was directed to my local dealer. I’m trying to learn the details about the deals my local dealer is offering. I contacted my local dealer and I asked for the details of the offer they are advertising and they wouldn’t tell me. I have some questions I need to have answered before I visit the dealer. The dealer wouldn’t answer my questions so I NEED YOUR HELP. I need to understand the money factor, the MSRP, the final capitalized cost and how the drive offs are handled on the zero drive off deal. I need you to contact my local dealer for me and arrange for me to have a conversation with someone there who will answer my questions. Or, perhaps, you can answer my questions.


Okay, nobody wants to do all that. And the dealer and MINI USA are counting on this. So, if you can’t be bothered to play phone footsie with a MINI salesperson and if chasing a possible dead end at MINI USA isn’t your idea of a fun way to spend an afternoon, then go on in to the dealer and do the work there.

Strategy #1. Call the dealer. When the person you talk with says you need to come in, make an appointment. Go to the dealer at the agreed time and ask to see the specific salesperson you agreed to meet. Drive some cars. If you find one you like, make an offer at dead invoice, minus any rebates or incentives. Calculate estimated dead invoice (MSRP - $850) x .92 + $850 = estimated invoice. NOT LIKELY YOU WILL BUY A MINI AT DEAD INVOICE MINUS REBATES/INCENTIVES, but it’s a great place to start. As Zillon has advised in a recent post, if the dealer will sell you a MINI at 5% below MSRP before incentives, you’re doing very well. Others have reported doing much better than 5% below MSRP on specific cars that the dealer really wanted to move off the lot.

Strategy #2. Same as #1, except you special order a car if you can’t find just what you want at the dealer. If you special order, ask for the same pricing as the best deal (relative to invoice, drive offs, etc) they are offering on a car they have in stock, remembering, of course, that on an ordered car the dealer cannot carry over any factory incentives that may expire prior to your ordered car’s arrival. That’s the chance one takes with an ordered car. The incentives might get better or they might get worse by the time your ordered car arrives. But the dealer’s offer will hold, and money factors can be locked as well, with the option to take a lower money factor if one is available at the time of delivery.

With either strategy, don’t be timid or afraid to ask for a killer deal. THE IMPORTANT THING TO REMEMBER IS TO KEEP THE DEALER DISCOUNT SEPARATE FROM ANY AVAILABLE FACTORY INCENTIVES OR REBATES. If the dealer says he’ll go $1,000 over true invoice and he will show you the actual invoice, and there’s $1,000 factory cash available, then $1,000 over invoice MINUS the $1,000 factory cash nets you out at dead invoice plus tax, etc. In many instances, the final selling price, including incentives, has been well below invoice, with taxes and fees then added to the below-invoice price.

All you can do is ask!! Let them tell you “no.” To which you can respond with, “Well, I’m set to do a deal at the price I offered. How close can you get to my numbers?”

No matter how you approach it, if getting the best deal you can on a MINI is important to you, and MINI USA is trying to hide the numbers underpinning the deals on offer, you’re gonna have to work a little harder.

So, how do you know what a fair offer is if you don’t know what sort of manufacturer-to-dealer cash is hiding “in the trunk?” ASK!!!! And don’t move forward into the details of a deal until you:
1) know what the numbers are and;
2) have the time to analyze the numbers so you understand what they all mean.

It’s okay to say, “Let me take a little while to plug these numbers into my computer so I can figure out how a deal I can say yes to might work.”

We all remember the days when MINIs were scarce and dealers insisted on full MSRP and they packed the cars with extras at full freight. Those days are behind us. Right now many manufacturers are putting more incentives into their cars than they did this time last year. MINI is trying to hold the line wherever they can. As purchasers, we have to work a little harder to find where the line is.

Once again, all you can do is ask, and ask, and ask until somebody tells you the truth so you can decide if the value is there for you to make the deal you want to make.

AND HERE’S HOW YOU ASK.
Direct eye contact.
Nothing ambivalent or apologetic in your demeanor or manner.
Just like asking a waiter for a refill of your water, politely act like you are entitled to whatever it is you are requesting.
No mumbling or staring at your hands or the floor.
No saying, “Well that was kinda more than I was thinking. Can you do something to make that payment come down?”

Of course they can do something. If they see you staring at your feet, they will make that payment come down by offering you a 66 month term instead of 60 months.

