I received and interesting email from my Mini dealer today. Essentially it stated that they are low on pre-owned inventory and are offering people above market value for their cars. Anyone ever heard of this type of offer? My suspicion is that it is some kind of sales gimmick but I'm just curious to see what folks think.

 

Gimmick.

 

yup. they are just trying to get u into a new one..

 

I believe that dealerships gain more from used auto sales than new ones. I would think that they are marketing up the cost over MKV is to see if you are a serious buyer IMO. Plus, for them if they start higher, you will settle for a higher price than you normally would.

I had a dealership mark up new MINI's on the lot for $2,000 over MSRP. They eventually offered me the vehicle for $600 under MSRP. Decent, but I went elsewhere for the fact they are so fond of their games.

 

All confirming my initial thoughts... thanks for the input.

 

It's not just a gimmick ... I got a similar letter a couple of months ago, stating they'll give me 110% of blue book on my trade. I did my research before going in, so I knew what blue book was for my year, model, options, miles, condition, etc. I figured for sure they'd low-ball me or pull some kind of shenanigans with the trade, so I really half expected nothing to come of it. But they came back within pennies of the trade-in value that I had researched for my car, and then tacked 10% on top of that as promised. Now keep in mind, I did not tell them before hand what I thought my car was worth, and they still came back with the same figure as I did. I also priced the MINI I wanted online, and there was no mark up on the one they found for me. Everything seemed to be on the up-and-up, so I ended up trading my '07 for a '10 with a few more options and the color I originally wanted. Between the trade and 2.9% financing, I ended up with a brand new MINI for a lower monthly payment.

Yes, they want to get bodies in there to move more cars ... but they are delivering on what they promise on the trades. It can't hurt to at least go in and inquire. Of course you need to know what you have first before going in, and www.kbb.com and www.nadaguides.com are just two places you can go to research. If you don't like what they have to say, you can always say no thanks.

 

Sometimes dealers need to turn over inventory during slow times to keep from having their quota reduced for good times. I don't know if this applies to MINI dealers, but I hear that sales have been slow recently.

 

Just like Ed says, do your homework as to value on yours, and if you might have interest in a new one go in and see what they say. Maybe it will make sense to you.

 

I decided to just continue to pay my car down until I have it paid off. It's an '08 and I bought an Alfa Spider last summer so I probably ought to hold off buying any cars for a while. Thanks folks for all the input. I sincerely appreciate it. Having such an involved owner community makes owning a Mini that much more enjoyable!

 

SCAM!!!!!!!!!!!!!!

 

I believe there was a similar post about this a month ago

 

Not. See my earlier post.

 

While you may have received a good deal (or at least feel you did*) it was 100% unrelated to the promotion letter. These types of promotion letters are just another sales tool most likely contracted by a company that specializes in direct mail marketing and likely sent at random times to different customers. It's just another method for increasing foot traffic and to get warm bodies on the sales lot.

It sounds like the marketing company has come up with a good target promoting idea but in reality it's still just another tool (gimmick) out of the advertising budget.

*If you receive 10% more on trade in but pay full MSRP then you get about the same deal as someone who gets 100% trade then negotiates a discount off MSRP (without the promo letter).

 

They're going to give you 110% of the value of your car?????? Yeah, right. It's a dealer scam.

 

Dealer Scam...........all the dealers do it to get you in the showroom, not just MINI.

Even if they give you a ridiculous deal on the trade-in, they are going to mark up the price of the car you are going to purchase.

The only way this would even work is if you settle on the price of the new vehicle first, then whip out the letter and say,"by the way Mr. Sales Manager, I want above market price on my trade-in plus the agreed upon price of the new vehicle. Here are my keys, go appraise my vehicle"

 

They're not going to, they already did. I looked up the trade-in value of my car at as many sources as I could find before going in, and they were all within a few dollars of each other. The dealer came back with a trade-in value right in the middle of all of them, then tacked on another 10%.

Ok, so how many MINI owners do you know have 'negotiated' $2K off of MSRP? They just don't do it. A few hundred, maybe, but not $2K, especially on '10 models when they're still trying to unload '09s.


