bigigg

How can a dealer sell a car for 15-20% without any incentives? If "invoice" is roughly 7% how can they sell for 20% off.. how are they making any $$. Are we all getting ripped off? Is "invoice" just some BS thing a salesman uses to make us think we got a good deal.. And from what I understand the salesman is making a percentage of the profit of the sale. Sell a car for 20% off wheres the profit come from?

drsaab

There were many posts that showed $3500 winter dealer cash , so 7% to invoice, 3% holdback, and another $3500 back of that = 15-20% on sedans. The wagons don't have the $3500.

that is how they sell at that price and make money, move inventory, or even break even. Plus there is incentive of $ for moving so many cars a month. those last 3-4 cars at $1000 loss may end up in a $30-40k bonus for the dealer for a whole month.

simple math.

Now lets get back to the battle!

GregTR

They can't.

The difference between MSRP and invoice is 7%. But that invoice price does not include regional advertising or port prep fees which can be as much as 1% and will depend on your region. In dense areas like the west coast the fees could be lower as there are more dealers sharing the expense while in smaller markets a couple of dealers have to pay for all of it.

There is also holdback on these cars which is money the dealer gets quarterly from and is 3% of MSRP. It is meant to offset flooring costs which is interest dealers pay on loans for as long as they hold teh car on the lot. If a car sells off the truck or stays on the lot for less than a month it's basically free money. If the dealer is sitting on a car for 4 months unable to move they will probably burn some of this money. Now that interest rates are low they get to keep more of it than before when interest rates were much higher, it simply cost the dealers more to keep cars on the lot.

MBUSA is giving $5k to dealers on a new E-class sedan or coupe during the winter sales drive.

So theoretically on a $60K W212 there is about $6k between holdback and profit plus the $5k winter cash which is $11k so $49K is what the car really costs the dealer. They can sell the car for $49k and not be in the red.

If you're a Mercedes Club member, or you're a previous MB owner or a USAA member, or an ABA member or a AMA member or your employer participates in the fleet purchase program you can get even more money off, as much as $3500 or as little as $500. Some of these programs are stackable and some aren't. Since I don't qualify for any of them I don't know the details.

But let's say you qualify for the $3500 and you can get the $5000 winter cash and your dealer gives you the car for invoice price and you drive it off the truck so they give you the entire holdback, you're looking at $45,500 for a $60K vehicle. That is 24% off. This is what I think the theoretical maximum discount that can be achieved when all the stars align, the dealer is taking a beating and you're a member of a special group that the general population isn't. Again, this is not the norm nor the average discount attainable. It is the theoretical maximum and 99% of the deals won't even come close to it.

If K-A has some other insight how people will be able to get 30% off in a couple of weeks, I'm all ears. Saying "I read some got 25% off" is not evidence, it's BS.

GregTR

Beat me to it! And +1 on the sales volume bonus. If you're one of the lucky few that end up buying the last one of the cars at the end of the month that the dealer needs then you can get a car at a net loss which is still an overall gain for the dealer. Again, we're talking about stars in perfect alignment and everything working out just perfect. This is not how it works out 99% of the time.

T.H.Carrera

guys most of these discounts like usaa, winter certificate, conquest, loyalty, are all from MB which means dealer still gets their money. so when a dealership is giving 15% off does not mean they lost any money, this NEVER 99.99% of time does not happen unless dealership owner is buying for himself, family member etc.

T.H.Carrera

Greg , pick your car up and posts pics already!

GregTR

You see, now THAT hurt!

Planning on getting her on Tuesday as I'm still hoping for a miracle discount on the wagons for December. It's a long shot but if I can save another $1k by waiting 3 days I'm all for it.

E Classy

cool stories, bro's

1. the auto industry is booming
2. profits can be negotiated out of both the dealer and the manufacturer pools
2. these wise guys bundle everything in their "MSRP" - holdback, advertising, etc. in addition to the cost of production
3. the dealer makes the most profit on servicing and financing, not on the sale
4. they don't care about you, they are looking to close - if you think you have a good relationship with your car salesperson you are delusional and are being taken
5. dealers pull out all the stops to extract as much cash from your wallet as possible during the car buying process - they will lie, cheat, and steal
6. if you are well informed and are willing to negotiate effectively, you can get deep discounts off of the already inflated and fictitious MSRP on any model

that being said, if you have the money and don't care about negotiating, then all of this is irrelevant. disclaimer: i got about 10% off for my ordered E250 when it first came ashore on the US. the dealer tried to back out of our previous negotiations sensing that there were other buyers on the line inquiring for a test drive after it appeared on their online inventory. it was scummy, but i held firm on our deal. he did not give the full discount that others here have reported getting at the time. overall, i am satisfied with the deal but realize that i could have been more astute in my negotiations.

threeMBs

As far as I know, there's a $4K "winter" deal on E350 sedans (not $5K, but could be wrong). In any case I just picked up last week a 2014 E350 Sport sedan (MSRP exactly at $60K) for $49.5K before taxes and fees. This is $10.5K off on a $60K MSRP car, which is exactly 17.5% off. I know I could have gotten an other $500 off at most, but I wanted a "special" delivery and it had to be that same day, so could not play waiting games (for only $500). Having said above, as far as I know no one else at that specific dealer (I know a few sales people and a manager there) got anywhere close to 17% off on 2014 E350 sedan.