So, just make direct eye contact, act like you deserve what you’re asking for, and ask for it, as in:
“I’m ready to do a deal right now. Here’s what I will say yes to. What can you do for me to make this deal happen now?”

When the dealer says, “I can’t do that,” continue making direct eye contact and say, “I understand this is a thin deal. Let’s see how much closer to what I want you can get. We’re just not there yet.” Then get quiet and see what happens. If the dealer won’t move, and you are DEAD CERTAIN there is profit left in the deal you want, say, “I’m really sorry we’re stuck on the numbers. You’ve got all my contact information. Why don’t you rework this deal and see what you can do. No sense in my spending any more time on this now. Just let me know when your numbers get better and I’ll BE BACK to sign the papers if you can get close to where I want to be.”

If the dealer is silly enough to say, “Well, how close do I need to get?,” count to three silently, look the dealer in the eye, and say, “You’ve got the numbers I’ve already told you I’ll say yes to right now. Why don’t you see how close you can get and we’ll see how those numbers pencil out for me. You’ve got a deal at my numbers. I really don’t know what else to tell you. Why don’t I go grab a cup of coffee while you see what you can do.” Then get up and get out of the office and let the dealer make the next move. Or, if haggling over money isn’t your thing and the dealer’s offer is anything decent below MSRP, and you trust the numbers, just take the deal as offered and enjoy the ride.

This is not rocket science but it does require confidence and mental discipline, and the deal must be doable in terms of trade-in value, credit worthiness, and some profit for the dealer, however thin and even if the profit is all on the “back end.”

For those who say it doesn’t work, I will remind you of the 2017 Super Bowl. Nobody could tell Tom Brady or Bill Belichick that the game couldn’t be won. So they went out in the second half and won it.
 

Last edited by 2017All4; 02-23-2017 at 03:39 PM.
  #153  
Old 02-23-2017, 05:45 PM
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Who Cares About All the Numbers?

Well, let’s look at an advertised deal:

2017 MINI Cooper Hardtop closed end lease for $249/month + tax for 36 months on approved tier 1 credit. $0 due at signing which includes 1st month’s payment, $0 security deposit, tax, license, and fees.

How can a customer know if this is a good deal?
The Customer needs to know:

What is the MSRP?
How are the $925 lease fee, the tax & license fees, any other fees, and the 1st month’s payment being covered?
What is the base capitalized cost (agreed selling price) that is used to calculate this lease (MSRP or discounted from MSRP)?
Are any other costs or fees being added to the capitalized cost?
What is the residual percentage?
What is the money factor?

What if this deal is based on a capitalized cost based on a full MSRP selling price? If the lease fee, tax, and license, and first month’s payment are covered by a factory to dealer incentive, this might be close to a decent deal, which can be made much, much better if, instead of MSRP being used for the capitalized cost, the car is discounted, thus lowering the capitalized cost, the monthly payment will come down.

For example, if the car in the $249 deal is not discounted, that $249 plus tax deal might become a $225 plus tax deal if the agreed selling price is discounted. $249-$225=$24. And, on a 36 month lease, $24 x 36months = $864 plus tax. That’s a significant savings.

If the offer includes a special subvented (manufacturer subsidized) money factor, can that subvented money factor be used on the lease of another car that isn’t one of the cars on special?

Or, if instead of a low mileage, 36 month lease, a customer wishes to purchase the car, what, if any, hidden factory money is available to sweeten the deal? If, for example, the dealer offers the customer a $2,000 discount from MSRP, is that discount coming from the dealer or is the dealer passing on factory cash and, thus, basically getting the same profit as an MSRP deal?

Who cares? Well, if a customer negotiates a $1,000 discount from MSRP and, ON TOP OF THAT, benefits from factory-to-dealer cash, the final selling price of the car will be further reduced.

It's a shell game called “who keeps the hidden cash?”

That’s why we care about ALL the numbers.
 
  #154  
Old 02-24-2017, 04:24 PM
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Real Deal

Okay, hypothetical deals aside, a PM requested evidence of a real deal the OP has actually done on a MINI.

