Why is the car cheaper with euro delivery?

[drvai]

I was wondering why the price is considerably lower.
Do you pay tax?

How about performance center delivery?

[Technic]

Originally Posted by drvai

I was wondering why the price is considerably lower.

Why is European Delivery Cheaper than US Delivery?

BMW created the European Delivery program to promote sales of its cars in the 1960s. Jonathan Spira wrote an excellent article about the European Delivery program and its history. Although all of BMW's reasons are proprietary corporate matters, one of the principal benefits it brings the company is customer loyalty. Many people who take delivery of a BMW in Europe won´t consider the purchase of a car in any other way.

Many people ask why cars have a lower price when purchased through ED. The reason is that BMW and BMWNA sell cars through ED outside of the usual dealer incentive programs offered by BMWNA to its dealers. US BMW dealers receive incentive payments from BMW NA based on customer satisfaction, or "CSI" scores. Those scores, in conjunction with the number of cars sold, result in incentive payments. BMWs sold through the ED program do not increase a dealer's unit sales and are not subject to the CSI program. Because BMW NA does not pay out this incentive money, they are able to pass along those savings to you in the form of a reduced price on an ED car. The amount of the discount is approximately equal to the potential CSI money a dealer would receive on the sale of the same car through US delivery.

The savings are not a result of different taxes or duties, as many people speculate. The duty on an imported car, whether new or used, is 2.5% of the declared value. In other words, duty makes up about $1000-$1500 of the price a 3-series BMW. Any reduction in value because it is used would not significantly change the amount of duty. Even a full exemption would not fully account for the price savings of ED.

You also can save money through European Delivery because the price is more negotiable with some dealers. Cars sold through ED generally do not come out of the dealer's allocation--in the past M cars and newly introduced models where supply is limited (e.g. coupes and convertibles in 2007) have reduced a dealer's allocation. The net result--a dealer is selling an extra car, rather than one of his allocated cars that he could sell to someone else at close to MSRP, as is the case with US delivery. Not all dealers realize that ED cars are basically bonus sales. Many refuse to negotiate off of the ED MSRP price, or try to explain that there are extra costs associated with ED for the dealer (where there are none). Generally speaking, if your dealer says this, you should look for another dealer. It is routine to pay $500 to $700 above Euro Delivery Wholesale Pricing (which should be provided to you), with no additional dealer fees aside from the typical tax, title and license fees (which vary from state to state). Note that the "Training Service Fee" is not to be charged for ED sales.

In sum, this may save a buyer ~10% of US MSRP, more if any BMW NA or BMW FS incentives are available during your ordering time frame. For one example, during the last two months of 2010 BMW FS offered US buyers 0.9% APR for three-year loans, and a rebate of $1,500 as "Holiday Cash." When combined with an unpublished Steptronic (automatic transmission) rebate of ~$1,400, the savings could reach upwards of ~$7k from the US MSRP on a EuroDelivery 2011 335i.

Lastly, with ED cars that will be leased it is important to check the numbers very carefully to ensure that the residual value is based upon US MSRP, NOT the Euro Delivery MSRP.

http://www.bimmerfest.com/wiki/index.php/ED_Summary

Do you pay tax?

Whatever sales tax your states collects you pay as any other car purchase.

How about performance center delivery?

Other than it is free, what about it?

[I M STIG]

Don't forget, though, that you still have to pay for your trip there and back.

[1sikbmr]

Originally Posted by AwesomeBMW2

Don't forget, though, that you still have to pay for your trip there and back.

+1 flights, hotel and food. things can add up quickly. ED is best planned as a vacation.

[Technic]

For the ultimate savings, ED could be done in about two days or so (east coast)... fly there, pick up next morning, fly back that afternoon.

No hotels, eat in the outgoing plane, at the Welt and at the returning flight for close to free as well.

For somebody not interested at all in the ED experience and in driving in Europe or simply not having a longer time to spend, this could be it.

[X2Board]

Originally Posted by Technic

For the ultimate savings, ED could be done in about two days or so (east coast)... fly there, pick up next morning, fly back that afternoon.

No hotels, eat in the outgoing plane, at the Welt and at the returning flight for close to free as well.

For somebody not interested at all in the ED experience and in driving in Europe or simply not having a longer time to spend, this could be it.

You would be one smelly mofo on the way back. I would do it right, or not at all.

[BMW Fanatic]

Originally Posted by X2Board

You would be one smelly mofo on the way back. I would do it right, or not at all.

[CBS]

The savings paid for most of our 5 day trip for my Dad, Son and me. Great Guys trip.

[boothguy]

The savings are the attractive thing up-front. But the lasting memory of the experience simply cannot be duplicated. Here's a hint: Porsche charges EXTRA for doing European Delivery. I'm with X2Board - do it right or not at all.

[persian54]

can one explain this part better please?

