Looks to me like there's some pent up demand for the Gen 3 Countryman whose sales are way off in Feb. And sales of the HB/4D are down because they're been selling them the longest. 2018 will be the 5th year of Gen 3 sales. The Gen 2 had 7 model years, the Gen 1 had 4 I think. So we're getting near the end of the Gen 3 cars. Seems like yesterday right?

 

Last night I was at a rehearsal for a charity ball I will be attending with one of my goddaughters. There were about 20 of us old guys who can barely put one foot in front of the other, all trying to learn the steps to a synchronized dance we have to do with these lovely, energetic, super-coordinated teenage debutantes.

Our dance coach was reassuring. She pointed out that there are a few points within the dance sequence wherein, if one gets out of step, there are opportunities to correct and get back in sync.

While stumbling through the dance sequence, my mind wandered back to this thread.

I started thinking about how in a car deal it is important to know all the steps AND get the steps in the correct sequence. Yet, as our dance coach said, even if you stumble through the steps, there are points where everything can be corrected and put back on track, resulting in an elegant and happy finish.

So, while doing the car buying minuet, when you get to the part of the dance where it’s time to say, “At these numbers and terms, we have a deal,” there is an opportunity to correct for any missteps and get things back in sync for the elegant finish. As in:

“Well, let’s go over this one more time before we go into Finance just to make sure everything we have agreed upon is here. We need to MAKE SURE that the FINAL PRICE, after all costs and fees, is the dollar amount we’ve agreed upon. And we need to confirm the interest rate (or lease money factor/residual rate) is what has been promised. We need to make sure all the various additional costs, fees and taxes are all listed so that the Total Transaction Cost is what we agreed it needs to be.”

As Zillon has pointed out, things like conveyance fees should be known from the beginning. Zillon said, “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.”

Perhaps buyers are not always aware of lurking dealer fees until they get to F&I and doc fees appear on the final papers. But even if a buyer was not paying attention at the beginning of price negotiations when the honest and forthright salesperson said, “Oh, and don’t forget that this dealership charges a $499 conveyance fee on every deal we do. It’s not a fee required by law but we add it to every deal,” the moment where the purchaser says, “let’s go over this one more time,” is the moment where the dance gets back in sync and the NET AGREED DELIVERY PRICE is protected, no matter what F&I may try to use to claw back money from the final deal.

The moral to this story is, if you’ve negotiated something in your deal, be it trade-in valuation, loan terms, net discount, free stuff, add-ons, net agreed delivery price, or anything else, “let’s go over it one more time,” gives a car buyer the chance to confirm and insist that the deal is the deal the buyer wants.

ALL THE FAST TALKING by a salesperson or a manager or anyone pretending to be a person with authority at the dealership shouldn’t change the deal you will say yes to. When the kindly manager says, with all the gravitas of a high school principal, “We are giving you the $2,000 discount. See, it’s right here.,” the savvy buyer calmly replies, “Perhaps my salesman wasn’t clear when he explained the terms of the deal I agreed to. We agreed that my NET DISCOUNT would be $2,000 below the $34,000 MSRP, which means my deal is supposed to be $32,000 plus government fees and taxes. What I see here is MSRP of $34,000 and the $499 conveyance fee for a total of $34,499. Then you are subtracting $2,000 from that which makes it $32,499 which is $499, plus the tax on the extra $499, more than I agreed to pay for this car. So, I’m not objecting to your dealership’s $499 conveyance fee, even though I have no idea what that fee covers. I’m just saying that the deal I agreed to, and the deal I need in order to say yes and in order to give you top ratings on the survey, is a net delivery price of $32,000, less credit for any rebates or incentives available to customers at the time I take delivery, with taxes and government fees based upon and added to that net amount. I see there’s DMV, and the tire fee and the state smog fee, and the sales tax, all of which I expect to pay. And if I also have to pay your $499 fee, that’s fine. Just discount the car whatever way you need to do it to get me to the $32,000 net before government taxes and the legally required fees we agreed to, with the additional understanding that if MINI USA offers any customer cash or incentives when I take delivery, I get those additional discounts too. We need to get that fixed so we can finish this deal as agreed.”

As I learned last night at the dance rehearsal, it’s easy to get tripped up when there are lots of steps, the music’s playing, and things are moving fast.