Here it is:

New MINI F54 Clubman S ALL 4, special ordered August, 2016, delivered October, 2016

Full MSRP including $850 delivery charge $42,680 (including wheel locks added at VDC)

Dealer Discount from MSRP $3,221 (7.55% discount from full MSRP)

MINI USA October rebate $2,000

TOTAL DISCOUNTS/OFFSETS from MSRP $5,221 (12.2% discount from full MSRP)

Dealer Doc Fee $80

Dealer DMV Wire Fee $29

MINIUSA Lease Fee $925

DMV $345

Sales Tax on Lease Fee $74

California Tire Fee $7

Lease Money Factor on 36 month lease .00132 (3.168% interest rate)

Residual on 36 month/10,000 mile per year lease 65%

Security Deposit $0

Free MINI folding sunshade with storage pouch ($65 MSRP)

Free carwashes at the dealer, as often as I want for as long as I own the car

Free loaner for any service department appointment

Free nitrogen fill for tires

On the above deal, the first time we set foot on the dealer’s lot was to take delivery of the car. The order, price negotiation and credit application were all done over the internet. There was no deposit at the time of the order and no money changed hands until delivery. The only signatures required to start the process were on the credit application and on a printout of the VIR build sheet confirming the car had been ordered to our specifications.

I met our MA and her manager the day we took delivery of the car.
 
  #155  
Old 03-02-2017, 10:15 AM
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MINI Brand Sales Not Having a Happy Winter in America:

For February, MINI USA reported 2,154 automobiles sold, a decrease of 24.1 percent from the 2,839 sold in the same month a year ago. Year-to-date, MINI USA reported a total of 5,264 automobiles sold, a decrease of 13.4 percent from 6,077 automobiles sold in the first two months of 2016.

MINI Pre-Owned Vehicles
•In February, MINI Certified Pre-Owned sold 873 vehicles, a decrease of 16.5 percent from February 2016.
•Total MINI Pre-Owned sales set a February record with 2,413 vehicles in February 2017, an increase of 8.2 percent from February 2016.
•Total MINI Pre-Owned sales year-to-date were 4,600, a 12.6 percent increase from the first two months of 2016.
 
  #156  
Old 03-02-2017, 12:37 PM
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So they had a bad Feb. for new cars, January about same as last year and basically made up for it in UsedMobiles. That's not all bad right?
 
  #157  
Old 03-02-2017, 04:33 PM
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Originally Posted by TheBigNewt View Post
So they had a bad Feb. for new cars, January about same as last year and basically made up for it in UsedMobiles. That's not all bad right?
It is interesting. BMW/MINI is in the business of making and selling new cars, so that part isn't good news.

Dealers make money selling and servicing cars. So they are happy if they're selling something, and used often nets more gross than new. So the February used numbers may be good news of sorts for dealers.

Interesting that CPO cars fell off a good bit, and those are the cream puff cars with better prep and warranties yet they are also more expensive than non-CPO cars.

This all suggests to me that people still want MINIs, albeit not at the high level of demand seen in prior years. Either folks purchasing MINIs want project cars or lower-cost cars they can mod. Which kind of makes sense. Also, teenage buyers and first time buyers wanting a fun, unique car could enter MINIworld for a more reasonable price with a non-CPO used MINI.

And, finally, there are lots of folks who have owned MINIs before and for whatever reason want to get back in with a non-current model. Maybe they know the older cars well and want one, or nostalgia, or whatever.

But new car sales drive the brand into the future. And they are down.

As Zillon said, the new Countryman can't arrive soon enough. Which says the brand is seeking new motorers who might be drawn to MINI for reasons other than those which drew the first few waves of enthusiasts over the past decade and a half.
 

Last edited by 2017All4; 03-05-2017 at 03:52 PM.
  #158  
Old 03-03-2017, 09:49 AM
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Here's the detail from BMW USA on February sales:


 
  #159  
Old 03-05-2017, 11:10 AM
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Originally Posted by 2017All4 View Post
It is interesting. BMW/MINI is in the business of making and selling new cars, so that part isn't good news.

Dealers make money selling and servicing cars. So they are happy if they're selling something, and used often nets more gross than new. So the February used numbers may be good news of sorts for dealers.

Interesting that CPO cars fell off a good bit, and those are the cream puff cars with better prep and warranties yet they are also more expensive than non-CPO cars.

This all suggests to me that people still want MINIs, albeit not at the high level of demand seen in prior years. Either folks purchasing MINIs want project cars or lower-cost cars they can mod. Which kind of makes sense. Also, teenage buyers and first time buyers wanting a fun, unique car could enter MINIworld for a more reasonable price with a non-CPO used MINI.

