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      11-24-2009, 11:04 PM   #1
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How does bmw make money selling an M at 100 over invoice..

Hello folks someone fill me in...

How does bmw make money or afford to stay open selling an m3 at invoice? or 100-500 over invoice.

Thanks!
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      11-24-2009, 11:05 PM   #2
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That's the dealer that's theoretically only making $100 on the car (but dealers have about 5% holdback in addition to invoice that they receive from BMW so they are really making a few thousand).

BMW's cost of making the car is not "invoice."
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      11-24-2009, 11:09 PM   #3
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I'm pretty sure margins aren't what they used to be, especially for the dealers.
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      11-24-2009, 11:09 PM   #4
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im sorry let me rephrase that, how does the dealer make money...

So the dealer gets a couple thousand eventhough they sell at invoice?..

I wonder how much it actually costs bmw to make an m
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      11-24-2009, 11:13 PM   #5
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Quote:
Originally Posted by Boosted335 View Post
im sorry let me rephrase that, how does the dealer make money...

So the dealer gets a couple thousand eventhough they sell at invoice?..

I wonder how much it actually costs bmw to make an m
Yes. ~5% plus whatever financing extras they get (i.e. if you buy the sealant, the LoJack, the wheel/tire insurance, the warranty, etc.).

I don't know how much an M3 costs to make. I'm guessing actual production costs including labor and materials (but excluding R&D) are probably somewhere between 40-50%. This is a totally uneducated guess.
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      11-24-2009, 11:17 PM   #6
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Quote:
Originally Posted by smmmurf View Post
That's the dealer that's theoretically only making $100 on the car (but dealers have about 5% holdback in addition to invoice that they receive from BMW so they are really making a few thousand).

BMW's cost of making the car is not "invoice."
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      11-24-2009, 11:21 PM   #7
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ok so let me get this straight...the dealer actually makes close to 12 percent on a m3?
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      11-24-2009, 11:21 PM   #8
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Quote:
Originally Posted by Boosted335 View Post
ok so let me get this straight...the dealer actually makes close to 12 percent on a m3?
If they sell it at MSRP, that's a good ballpark figure. However, I imagine that many are getting deals near invoice or even under invoice in this market. I bought mine for $1,000's back of invoice.
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      11-24-2009, 11:23 PM   #9
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Thats weird... offtopic but can you believe down here Chevrolet dealers are still trying to get $1000's over sticker on Camaro

Besides the dealers trying to make extra money...does anyone know the reason behind?

Thanks
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      11-24-2009, 11:28 PM   #10
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Thats weird... offtopic but can you believe down here Chevrolet dealers are still trying to get $1000's over sticker on Camaro

Besides the dealers trying to make extra money...does anyone know the reason behind?

Thanks
Things are worth what people will pay for them. If the market will bear over MSRP, then the market will bear over MSRP... just look at the Shelby Mustang GT500, GT-R, GT3 RS, and R8.
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      11-24-2009, 11:43 PM   #11
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BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.
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      11-25-2009, 12:06 AM   #12
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dealers get kickbacks after a certain number of sales... and the more you sell, the more you get back. that's why they can affford to sell cars at very low margins.
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      11-25-2009, 12:18 AM   #13
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Quote:
Originally Posted by smmmurf View Post
I don't know how much an M3 costs to make. I'm guessing actual production costs including labor and materials (but excluding R&D) are probably somewhere between 40-50%. This is a totally uneducated guess.
Perhaps in other markets using other currencies, but not in the US. In the US, profit margin is very tight. In Europe, profit margin is very normal but sales volume sucks. The US market trades higher unit profit for higher sales volume.

In Germany for example, the car costs about 30% more in US dollars. Therefore comparatively to most other markets we're buying new BMWs for a fraction of the cost in those other markets. And yet we still complain???
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      11-25-2009, 12:21 AM   #14
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Dealership does not need to make money by selling car. They make "huge" money by "servicing" your cars.
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      11-25-2009, 05:53 PM   #15
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Quote:
Originally Posted by HappyNDing View Post
BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.
I thought that was only if they received high marks on the buyer evaluation form we submit or via phone interview
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      11-25-2009, 07:30 PM   #16
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Quote:
Originally Posted by py0413 View Post
Dealership does not need to make money by selling car. They make "huge" money by "servicing" your cars.
+1
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      11-25-2009, 09:11 PM   #17
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+1
sorry kids.. the holdback is a common dealer thing.. the survey at the end of the sale, i believe has to do with allocation and dealer bonus type of thing..
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      11-27-2009, 10:36 PM   #18
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Quote:
Originally Posted by HappyNDing View Post
BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.
The latter half of your statement is a little far from the truth in NY/NJ/CT. Really tough sell at couple hundred under MSRP people expect atleast a thousand or two off.
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      11-28-2009, 06:02 PM   #19
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See David at https://www.bmwsonline.com/ for an ED deal that is only few hundred over ED Invoice
After your mini vacation in Europe, take re-delivery at PCD in Spartanburg, SC, then either drive it home or pay to ship it to your doorstep
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      12-01-2009, 12:25 PM   #20
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BMW has never offered holdbacks for their dealers, but they do offer other incentives.
And like everyone else says, the dealer makes money off repairs and service too.
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