There are also always opportunities to get back in sync, finish the dance, take your bows, and motor, at the right price.

 

Great quarterbacks all have one particular ability in common. They have an uncanny capacity to “slow down the game” in their minds. They can see plays developing, almost in slow motion, while the internal clock inside their heads automatically counts out the unfolding seconds.

Race car drivers have the same skill, as do ski racers, hockey players, and first responders in crisis situations. War veterans tell battle stories of seeing things unfold on the battlefield in slo-mo. The best executives do the same thing during tense meetings. They are present and engaged but don’t get excited or ahead of themselves during intense situations.

Sigmund Freud talked about “free floating attention,” the ability to be present in a conversation yet, at the same time, have another part of one’s mind sort of floating around thinking along a parallel track about whatever pops into one’s mind. People who are well-trained in this technique exude a quiet, centered calm that has a power all its own.

So now we enter the next level of negotiating Zen – the ability to “slow the game down” in one’s mind and entertain one’s self with one’s own thoughts even when things are getting intense and trying to happen quickly. And it works! (Great for dealing with children and cranky co-workers and dyspeptic spouses and in-laws, but that’s for another thread.)

A very simple example has been touched upon in prior posts when the four-square sales tool was explored. We saw how tricks are tried like writing the MSRP in the price box with “+ tax & fees” scrawled under the dollar amount while the salesperson is directing the customer’s attention to the contents of another box within the four square grid. This is a fast shuffle that, when observed in the slow motion mind of a focused customer, is actually almost amusing. The all-seeing customer lets the salesperson finish whatever word track patter they are saying and then calmly says, “before we get into the down payment, let’s go back to what you wrote in the price box. I noticed you wrote the MSRP and a note about tax and fees. Let’s get that number fixed before we move on to the other components of the deal I’ll say yes to, …shall we?”

No matter how fast they go, the customer maintains a slower internal pace. Total Zen Control….

The only exception to this is if/when the dealer starts using stall techniques as a means of wearing a customer down. This trick is used to nudge the unaware customer into investing too much time at the dealership, with the hope of creating a mood in the customer of “let’s just get this over with and pay what they’re asking and get the new car and get on our way.” In this situation, the customer sees what is happening in slow motion and calmly says, “If this isn’t a convenient time to get everything done in a timely fashion, we can always leave and come back when everyone we need is available to get this deal done.” So things like waiting for trade-in appraisals (while the dealer has possession of your trade-in car keys), or waiting a long time for the sales manager to evaluate your deal and send back a confusing second pencil counter-proposal, are moments when it may be time to say, politely, that you’re ready to jump on the be-back bus if things don’t move along.

But, as a general rule, SLOW IT DOWN, don’t be afraid to ask, “Can we go over all these numbers one more time just to make sure everything is how I need it to be?,” or “Shall we make sure we’ve got everything sorted out so I can say yes to this deal?”

Slowing down the game is often the fastest way to getting the deal you want on the car you love.

 

Edmunds.com is now showing the JCW Clubman pricing with about a 10% spread between invoice and MSRP!!

 

Delete

 

Delete

 

Did you ever play a computer game where, to get your character to the next level, you have to first complete specific tasks on the level you’re on?

It’s the same game when doing a car deal. The sales team is doing all it can to get the customer locked into following a series of carefully orchestrated “steps to the sale.” And one of the ways sales people are trained to keep customers in step is to ignore customer questions that threaten to derail the process, or, even worse, to handle customer questions as objections and respond to customer questions with word tracks designed to refocus the conversation away from the customer’s question and back toward whatever track the salesperson wants the customer on.

When people watch videos of sales interactions they are often amazed and amused at how frequently customer questions are not answered and how often salespeople respond to questions by changing the subject. And worse, how often customers allow their questions to be ignored!

One essential component to completing a car deal when the price the customer wants to pay is lower than what the dealer wants to get, is to continue to insist that your questions are answered, and each component of the deal is clarified, agreed upon, and written down, and whatever issue you raise is fully resolved prior to moving to the next step, or level, of the sales transaction.

So when the customer says, “This is the total out-the-door price I need to see, including all taxes and fees. Are there any other fees we haven’t listed here?” And the salesperson responds with, “Our Finance Manager will go over all the numbers with you when we do the paperwork,” the customer says, “Perhaps I wasn’t clear. I told you this is the total out-the-door price I need to see and then I asked you if there are any other fees we haven’t listed. ARE THERE ANY OTHER FEES? Because if there are other costs, we will need to adjust things to include those costs WITHOUT INCREASING the total out-the-door price I need to see in order to say yes to this deal today.”