And, finally, there are lots of folks who have owned MINIs before and for whatever reason want to get back in with a non-current model. Maybe they know the older cars well and want one, or nostalgia, or whatever.

But new car sales drive the brand into the future. And they are down.

As Zillion said, the new Countryman can't arrive soon enough. Which says the brand is seeking new motorers who might be drawn to MINI for reasons other than those which drew the first few waves of enthusiasts over the past decade and a half.
February in general was a bad month for the industry - MINI wasn't the only brand down.

The next few months will be the real tell.
 
  #160  
Old 03-05-2017, 03:54 PM
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They Can’t Give Everyone Invoice

We’ve all heard it. “If we sold cars to everyone at invoice we’d be broke.”

This thread isn’t for “everyone.” This thread will resonate with the small percentage of car buyers who have excellent credit and don’t mind waiting for the right moment and are willing to take the time and extra effort required to get the best possible deal and pricing on their next car purchase.

For that small percentage, following the steps, holding firm on a thin but fair offer, and avoiding the traps and snares of overpriced add-ons, rate bumps, and hidden fees, is work worth doing.

If you are willing to walk away if the thin deal you want, ask for, and tell the dealer you are ready to do, can’t happen the first time you try, the deal you finally make on that car, or, if not that one, another one, on another day and maybe at a different dealer, will be better. If you have to have a specific car on a specific day then you will probably pay more.

For everyone, determining dead invoice is as easy as a visit to the web sites that offer this information or as easy as asking the dealer to show the invoice. Once you have the invoice number, one question will get you a decent deal: How close to invoice can you get so I can say yes to buying this car today?

When you get the dealer’s magic number, if it works for you all you need to do is clarify: Is your offer before incentives or does it include incentives?

If it includes incentives: I need to understand which part of this discount is your discount and which part is the incentives.

For those who don’t have the interest, or the time, or the inclination, or the mind set required to get into the Total Zen of the Deal, if the deal you are offered makes sense and seems fair enough to you: Okay. Print out the deal for me showing ALL the itemized costs, the interest rate (or lease rate & residual percentage), give me a few minutes to go over your numbers, and if it all makes sense to me, I’m ready to do the deal right now.

For those who insist that grinders have no respect for the realities of the modern car business, I say that I have more respect than most of your customers. I will always be polite – firm but polite and maybe even entertaining. I am willing to take the time to do my independent research and put myself together so you don’t have to. I won’t waste one minute of your time hemming and hawing or asking a million questions about simple things I didn’t bother to learn about myself. My check will be good. And, if you hold up your end of the bargain and don’t dodge your responsibility to deliver a fully-prepped and properly detailed car at the agreed-upon terms in a fast and efficient manner, I’ll give you top ratings on the survey and I’ll tell my friends to consider buying from you.

When I show up to buy a car, my mind set is I’m giving the dealer the opportunity to sell me a car. What the dealer does with that opportunity is not up to me. If the dealer can’t do the deal or just plain old doesn’t want to, that’s not up to me. If the dealer gives me new, honest information that causes me to rethink the numbers I was using to structure my proposed deal, and, as a result of this new information, I might need to pay more than I planned, I will be open to considering a counter-proposal based on honest numbers. What is up to me is to decide how much I’m willing to pay.

Out of respect for the dealer and with an understanding of the realities of the modern car business, I will defend the dealer’s right not to sell me a car at the price I clearly tell the dealer I’m willing to pay. Fair is fair.
 
  #161  
Old 03-06-2017, 07:47 AM
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MINI Factory strike

This should put a damper on MINI sales. http://www.motoringfile.com/2017/03/...-plant-oxford/

I am not making a political statement about unions for or against. The merits of either side not withstanding, it will be interested to see if BMW management decides to hold hard or talk. Unions play a different role in Europe and the UK than they do here.
 
  #162  
Old 03-06-2017, 03:14 PM
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Originally Posted by zagman View Post
This should put a damper on MINI sales. http://www.motoringfile.com/2017/03/...-plant-oxford/

I am not making a political statement about unions for or against. The merits of either side not withstanding, it will be interested to see if BMW management decides to hold hard or talk. Unions play a different role in Europe and the UK than they do here.
Interesting. BMW's board of supervisors, by German law, is composed of half labor representatives and half shareholder representatives. So, it surprises me that they should sufficiently antagonize a labor union as to prompt a strike.
 