Lastly, with ED cars that will be leased it is important to check the numbers very carefully to ensure that the residual value is based upon US MSRP, NOT the Euro Delivery MSRP.

It's late sorry

[Technic]

Originally Posted by X2Board

You would be one smelly mofo on the way back. I would do it right, or not at all.

I know of guys here that at the time of ordering their M3 they have switched dealers for an extra $200 in savings.

Personally, I'm doing it right just because I want to go back to Germany. however sometimes there is no time to spent just driving around for days. And if for a $1000-$1300 plane ticket I can save almost $10000 by doing a two day trip then I guess that I would need extra deodorant...

[Technic]

Originally Posted by persian54

can one explain this part better please?

It's late sorry

Higher residual (lease)/balloon (BMW Select) = lower payments

Because the ED price can be 7-14% lower than MSRP both the residual and balloon payments will be proportionally lower as well. So a portion of the actual ED savings will be consumed by higher monthly payments.

By keeping the residual/balloon calculations based on the MSRP instead on the ED price the monthly payments become even lower, making ED more attractive as a purchasing option.

I read somewhere that BMW was taken to court just for this by a customer, and it was forced to base the residual/balloon on the MSRP instead of the ED price.

[adc]

Originally Posted by Technic

For the ultimate savings, ED could be done in about two days or so (east coast)... fly there, pick up next morning, fly back that afternoon.

No hotels, eat in the outgoing plane, at the Welt and at the returning flight for close to free as well.

For somebody not interested at all in the ED experience and in driving in Europe or simply not having a longer time to spend, this could be it.

There's also the additional payments you make on the car while not in possession. You need to pay minimum 15 days in advance of pick-up date, plus a minimum 4 weeks for the car to make it back (which can easily be 6 weeks).

So that's approx. 2 months you either are making payments (or paid in full) for a non-existent car . Math can still favor ED even after considering this, all I'm saying is that margins can be a little smaller than anticipated.

Me? I went full hog and put some 4000 miles on mine while in Europe (Alps, Ring, Spain, France). It was worth every damn penny.

[97X]

You only have to about 7 days in advance and BMW makes the second monthly payment to account for the fact that the car is on the water and not in your hands. Admittedly, however, there is a slight bump in the money factor to adjust for this.

[Merlosso]

I look at it this way: I'm going to take a vacation this year anyway. I'm going to buy a new car anyway. The amount saved between the ED price and what I would pay for a car off the lot will cover airfare and hotels (if you consider the difference from MSRP it would be a lot more, but who pays MSRP?). Now I just pay for food, gas, and other vacation related expenses. I come out ahead in terms of cost.

Cost aside, what other vacation will give me the opportunity to drive a brand new M3 through the Alps, Italian Lakes, Black Forest, and the on the Nurburgring? And within a couple of months I'll have that same M3 in my garage.

September 20th can't get here soon enough.

[Technic]

Originally Posted by adc

There's also the additional payments you make on the car while not in possession. You need to pay minimum 15 days in advance of pick-up date, plus a minimum 4 weeks for the car to make it back (which can easily be 6 weeks).

So that's approx. 2 months you either are making payments (or paid in full) for a non-existent car . Math can still favor ED even after considering this, all I'm saying is that margins can be a little smaller than anticipated.

Me? I went full hog and put some 4000 miles on mine while in Europe (Alps, Ring, Spain, France). It was worth every damn penny.

In reality the car exists once it is picked up at the Welt, however the eventual boat trip will make it look like it does not.

[immiketoo]

Plus, Germany gets the money you spend while there on vacation. It boosts their economy no matter what!

[fuddman]

Originally Posted by immiketoo

Plus, Germany gets the money you spend while there on vacation. It boosts their economy no matter what!

I think this correct but I look at it a slightly different way. It may very well be that BMW gets a kickback from the German government for ED cars.
That is to say, the tax money the German government rakes in from ED buyers allows the them to pay off BMW for their ED losses plus a little more while, at the same time, making themselves some money. A win-win for both of them.

[cdickgo]

Originally Posted by Technic

It is routine to pay $500 to $700 above Euro Delivery Wholesale Pricing (which should be provided to you), with no additional dealer fees aside from the typical tax, title and license fees (which vary from state to state).

How do you get the wholesale information? I am assuming that the dealership is not going to want to reveal the european wholesale pricing.

[Merlosso]

Originally Posted by cdickgo

How do you get the wholesale information? I am assuming that the dealership is not going to want to reveal the european wholesale pricing.

Here you go:

http://www.m3post.com/forums/showthread.php?t=427717

[BKMK5]

I did ED and PCD on the M and ED is the biggest c0ck tease ever! Get to drive your new car around on pristine roads, through the twisties in the Alps and then have to part ways with it for 2 months(usually 6 weeks but scheduling conflicts with PCD)

It was an amazing experience and would do it again in a heart beat. Got save 11k off MSRP, spent 3k on a week long trip and had tons of fun.