Until the customer gets the question answered, it is the customer’s responsibility to not let anything move on to the next step, because, on the next level, evil may be lurking and the customer will need all the numbers written down in order to fight off the fees and charges awaiting behind the next door.

It’s just like a computer game. If you don’t get the magic sword, you can’t slay the dragon that you will surely encounter on the next level.

 

You’ve followed the steps, remaining laser-focused on the numbers and you believe your car deal, including any extras or add-ons, has been finalized and confirmed.

You sit down in the Finance office to “complete the paperwork,” and things appear to be moving right along.

The “Finance Manager” hands you the documents to sign. There are a bunch of documents.

You say, “Let’s go over all the numbers on the sales contract.”

As you and the Finance Manager go through each item, you spot a $25 wire transfer fee and a $89 document fee. Because you are well-schooled, you understand that $25+$89=$114 pure profit for the dealer that was not part of the deal you and the sales person hammered out.

Things are happening fast. The Finance Manager is talking about something but, in your Zen mind, it’s just mild background noise that you filter out as you slowly have a little private conversation with yourself.

When the Finance Manager stops talking, you calmly look up from the paperwork and say, “There is a mistake in this document. When I add everything up it is $114 higher than the out-the-door price I agreed to. Here, look at this sheet that I kept. It documents the final agreement the Sales Manager approved. It shows a final out-the-door price of $36,824, including all taxes and fees. Let’s take a minute and add up all the numbers in the contract because, unless I’ve miscalculated, it appears that the numbers on this contract add up to $114 more than we agreed to. Please double-check your numbers to make sure the total cost to me is the $36,824.”

IF THE FINANCE MANAGER DOES ANYTHING OTHER THAN WHAT YOU HAVE JUST ASKED, STOP THE PROCESS!!

The Finance Manager may start explaining about how there must be a misunderstanding, or all contracts have those fees, or the customer may not have understood, or the sales person may not have been as clear as he/she should have been…

You let the Finance Manager finish his word track, the entire time listening to the soft, calming music that is playing in your Zen consciousness. When the Finance Manager is finished, you say, “However you do it is fine. Just correct the contract so that the total cost to me is $36,824, including all taxes and fees. That’s all we need to do here so I can sign and we can get my car delivered. Thanks for taking care of this for me.”

If it doesn’t happen right then, you stand up, WALK OUT OF THE OFFICE, go directly to your sales person or the sales manager and say, “I’m having a little difficulty in the Finance office. I pointed out an error in the contract amount and asked, TWICE, for the Finance Manager to correct it, and he has not done it. I’M NOT HAVING A 10 EXPERIENCE right now. I need your help in getting this fixed. We agreed to $36,824 out-the-door and the sales contract I was just asked to sign is $114 higher than that and when I pointed out this error, the Finance Manager started talking fast and seemed to be trying to change the subject.”

Okay, many people would say that at this point there’s no reason to fight over $114 on a $37,000 car deal.

Well, when is a deal a deal?

In my experience, it is often very difficult for customers to get all the numbers down in writing on a single sheet of paper before entering the Finance office. And the reason is, the dealership DOES NOT WANT the customer to walk into Finance with a written document in hand that has the final deal with the sales manager’s written approval. Because if a customer has a written, signed deal, there is no way for Finance to change it without the customer’s approval. And sometimes little things like state-mandated tire disposal fees can slip through the cracks. WHICH IS WHY THE TOTAL FINAL PRICE NEEDS TO BE DOCUMENTED BEFORE THE CONTRACT IS PREPARED.

So, a deal is a deal when you have a piece of paper with all the itemized costs and the final, out-the-door price clearly written and signed off on by you and by someone from the dealership.

If there is any hesitation on the part of the sales team to sign off on, and give you a signed copy of, the deal you’ve negotiated – if they say something like, “We’ll just take this over to Finance and they will prepare the final documents,” THAT IS A WARNING to a customer that the numbers will be changed.

If you have to fight for a copy of the deal sheet, calmly say, “While Finance is preparing the contract I’d like to review all these numbers. You seem to be hesitant to give me a copy of what we’ve just agreed to. Why the hesitation?”