  #163  
Old 03-06-2017, 03:30 PM
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I had the same thoughts. It is interesting because management labor relations operate differently that here in the US. I am also concerned because I have a car I want built
 
  #164  
Old 03-06-2017, 03:39 PM
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Originally Posted by zagman View Post
I had the same thoughts. It is interesting because management labor relations operate differently that here in the US. I am also concerned because I have a car I want built
I was thinking about that, zagman. You don't want a JCW pounded together by a bunch of disgruntled British laborers!! I remember when there was labor trouble at Rolls Royce back in the late 1970's -- cars came over with newspaper shoved in air conditioning ducts and such. But those were the days before modern quality control and automated assembly and a gazillion inspections.

If they show up to work you'll get your car built, and it will be a great one.

All you need is a build date and a finalized deal. By now your dealer should be able to run a Vehicle Inquiry Report which will have a production number, even if no production date is assigned.
 
  #165  
Old 03-07-2017, 02:08 PM
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It Took 2 Dealers

On my Clubman deal, the first dealer (where I test drove a car and fell in lust), could have had my order but he was not forthcoming regarding money factor and other aspects of the deal. He also misrepresented the invoice amount. I pressed him because I couldn't get my calculations to match his when I used the best advertised rates from MINI. He dodged and double-spoke and then finally, when I said it looked like the lease money factor he was using was higher than it should be, he said that he needed to add a margin or he might as well just fire his finance people. I thanked him for his time, emailed a second dealer, and the rest is happy... very happy history.
 
  #166  
Old 03-09-2017, 04:31 PM
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Why do dealers do this????

On another thread someone is posting details of negotiations with a dealer on a new ordered car. The OP got the dealer to go from $1,500 off MSRP down to $2,000 off MSRP. This is on a $36,800 MSRP car. Not bad.

Then the dealer comes up with a $499 "conveyance fee" thus clawing back the difference between the original $1,500 discount and the negotiated $2,000 discount. Now maybe the conveyance fee would have popped up at the $1,500 discount deal, making it only $1,000 discount.

So, first off, congratulations to the purchaser for getting the $2,000 discount, even if the dealer is trying to reduce it by $500 with the conveyance fee.

But WHY can't dealers just be straight up with people??? Why must one hand giveth and the other hand taketh it back?

This is why it is SO IMPORTANT to keep track of all moving parts of any deal and why it is important to focus on the TOTAL TRANSACTION COST.
 
  #167  
Old 03-09-2017, 06:00 PM
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Originally Posted by 2017All4 View Post
<snip>
This is why it is SO IMPORTANT to keep track of all moving parts of any deal and why it is important to focus on the TOTAL TRANSACTION COST.
Oh so true! As an Engineer, I am an absolutely terrible negotiator, but my better half, who is an Accountant is an absolute bulldog when it comes to dealing with sales people. I walk in with facts/figures from my research and I let my 'bulldog' enforce that the TTC does not magically float toward their favor.

My MINI experience did have a slight hiccup because the Sales Manager had spoke about pricing of a non-S model, when we thought the discussion was the S model. I looked at both, so we did initially have both models on the consideration table. Luckily I had detailed cost info on both models and was able to prove to my wife that he was not trying to pull a fast one on us, but had mixed up which model we were discussing. Once that confusion was cleared we went back over the numbers and got the deal we were all happy with.

Having factual numbers in front of you will almost always certainly help keep the negotiations on a 'clean' track and prevent the 'hocus-pocus' numbers confusion if a dealer plays that game.
 
  #168  
Old 03-09-2017, 08:37 PM
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Originally Posted by 2017All4 View Post
On another thread someone is posting details of negotiations with a dealer on a new ordered car. The OP got the dealer to go from $1,500 off MSRP down to $2,000 off MSRP. This is on a $36,800 MSRP car. Not bad.

Then the dealer comes up with a $499 "conveyance fee" thus clawing back the difference between the original $1,500 discount and the negotiated $2,000 discount. Now maybe the conveyance fee would have popped up at the $1,500 discount deal, making it only $1,000 discount.

So, first off, congratulations to the purchaser for getting the $2,000 discount, even if the dealer is trying to reduce it by $500 with the conveyance fee.

But WHY can't dealers just be straight up with people??? Why must one hand giveth and the other hand taketh it back?