Believe me, I walked in there more out of curiosity to see just how close they'd come to what I knew my car was worth, fully expecting that they'd be off by at least 10%. But they hit it on the button, and added the 10% as advertised. There was no mark-up on the price of the new one; no discount either, but we're talking about a 2010 that was still on the boat in October '09. And because it took an extra week for the car to be delivered, I lucked into BMW's 2.9% financing to boot.

I did my homework. Poo-poo it all you want. But please, don't call me an idiot.

 

No one's called you an "idiot". It's just a simple fact you could/would have gotten the same deal (maybe a different way of crunching the numbers) without any promo letter. The dealer is going to make X amount of $'s on the car sale/trade in car sale and having a letter doesn't somehow magically change these numbers for the dealer. He can't take your turned in letter and somehow sell it to make up a "10% loss" of monies (he/she throws it in the trash after you walk out the door). It's all in the paperwork (smoke and mirrors) and auto dealers know every trick in the book to make the numbers palatable for the buyer.

 

I should just let this go, but I can't.

Manufacturers provide incentives all the time. American manufacturers have been living by them almost non-stop for most of this decade. Usually dealers and manufacturers split a percentage of the incentive from the difference between dealer cost and the vehicle's actual sale price. Sometimes they are in the form of a flat-out rebate or other fixed discount, sometimes they take other shapes. This particular promotion is one of the latter. In this case, certain dealers are authorized by BMW to give higher trade-in values, particularly on late-model MINI's. In return, the dealers are compensated by BMW for at least part of the extra trade allowance. Exactly how much I do not know, but it comes in the form of a reduction in the dealer's cost. It's no different than a manufacturer rebate, except that this promotion is/was limited to certain dealers; and rather than being fixed, the actual 'rebate' amount varies depending on the value of the vehicle being traded.

Yes, it works out to the same thing as a discount off of MSRP. However, depending on what you're trading in, you'd be hard-pressed to negotiate that much of a discount under normal circumstances. Like I said previously, show me a MINI owner who's gotten $2,000 knocked off MSRP that they didn't have to eat somewhere else. I will not concede that it is a fact that I would/could have gotten the same deal outside of that promotion. As a matter of fact, if I had gone in a week later, I would not have gotten it. I may have been able dicker a couple hundred off or free bonnet stripes out of them, but not much else, certainly not the kind of deal I did get.

Fact: They quoted me blue book trade-in value on my old car, verified by research I had done before ever walking in the door.
Fact: The sale price on the new car was not a penny over MSRP.
Fact: By the time all was said and done, I paid a hair under $2,000 less than the difference between the two.

I will ask again: once the trade-in value and the MSRP were set, could YOU have negotiated a further $2,000 off the sale price? I know that I could not have. If you can, then you should be on TV. That notwithstanding, I am quite confident in my conclusion that I got a better deal than I otherwise would have. My conclusion is that this offer was therefore not a scam, particularly in light of the fact that I had plenty of time to re-evaluate all the numbers and could have walked away right up to the point that I drove the new car off the lot.

Whether or not all other dealers behave the same, I cannot say. I CAN say that not all such promotions are what they claim to be, and some in fact are just glorified invitations to walk into a dealer and think you're getting a special deal. I CAN say that the promotion I took advantage of was not one of those.

Yes, it is wise to be cautious. You don't have to take my word for it; but neither do you have to immediately discount the offer as a scam. If you have any interest in purchasing a new MINI and this offer/promotion/whatever could be the impetus to pulling the trigger, do your homework, educate yourself on what you're trading and what you want to buy, and hear what the dealer has to say. If it is not completely to your liking, then get up and walk away. I'll say it again, I did my homework. I went in knowing what my car and the new car were worth. I crunched all the numbers and figured out what I should be paying based on the terms of the promotion, and I was fully prepared to leave any deal on the table if their numbers were so much as a pimple over mine. The final sale price was spot-on, and the whole deal was even sweeter because I got a lower interest rate than I expected. That was my experience. If you still think I got scammed, then you go with that.