If the sales person attempts to deflect your question by saying something like, “They put all this together in Finance and you’ll have a chance to review it all before you sign the contract,” you say, “I’d like a copy now please, before we turn it over to Finance.”

This may seem like a lot of unnecessary back-and-forth.

Step back for a moment and slowly think about the big picture. If a dealer sells 100 cars a month and they add $114 of fees onto each deal, that’s $11,400 additional pure profit EVERY MONTH, or $136,800 extra profit EVERY YEAR. So, yes, the dealer is going to use tricks and fast talk because they’re fighting for part of that $136,800. And they intend to get it all if they can.

So when they object to a simple request for a copy of the final deal sheet, politely object to their objection, walk into Finance with written proof of the out-the-door cost of your transaction, and make them honor it, so you can give them top ratings on the survey for being the honest and honorable people we all expect car dealers to be.

Or just pay the extra $114 dollars, get into your new car, and make it that much harder for the rest of us next time when the dealer tries the same stuff on us.

 

Hey I live in Prescott, AZ!

 

I picked that region because I know of at least one Clubman JCW purchaser in the Utah/Arizona area who was trying to do a JCW build on Edmunds.

I'm hoping the invoice/MSRP spread data will assist people in their negotiations!

 

Ive been looking at Edmunds for my JCW F54. I'm the one I'm Utah that is looking

 

Zagman, I hope you were able to find the JCW builder on Edmunds and were able to get the numbers you need for your negotiations. Hopefully by the time your Clubman gets to your dealer MINI will have some good incentives for you. I used the AZ zip with you in mind hoping you'd see what you needed.

Get into the Zen and get a good deal on a great car!

 

I have been using it!! I am in the middle of trying to get my MA to get me numbers via email. Your advice is as timely as ever.

 

You know all the reasons why dealers drag their feet on numbers. Hang tough!!

 

This is the winter our ancient metal chimney cap decided to die. Fifteen minutes of internet research took me through the looking glass and down the rabbit hole into the world of decorative chimney caps and those who fabricate and install them.

I contacted a local guy with a nice web site and solid YELP reviews. We made an appointment, he looked at the job, we discussed exactly what I wanted and a week later he called with a verbal 'estimate' of, “between $2,800 and $3,000, depending on the final materials cost.”

Having learned from car dealers all about add-ons and hidden fees, I asked if that was the final installed price, including removal and disposal of the old cap. He said, “Yes. I’ll remove and haul away the old cap and install the new one.” I asked how much of the price was for fabricating the new cap and how much was for the labor to remove and install. He said, “$800 labor to remove and install, the rest is disposal, fabrication and profit.”

I then casually asked, “About how many hours do you figure it’s going to take to remove the old cap and install the new one?” To which he replied, “It should go quick. Maximum of 2 hours to take down the old one and put up the new one and maybe a couple more hours of back and forth to my fabricator.” I asked, “So, maybe 5 hours total including your site visit last week, the installation and all the time running back and forth?” “Yeah, at the most,” he said. I then asked, “How much do you need to make per hour?” He told me he really doesn’t figure it that way. But I did, and $800 for 5 hours work came out to $160 per hour. Plus the vendor told me that the fabrication cost included profit.

I then called a local building contractor who gave me the name of the metal fabricator he uses. The contractor’s fabricator came by the house the same day I called him, checked out what I wanted, and that afternoon texted me his written bid of $2,233 complete. I sent him back a text asking him if he could get it done for $2,000 cash and he texted back, “You bet!” I took this to mean he knows his numbers and his costs and was happy to do the job for 2 grand. I texted him back, "Let's do it."

Five days later the new all-copper chimney cap was fabricated, installed flawlessly, and looks beautiful – the fabricator and one helper got the old cap removed and the new one installed perfectly in less than 2 hours.

So, the initial proposed cost of $2,800, or maybe $3,000, from the first guy became $2,233 from a great guy recommended by a contractor I know and trust. Because I asked, and offered cash, he further discounted the job another 10.5% down to $2,000. And I got just what I wanted, fast and perfect.

I invested less than 2 hours of my time in research and negotiation to get to this deal, and the price dropped at least $800 from a minimum cost of $2,800 to a maximum cost of $2,000. The job was done quickly and perfectly, without my needing to supervise, lift a finger to help, or clean up, and the vendor left happy with 2 grand in his hand and thanked me for the business.