This is why it is SO IMPORTANT to keep track of all moving parts of any deal and why it is important to focus on the TOTAL TRANSACTION COST.
The conveyance fee didn't just 'pop up,' it was there all along, right from the beginning of negotiations.

Someone just didn't pay attention.

I'm no fan of inflated documentation fees, especially since I see no part of that "profit" as a salesperson. Regardless, they're non-negotiable.
 
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Old 03-10-2017, 11:17 AM
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The Deal that Opened My Eyes

June, 2012. My daily driver was a few months and a few thousand miles away from going out of warranty. It was a “feed it or shoot it” moment. Knowing the fancy air suspension had a high likelihood of costly failure within the next couple of years, and knowing that, at a minimum, new tires, brakes with new rotors, serpentine belt and engine hoses, a radiator flush and tranny service, were all on the horizon, and knowing that the day the warranty expired the already diminished value of my ride would drop by a minimum of 30% more, I had a clear choice: Drive it until the wheels fell off, paying a couple of thousand here and a couple of more thousand there and living with decreasing reliability with each passing mile, or take my lumps now and start over with a new car.

It's always easy to talk a car lover into deciding that the facts favor getting a new car. My trusted mechanic, who stood to make money if I kept my aging beauty, gave me the honest facts. Upcoming required maintenance alone would be a few thousand over the next two years of ownership and, on top of that, once out of warranty, if a major system failed, like air conditioning or automatic suspension, or the transmission or complex differential, or, or, or….

While the choice was clear, there is always that additional factor present for those of us who view our cars as more than transportation appliances. It’s that “feeling” of operating and enjoying a well-running, fine automobile that is fun, or luxurious, or fast, or loud, or whatever it is that gives the driving experience that little extra kick car people crave. And driving a once-wonderful car that is moving into the netherworld of “what’s gonna break down next?” is kind of a joy-drainer – especially in high line lux cars like the one I was deciding to keep or sell.

So I started to do the math (as if I really needed much of a push to go out and get a new fun car). The car I was driving was a 2008 fabulous Jag sedan that I had purchased as a CPO lease return. The MSRP in 2008 was over $86,000, and, in January 2010 when I bought the car with 13,000 miles and the extended Jag certified pre-owned Select Edition warranty, I paid less than $40,000 out the door and the car was like factory new and truly as flawless as it could be.

Thirty months later I had laid another 50,000 plus miles on the car and other than oil changes, hadn’t put a dime into it… yet. The Jag dealer said it was worth $20,000 wholesale to him and he thought I could sell it myself for about $24,000 to $26,000. He said he would try to get $28,000 on his Jag lot.

The car that caught my eye was a $96,000 2012 Jag XK, a model coming to the end if its production run. The particular car I was considering had under 3,000 miles, had never been registered, and was a one-off, highly optioned beauty with several custom features that a regional Jaguar executive had special ordered for himself. He had the car for less than six months and had moved on to a new F-type. The car came with full warranty and was leaseable as a new, unregistered vehicle. It was now the end of June and that car wasn’t going to last long if I didn’t grab it.





What I failed to realize was that END OF JUNE, meant end of month, end of quarter, and end of model year. I called the Jag dealership general manager, whom I had met during the negotiations for the Jag I was driving. He laughed when I introduced myself. I said, “you probably don’t remember me…” He said, “Oh, I remember you. You ground us to the nub.” I told him I was ready to grind again if he was willing and he said I didn’t have to and proceeded to lay out an amazing offer. He explained that he had a waiting list of buyers willing to pay over MSRP on $100,000 plus Range Rovers but he couldn’t get a big enough allocation of those cars to fill the orders he had. He said that his next allocation was based on overall sales of Jags and Range Rovers and, in addition, they were close to some major bonus money from Jag. He said we’ve got until the last day in June to get it all done and threw numbers at me that blew my mind. He said, he would take some equity from my current car plus a rebate from Jaguar to cover all out-of-pocket drive offs, he would discount the new XK by $23,000, he would give me a below-market lease money factor, he would cut me a check for $16,500, and Jag would send me an additional $1,500 in loyalty cash, and the car came with complimentary maintenance on a two year, 18,000 mile per year lease – an unheard of high mileage allowance on luxury car leases. And the $16,500 residual equity in my trade, plus the $1,500 from Jaguar covered ALL of my payments for the entire lease term. So the equity in my trade paid for my new XK lease and I never added an additional out-of-pocket dollar to the deal. Yep, $750/month including tax for an 18,000 mile per year/free scheduled maintenance lease on a $96,000 Jag dream machine.