I have walked this planet for longer than most of you. Being married, riding a motorcycle, and having kids of driving age, I have purchased more vehicles new and used than many of you, through the course of which I have made some educated decisions and a few not-so-educated hasty ones. I have laid out the facts here as I have seen and experienced them. Draw from that what you will.

I will say no more on the subject.

 

[quote=Eds not-so-red MINI;2945985
I will say no more on the subject.[/quote]

Hi Ed,

Hopefully, if you wanted, you would feel ok to respond to this post as I will clearly state my intention as not to demean or challenge how you feel about your car buying experience. Here is what I have learned from my past experiences.

I sold cars for a year and a half and learned a great deal about the business in that time. I used to say that longevity of employment in the car business is like working 10X as long in any other profession.

I was taught that the definition of a good deal in the car business is when a customer feels they received a good deal, regardless of the amount of loss or profit the dealer makes. By that definition you received a good deal as you are clearly passionate about the deal you received.

Having said that there are some constants within the car sales industry. The first is that each dealer will pay the same price for the product from the manufacturer. They will also receive the same incentives to sell their cars, how ever much those incentives are. Having said all of that, there are a couple variables. Each dealership typically has a used car buyer, who is in charge of their own department at the dealership. His/her job is to buy cars at a price that reflects fair market value, knowing that he is constantly being evaluated on his ability to make at at least some money in his/her used car buying department. Some cars are kept for the dealer to sell on their lot but most are wholesaled to other used car buyers who will sell the car on their used car lot. Typically the used car buyer will give a little bit more for a car being kept for sale at that dealership as they will mark it up $2-4K and sell it on their lot. Wholesale cars make the least amount of money as they will go to another dealer who will have to mark them up to sell them for a profit at their dealership. And these wholesale buyers are pretty savy about the going prices for cars or else they wouldnt be in business long. Sometimes the used car buyer will increase the amount they will "buy" the car for as they have shopped the car around and found a specific wholesale dealer willing to pay a slightly higher price. But most often if you see the amount of money offered to you for your trade in go up, it is because they have taken some of the profit from the new car you are buying and put that towards the amount they are giving you for your trade-in.

So, applying this to your purchase I picked up a couple things from your posts that stood out to me. The first is that you were given 110% of the TRADE-IN price for your car. It is good to get above the book value but dealers always have a built in profit between the three values in a typical used car price book. The trade in value is the lowest number, followed by the average loan amount owed on the car, then by the retail price. (Though now some car value books are listing the loan amount at the private sale amount instead.)

So the dealer can afford to give you the amount they did because they will make a profit on the car when they sell it as a used car on their lot. The other option that you had was to sell the car in a private sale. Some people dont want to deal with that hassle but for those that do you can get the best overall deal on your new purchase by selling your car privately and then negotiating the selling price of the new car independent of any other transactions. (Now getting the best price on a new vehicle is another thread all together.)

And probably the biggest variable that each dealer has is the amount of profit they are willing to accept for a car. There are many factors for this number and they vary from day to day, hour to hour, deal to deal. I have seen vehicles sold for a substantial loss before just for the sake of getting rid of them.

For some dealers using the advertisement of giving a 110% for your vehicle is indeed a scam, a gimmick, etc, since these dealers really have NO intention of giving you a fair price on your trade in. But in my opinion I would be more apt to call it a sales strategy. It is a strategy designed to get customers in the dealership. What happens once they arrive is up the the dealership. Car sales is a business and like most businesses, there is supply and demand. For years the demand for the MINI outpaced the supply or it was at least relatively close. That kept the price at the higher end of the scale, pretty close to retail. And of course dealers didnt move much on price since if you didnt buy their car they would probably sell it to the next person through the door. I suspect lately that with the softening of the economy and MINI car sales that there isnt as much demand so you will most likely see more of these types of sales strategies and more of a willingness to negotiate a bit on the asking price in order to continue to sell cars.

Ed, what is most important is that you feel like you got a very good deal. That is fantastic and is the most important part to remember of this whole thread. Sometimes we paint with too broad of a brush. Most dealers who use this strategy are not bad dealers who are distrustful or distasteful, but some are. Most are just trying to get customers in the door any way they can. What they do when you arrive is what distinguishes them as decent or distasteful. I suspect that often our passions about the car buying process are directly related to how we have been treated in the past.