As has been said before on this thread, the customer is giving the car dealer an opportunity to sell a car. The customer does the research and calculates what they think is a reasonable number. The customer asks the dealer if they will do the deal at what the customer thinks is a reasonable offered price.

Sometimes the dealer says they can’t or won’t do the deal at the customer’s offered price. Sometimes they say, “you bet!” And, in my experience, the vendor who says, “you bet!” is usually a more pleasant person to deal with.

I would never presume to tell a person what they should charge for an hour of their time or how much profit they need to make on a specific transaction. But I reserve the right to decide if I’m willing to pay what a person tells me, in advance, they need to get for an hour of their time or to complete a transaction. And I am very comfortable proposing a good faith, reasonable offer of what I am willing to pay – an offer which the other party is free to accept, reject, or counter.

I invested about 2 hours of my time to get my new custom chimney cap and saved at least $800 and got exactly what I wanted without any hassle. $800 for 2 hours means, evidently, when it comes to ordering chimney caps, my time is worth about $400 per hour.

On our most recent MINI deal, the second dealer sold me my MINI for over $1,000 less than the first dealer offered, and the crooked first dealer tried to jack up the lease money factor without telling me, which would have added at least $200 more to the total transaction cost. The negotiations with the second dealer were done quickly by email and, even with the extra 20 minutes drive time to the more distant second dealer to take delivery of our MINI, I would estimate, at most, an additional 3 total hours more were spent than if we could have done the deal with the first dealer we visited. So, 3 hours extra time invested to save at least $1,200 makes the value of my time when it comes to purchasing a new MINI… about $400 per hour!

So, what’s your time worth? How much do you need to make per hour when you’re wheelin’ and dealin’?

 

Some sales gurus and trainers insist that “all deals come from The Desk,” meaning the salesperson should not offer or solicit a sales price offer for a car from the customer and, instead, all offers and counter-offers are to be managed by the person at the sales manager’s desk. This school of thought is based on a “steps to the sale” formula that does not allow for deviation from a carefully orchestrated sequence leading up to closing a car sale.

“All deals come from The Desk” views the customer as manipulable, fickle, and as a person who needs to be controlled by the sales team throughout the entire sales process.

I’ve tried it about every way there is. I’ve walked onto a lot without an appointment and dealt with the salesman who was next up. I’ve used the telephone and internet to work my way up to the sales manager so that everything is about done and put together before I set foot on the lot. I’ve done the internet thing and then met the salesperson by appointment and done a test drive and a deal. I’ve had my trade valued by the dealer and gone ahead and let the dealer have the trade. I’ve sold my trade myself privately and I’ve sold my trade to one dealer and purchased my new car from a second dealer.

My conclusion? If the customer is well prepared, it doesn’t much matter how one starts the process and, when it comes to talking numbers, it doesn’t much matter who goes first. It can be the customer or the salesperson or the manager manning The Desk.

If the customer knows the numbers and sticks with those numbers, if the numbers are reasonable and can translate into a doable deal, either the deal will come together or it won’t.

So if a salesperson is expected by their manager to stick to a scripted “steps to the sale” approach and the customer has a deep understanding of all the dynamics and mechanics from the dealer’s side of the game, the customer can play along and even be amused as the dealer works hard to put the customer together, allowing the dealer to feel they are in control – hey, maybe they are in control. It doesn’t matter.

If a customer walks on a lot knowing CarMax will buy his trade for $10,000 and the customer knows the invoice on the MINI he/she wants is $34,500 and that there’s a $1,000 rebate and below market financing available through MINI USA and they know they’ve got a top tier credit score and they know the payoff on their trade is $2,472.52 good until the 16th of the month, and they have decided that they want certain add-ons if the price is right, and they know what that “right” price is, and they know they’re not going to set foot in the Finance Office until they have the final, complete, all-inclusive, no ifs, ands, or buts, absolute out-the-door total, complete, with everything price in their hands, then…

It doesn’t matter who goes first on price negotiations.

HOWEVER, if the customer is lazy, or shy, or unprepared, then it MIGHT matter how the price negotiations are handled.

The rule is, the better prepared the customer is, the less the price negotiation sequence and process matters whereas, conversely, the less prepared the customer, the more it might matter.