I said I would do the deal if he promised to explain the numbers to me. He said it was simple. Jaguar was putting $20,000 “in the trunk,” meaning, secret factory-to-dealer back end money to incentivize dealers to move out the last of the remaining XK’s because the focus was on the new F-type model and they didn’t want the older style sitting around showrooms. In addition, the end-of-quarter incentives to dealers were substantial and, while taking a loss on my deal, they would get it all back, and more, for moving units and increasing their future allocation of the very profitable Range Rovers.

So, when we go to dealers and ask, “How close to invoice will you sell me this car today?” we are certainly improving the deal, but, make no mistake about it, invoice is a crock and a way for dealers to obfuscate their true cost for the cars they are selling us at a so-called “discount.”

In the case of BMW/MINI, more and more of the hidden “back end” money is based on volume, customer satisfaction and retention (repeat customers are GOLD), and other performance benchmarks that are often specific to each dealer and can vary among sales regions.

Thus, it has become impossible to know the dealer’s cost on a particular vehicle. Often the sales manager doesn’t even know for sure. All they know is how many units per sales period (month, quarter, year) they are expected to move and, depending where they are in relation to meeting their goal, how much they can afford to give up on a particular sale in order to move closer to the big payoff that comes from hitting the goal.

This is why on one day a buyer with good credit might get a back of invoice deal and the next week another buyer of the same model at the same dealer might be lucky to shave $1,000 off of MSRP.

So, we shop, we inform ourselves, whenever possible we get multiple dealers to bid for our business, we keep our eyes on all the moving parts of the deal to prevent dealers from clawing back portions of the discounts we’ve fought so hard to secure, and we ALWAYS keep track of the total transaction cost.

But make no mistake and have no illusions, in this internet age, when anyone can learn the invoice on a car, the manufacturers and dealers are way ahead of us. The invoice means less and less and they’ve got us focused on “How close to invoice?” And the line salesperson rarely sees any of the back end money and makes a living on the very thin gross margin between “invoice” and MSRP and winces every time another dollar disappears from that “gross” margin because that’s food coming off his/her table.

Meanwhile, all the real money is behind door number 3 – a door so well hidden we don’t even know where it is.
 
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Old 03-10-2017, 02:50 PM
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The MINI USA web page has restored some information on current special offers. On the lease deals you can once-again calculate residuals, etc from the information the site provides in the small print.

Go to: http://www.miniusa.com/content/miniu...rs.html#/start

and after typing in your zip code you can view current lease deals.

Not as much info as last year, but it's a start.
 
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Old 03-10-2017, 03:04 PM
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Originally Posted by 2017All4 View Post
But make no mistake and have no illusions, in this internet age, when anyone can learn the invoice on a car, the manufacturers and dealers are way ahead of us. The invoice means less and less and they’ve got us focused on “How close to invoice?” And the line salesperson rarely sees any of the back end money and makes a living on the very thin gross margin between “invoice” and MSRP and winces every time another dollar disappears from that “gross” margin because that’s food coming off his/her table.

Meanwhile, all the real money is behind door number 3 – a door so well hidden we don’t even know where it is.
The deals you're talking about are not simple deals. They're opportunities that are contingent upon time and season, and you shouldn't be advising people to walk into dealerships and demand ridiculous discounts (including the 8% discount that you herald as the end-all-be-all new MINI discount). That just ruins expectations for all parties.

To be honest, the extra bonus money a dealership gets from the manufacturer shouldn't concern you - you're in no way shape or form entitled to it. But if you happen to stumble upon it, and they're willing to pass it along to you in good faith, much like what happened on your 1-of-1 XK, by all means, that's fantastic. But deals like that are not everyday deals.
 
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Old 03-10-2017, 03:37 PM
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Originally Posted by Zillon View Post
The deals you're talking about are not simple deals. They're opportunities that are contingent upon time and season, and you shouldn't be advising people to walk into dealerships and demand ridiculous discounts (including the 8% discount that you herald as the end-all-be-all new MINI discount). That just ruins expectations for all parties.