And finally, as a car salesman I always tried to be respectful, helpful and honest, which is why I only lasted 1.5 years in the business. In a contest between who was being less than honest, the customer or myself, I was easily lied to by the customer on a daily basis. Oh the stories I could tell.

Congrats on your purchase Ed!

Cheers,

Aaron

 

That is exactly my point. In some cases such offers ARE scams; all I'm saying is that this one was not. Whether all dealers would have treated me the same I could not possibly know; but my dealer was straight up, and I never would have known if I hadn't gone in to check it out. My trade allowance was about $200 less than they could reasonably price that car at for re-sale. I know, because as late as last week the car was still on their lot.

Yes, I possibly could have gotten a higher trade-in value, but based on my experience I thought that would be highly unlikely (perhaps I'm another one of those like yourself that's just too honest; if my life depended on making buy and sell deals, I will be the first to admit I would fail miserably). In fact when I bought my first MINI at this same dealer just a couple of years ago, it was like pulling teeth to get them to budge on their initial appraisal of the car I was trading. I did get them to add a couple hundred, but it damn near took an act of congress. It was less than what I wanted (though not significantly), but I did the best I could, and left there thinking I got an 'ok' deal. Not great, but I really wanted that MINI, so I went with it.

I am also one of those that does not care to deal with the hassle of selling a car privately. When it's still being financed, between titles and banks and the #%@% DMV, private sales present several major headaches I will gladly let the dealer handle. I am perfectly aware that that precludes me from getting the best possible sale price on a new car and a higher price for an old one, but it's a perfectly acceptable trade-off for me, my time and my sanity. You would quickly agree if you've ever had to endure an encounter with the RI DMV -- absolute hell on earth.

The only reason I keep going off on this is because people keep screaming 'Scam!', when I know it is not necessarily so. And when I try to say that I took advantage of such an offer and received a deal that I am truly happy with, they still try to tell me it's a scam. Well I'm still waiting to hear from anybody who got a better deal on their purchase of a new MINI. I want to hear from anybody who walked into a dealer and got absolute top dollar for their trade right off the bat -- I mean something closer to private sale value than trade-in value -- or got $2,000 knocked off MSRP on a straight buy. As soon as I do, I will humbly ask for some salt to sprinkle on my crow.

Thank you for that, and thank you for the insight.

And may you have a wonderfully happy and joyous New Year.

 

The dealership trying to 'Scam' you is another way of saying the dealer is looking for those uninformed and emotional. If you are smart, have done your research, and know what you are willing to pay, you will not be 'Scamed'. For those who don't have a clue and let their emotions of wanting a new car get the best of them, then they fall prey to the dealership/salesperson.

 

That is absolutely true; but, a clueless buyer can just as easily be 'scammed' with or without a 'promotion'. The only difference is that a few more bodies will stroll into showrooms that would otherwise have been on the fence. But you're also correct in that such promotions will likely raise the emotional level of prospective buyers more than usual, which makes it even more important to do your research before doing anything, whether that's checking it out or tossing it away.

 

Sorry, no offense meant but I get a little chuckle out of this.

 

That's it.

I'm done.

I'm serious this time.



Starting ...

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now.

 

There's one other little factor -- probably not much of one, but....

Since the Cash for Clunkers program, there are few good used cars going across the auction blocks. Accordingly, used car prices are higher than usual and the dealers are competing for the available cars more agressively. Many of the auction companies have added surcharges for whatever they can think of. It could well be that the Mini dealer is simply a part of a larger conglomerate which is having a hard time putting used vehicles on their other lots (how many used cars do you think are appearing at the local Chrysler shop?).

This could be a very truthful offer in hopes of attracting cars from a group of customers who probably take better care of their cars (especially cosmetically) than is typical. You can bet that the dealer is intending to make money on this offer, but he may be willing to allow you to make a bit, too.

Hard as it is to believe, many car dealers are actually hard working honest folks who are trying to eke out a living for their employees in the best way they can find.

Times really are tough out there folks.