So, be prepared and let the dealer do the dance and entertain yourself as you knowingly watch what they try to do to you, or be unprepared and hope you aren’t the person who pays full freight.

Unless you really don’t care. But then, if you didn’t care you wouldn’t be slogging through this thread.

 

I care at the time of purchase but not enough to overcome the lazy factor. Last attempt I tried a broker who just made it worse because he needed his $500 and MINI wasn't about to pay him.

Next time I'm contracting it out to 2017ALL4.

 

Whose time is worth $400/hour. Buddy, I'm not sure you're gonna come out ahead on that.

I immensely enjoy his writing style and stories, and I count us all as privileged to have someone with so much experience in this realm telling us how the system works ... for free!

I'll give you my professional advice, but I'll charge you my standard hourly rate. Which is only half his, but on the other hand I'm afraid my expertise is limited to producing websites, mobile apps and digital marketing. Not so much in car dealers shenanigans

2017ALL4, thanks for the freebies!

 

LOL!!

It's not how much MY time is worth. My goal is to help other MINI buyers make $400/hour through the savings realized from their informed shopping

 

Ya know, Minnie the Moocher, I doubt you are lazy at all. I think you invested time searching, then went out, to a non-MINI dealer as I recall, and found yourself the near-new car you wanted, at the right price. Probably the most cost-effective way to do it. And I'm willing to bet that, if the numbers hadn't felt right for you, you wouldn't have done the deal you did.

 

Many have rightly pointed out that it’s much easier to get a good car deal when there are multiple dealers in the same region competing for the sale.

It is argued that MINI dealers are few and far between in many parts of the country and thus dealers who don’t have nearby competition are less flexible and often adopt a “take it or leave it” attitude on pricing.

If this is in fact the case today, with MINI sales falling and lots of other competitive brands with nice cars to sell, then maybe it’s our fault that dealers in some regions are so inflexible on price. As has been pointed out by others, if a MINI dealer can sell their entire allocation every month at full price, what incentive do they have to offer discounts?

And there is the rub. If enough people are willing to pay full freight because they love MINI so much, then we can expect to pay full price or let some other enthusiastic motorer buy the car we want for a price higher than we wish to pay.

It's the old law of supply and demand. If demand is there at or near full price, MINI dealers are going to get higher prices.

But something’s fishy here. Rebates and special finance deals are offered to boost sales. Why run a special if you’re selling everything you’ve got at full price?

During Generation I & II, demand was high, supply was tight, MINI was the new, new thing in town, and dealers began to train customers to expect to pay full list, or even over MSRP on fully packed cars.

The only way customers can test to see if the way it was is still the way it is, is to ASK for the deals we want and give the dealer the opportunity to sell us MINIs at discounts.

Also, the power of the internet means that it is possible to engage dealers who may be farther away. Nothing prevents a customer from getting offers from multiple dealers – this can often be done on line – and then presenting those competing offers to your local dealer and saying, “I’m ready to buy from you today if you can get us close to this offer.”

My point is, customers can, and do, influence the selling price of cars. If enough of us roll over and pay full freight, that’s what the price will be for everyone. If we all insist on better deals, if MINI dealers are serious about moving the metal, there will be deals, even in regions with only one dealer.

How far will you go for a deal, and how good of a deal does it need to be for you to make the trip? Your local dealer is hoping, and betting, that you’ll play the only game in town. How are you gonna play your hand?

 

MINI USA has updated current lease offers on their web site. Some cars have "lease cash" which is a rebate of sorts. There is all the fine print available on the site to calculate money factors, residuals, etc., if you are willing to do the math.

Hopefully, for those wishing to purchase instead of lease, incentives are available as well.

If anyone has more current info on special loan rates and/or incentives for purchases, etc. PLEASE POST.

 

 

The MSRP on my MINI Clubman S was $42,680 including the $850 destination charge. Add to that the $65 list price for the MINI folding windshield sun shade the dealer threw in for “free,” and the total list price was $42,745.

The invoice price, including the sun shade, came in right about $39,300.

The dealer sold me the car for $39,459, or $159 over invoice.

The dealer added a doc fee of $80 and a wire fee of $29, increasing the transaction to $39,568 or $268 over invoice.

Then the dealer had to pay my MA’s commission, which was a mini commission because there was so little gross above invoice in this deal. That mini commission ate up most of the $268 gross over invoice.