GregTR

#3 is what a lot of people forget. Average F&I revenue grew by as much as 9% to over $1,300 per sold unit. That is a LOT of money that most people don't even think about in their car buying experience. And this is another reason why telling someone "I got X% off MSRP on my new car" is just half the story.

I'm not really sure that 4 and 5 are true. Sure, we're not buying a new car every day, it's not a relationship that you would think needs TLC as chances are the sales person you worked with will be long gone the next time you buy a car. I bought 3 VWs from the same sales guy in a row working with the same GM. I also ran 5K races with the sales manager as social friends and "talked cars" on several occasions. I never felt he was out to get me or cheat me. I bought an Audi from the sales manager that I bought VWs from when he went over to the Audi dealer. Again, I never felt like he was taking me for a ride. If you don't want to build relationship with your sales person that is fine but I still think there are genuine good in people and you can find it if you're looking for it.

I also dealt with shady dealers who I'd never go back to. But overall I'd say I've met more legit and reasonable sales staff than shady ones. Times are changing and they know that while I might not buy another car from them for the next 3+ years or maybe ever again they can still build a relationship and word of mouth advertising. I still send people to my VW guy even though I haven't bought one from him in over 6 years. I also wrote positive reviews about sales people who I dealt with but ultimately didn't buy from because they were worthy of it.

Maybe I'm naive, maybe I'm lucky maybe I just don't know what I'm talking about...

drsaab

My dealer mb of Alexandria va has Black Friday with 10k off 2014 e class 20k off 2013 s class and 6k off 2013 c class. #eastcoastpricing

GregTR

MB of Walnut Creek is giving close to $12K off without any haggling right now on a car with MSRP of $59,805. that is EXACTLY 20% off. I purposefully requested a quote on one of their cheapest E-sedans as I felt giving $13k off on it would be the most difficult given the difference between MSRP and invoice being the smallest. K-A might exaggerate for effect and I'm still willing to bet money on 30% not happening any time soon on an E-sedan but this deal is legit as far as the asking price goes. It's not $13K as the Black Friday ad claims but pretty close to it:



If you're in Cali, this is definitely a sweet deal.

GregTR

I have sent them another inquiry saying that it wasn't quite the $13K their ad offered and this is what I got in response:


I called her up and it turned out that it's a flat 20% off MSRP regardless of price so the more expensive it is the better the deal, but only 5 cars at this price. She also said it is part of the MB national Winter Sale Event. She also told me they can't deliver cars outside of California and mentioned that their rates are competitive due to the fierce competition that is in California. "One of the benefits living in the state". Her words, not mine.

E Classy

i wonder if they have a giant inflatable wiggle thing setup on the front lot/lawn, also. just goes to show how much margin there is on these cars. what do they cost to make, $20k?

aeggroup

I'm a member of ABA and have fleet discount, which is $4K for E class. My dealer said that I can't combine winter sales event money with ABA. Is it really true ? Does anybody know ? Thanks.

BenzBee

How much money should I expect to get off an E550 if I were to custom order it? The dealer has one they can let me customize in the allocation (the last one ). I am guessing $4,000-$5,000 off? I qualify for the ABA and MBCA discounts.

aeggroup

You can't combine MBCA with fleet.

fintail

I'd imagine one could easily get even more than 20K off a leftover W221 - dealers stuck with those right now as W222 are trickling in can't be pleased. In about a year or so resale values for the 221 model run will be plunging, too.

For sure there are big deals in CA - so many dealers to compete. I spent a week in LA 2 weeks ago, and was amazed at the huge amount of base model E350 and 528i on the roads - all low/no down <500/month leases I bet.

And maybe to cut down on future whining, if anyone has a huge 30% off claim, just ask to see censored paperwork. Like the dbags say, pics or it didn't happen.

Dema

I wish BMW dealer do price match. Anyone has a positive experience getting MB quote and bring to BMW and get same sweet deal fro 535i?

GregTR

LOL! While they are substitute goods they're not the same stuff. Plus the dealers' hands are sort of tied to whatever the manufacturer sets the invoice price at whatever dealer support they can throw at the vehicle. It's not like the BMW dealer can collect the non-existent dealer cash from BMW USA. But as someone posted it earlier, both brands can have incentives and both brands will discount, it's just a matter of finding the right one at the right price at the right time.

Dema

My bad, I just realized they sell products from different manufacturers. We so used to all retailer accept competitor coupons and do price match, so it is hard to realize it is different for cars. Although Audi dealer asked me for papers from MB when I tried to negotiate better price. Or maybe he wanted just to buy MB for himself.

victort

granted my deal is on a C class and not the E, i was able to get about 30% off my sticker price brand new with 7 miles it back in 2010. So it is possible to get anywhere between 25-30% fairly easily

instantfob

Not the same but definitely got closer. BMW have seen my deal contract through my dealer rep. They have responded with more dealer support.

I am picking up a 328i for my co-worker on Friday morning. Do you need me to find out for you?

PM me

BenzBee

How do the fleet discounts work behind the scenes? Is MBUSA reimbursing the dealers the discount behind the scenes - i.e. does the discount come directly from MBUSA? When we bought our BMW we got the BMW CCA discount which came directed from BMW NA.

GregTR

I added the highlights for effect.

"Possible" and "fairly easily" are not the same thing.