To be honest, the extra bonus money a dealership gets from the manufacturer shouldn't concern you - you're in no way shape or form entitled to it. But if you happen to stumble upon it, and they're willing to pass it along to you in good faith, much like what happened on your 1-of-1 XK, by all means, that's fantastic. But deals like that are not everyday deals.
I agree. I've tried to be very careful to differentiate between calculating invoice and expecting to receive a dead invoice deal. Two different things altogether.

What I have consistently advocated, and have found to be true in all my deals, is that being well-schooled on the numbers is a good approach.

I have also found that many car dealers continue to play games with numbers and use all sorts of techniques to increase gross. Who can blame them in a system that is complex.

As I have said in other posts, I defend the dealer's right to refuse to sell a car to a customer if the dealer can't or won't meet the customer's price demand.

But I also defend a customer's right to be informed, and to use that information to attain the best possible deal.

I have also suggested that being polite, being well-prepared, and using direct communication to keep a sales conversation focused on what the customer wants to see happen are all good things.

When trainers quit teaching "word tracks" and "how to overcome objections," and when sales managers use positive reinforcement in sales meetings, and, of course, when customers learn to be forthwright and honest with salespeople, we will all be the better for it.

But, I think we can agree, that when a $2,000 discount is agreed upon but it's not really a $2,000 discount because F&I tacks on a $500 conveyance fee that looks like it's some sort of mandatory "fee" when in reality it's simply a dealer profit and discount claw-back, things need to change.

So, yes, I'm gonna go in when I'm ready to purchase and I'm not going to string the salesperson along or waste anyone's time. I'm going to ask for what I have calculated to be a fair deal and I expect the salesman to tell me if it can be done or not. What I don't want is a lot of word games or subject-changing or avoidance of my questions because I've stepped outside of the dealer's choreographed sales sequence.

When I ask for a price based on my calculations, all the salesperson needs to do to straighten me out is to say, "We can't sell you a car for the price you have offered but if you're ready to buy today we can sit down with my manager and hammer out our absolute best offer which I would encourage you to consider. I believe we are offering you an outstanding value and if you'll give me the opportunity, I will show you why we will offer you the best deal you can get on the car you want." That salesperson will probably earn my business, even if his/her numbers are higher than what I had hoped for. IF it is demonstrated to me that the proposed deal is truly the best value I can hope for. At that point, either I'm a buyer or I'm not.

As for all the strokes and tire kickers, I have said that they need to get their heads screwed on and their money together before they engage with a dealership. But if someone is ready to buy a car, and they know what they want, and they have a clear idea of what they are willing to pay, everybody wins, even on a thin deal.
 
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Old 03-10-2017, 04:14 PM
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Originally Posted by Zillon View Post
The deals you're talking about are not simple deals. They're opportunities that are contingent upon time and season, and you shouldn't be advising people to walk into dealerships and demand ridiculous discounts (including the 8% discount that you herald as the end-all-be-all new MINI discount). That just ruins expectations for all parties.
Here's EXACTLY what I've said in this thread regarding invoice deals and I stand by every word:

"We’ve all heard it. “If we sold cars to everyone at invoice we’d be broke.”

This thread isn’t for “everyone.” This thread will resonate with the small percentage of car buyers who have excellent credit and don’t mind waiting for the right moment and are willing to take the time and extra effort required to get the best possible deal and pricing on their next car purchase.

For that small percentage, following the steps, holding firm on a thin but fair offer, and avoiding the traps and snares of overpriced add-ons, rate bumps, and hidden fees, is work worth doing.

If you are willing to walk away if the thin deal you want, ask for, and tell the dealer you are ready to do, can’t happen the first time you try, the deal you finally make on that car, or, if not that one, another one, on another day and maybe at a different dealer, will be better. If you have to have a specific car on a specific day then you will probably pay more.
"

I think that's fair.

What do others think? I'm willing to stand corrected.
 
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Old 03-11-2017, 02:52 PM
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What do I think? I think you're absolutely correct in your approach and its applicability. And I don't recall ever seeing it put forth so thoroughly and clearly.
 
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Old 03-12-2017, 03:47 PM
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Originally Posted by Sailorlite View Post
What do I think? I think you're absolutely correct in your approach and its applicability. And I don't recall ever seeing it put forth so thoroughly and clearly.
I truly appreciate your comment, Sailorlite. Thank you.
 

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