Since mine was an ordered car, and I took delivery the day after the car arrived at the dealership, there was no flooring interest cost to the dealer. And we can assume that the manufacturer’s allowance for new car prep and delivery covered whatever labor and supplies the dealer provided to prep my MINI for delivery to me.

The dealer planned on receiving money from the manufacturer on the back end, adding about another $1,000, making the amount the dealer got over invoice at least $1,250, before paying sales commission.

The dealer also collected the $925 lease fee and wrote the lease through MINI USA. The dealer earned a fee for writing the lease, adding a bit more to the bottom line profit.

Then there are other manufacturer-to-dealer volume incentives which vary for each dealer, which are dependent on total sales volume and other performance benchmarks, but might add substantial amounts to the value of each transaction at the end of the month, or end of the quarter, or the end of the year. Since these are not known, or knowable, and are variable, it's difficult to put a specific number on this aspect of the deal, knowing there may be money there for the dealer – possibly A LOT of money, or maybe none at all.

What made this deal nice for me as the customer, was, in addition to the solid discount the dealer offered me, and in addition to some nice freebies the dealer added, MINI USA threw in a $2,000 rebate and a subvented below market lease rate and a 65% lease residual which lowered my depreciation costs and my monthly lease expense. HOWEVER, I had to give $925 of that $2,000 rebate back because of the lease fee. And the state got a $7 tire recycling fee and the $345 DMV and another $74 sales tax on the $925 lease fee.

When all was said and done, after paying the fees, I “saved” over 4 grand off of MSRP out-the-door, and got a very favorable lease rate. Since I did not purchase any add-ons and there was no trade, the dealer held onto a slim net profit after back end money.

So why did the dealer agree to give me this deal?

When you walk into a MINI dealership on the first Monday of the month and offer to buy a car, the sales manager has no idea if he’s going to move a lot of metal that month or if he won’t hit the numbers he needs to get the bonus money. This is what makes car deals so complex and tricky.

Your deal may not, of itself, have much or any gross profit on the front end, but it’s a deal in the bank that builds toward the magic number of total units sold that earns the dealership the bonus bucks. The dealer doesn’t want to lose the deal. So, if you hang tough and give the dealer an opportunity to move a unit and thus get closer to a bonus goal, you might just get one of those sweet deals. That’s what happened to me.

My car was delivered on the last day of the month. The dealer needed to sell every car in his allocation to qualify for extra bonus money from the manufacturer. My deal helped the dealer earn that bonus on ALL the cars sold, so all he cared about was not losing money on my particular deal. Higher profit margins on some of the other cars sold that month, plus the bonus money for selling all the cars the dealer needed to sell to earn that bonus, came together to give the dealer a profitable month.

Dealers can’t give everyone invoice, or near-invoice deals. But some of the deals can be down to the bone. A few can even be losers. Timing, research, a little luck, and perseverance can earn you one of those few sweet deals that sales managers are willing to make each month.

Give the dealer the chance to sell you a car at a great price. You just might score a killer deal. Trust me, the dealer will make money.

 

Data is coming in from all the major automobile manufacturers. There has been a solid upswing in leasing these past several years as people who want/need new cars are looking for lower monthly payments on new cars. Also, people like to drive cars under warranty and are seduced by the desire to have the latest tech and features in their rides.

In many markets, used car prices are starting to fall, partly due to the increased flow of low mileage, late model lease returns.

Choices for patient shoppers are on the increase. More great cars chasing fewer customers. Also, lease returns from other great brands are becoming more plentiful, giving MINI shoppers alternatives that should force MINI dealers to be even more flexible when selling against other brands.

Careful shoppers should be looking at improved values on certified pre-owned MINIs. Used MINI shoppers should drive hard bargains when they negotiate for used MINIs. And, of course, all of this has the added benefit of putting downward pressure on new car sales prices.

We should begin to see ever-better deals and even some manufacturer supported financing offers on these lease returns. As interest rates rise, there will be more pressure on manufacturers to offer factory financial support on leasing and financing. However, collapsing used car prices reduce the value of lease returns thus making the high residuals more risky for lenders, so this may work against subvented lease deals and shift the marketing bias toward selling cars through supported below market loans instead of leases.

Law of supply and demand. Make it work in your favor next time you go shopping for a new or used MINI.