What Does “Overhead” Have to Do With it?

I’m on the BMW USA website and it’s quoting me 2 totally different prices for the same vehicle. Can this be possible?  I decided to pick these ads apart.  Here goes:The ad on the left is $369 per month with 10,000 miles per year and $3,844 cash due at signing excluding tax, title, license and registration fees. How much do I really have to come up with if I want this exact car?If the sales tax were based upon 7.375% the monthly payment tax would be ($979.70), acquisition fee tax ($53.47) and down payment tax ($202.81) would run you another $1,235.98. New plates would run about $235.00, Doc fee $75, Inspection and Tire fee another $22.50.Total out of pocket with $5,412.48.The ad on the right is $458 per month with 10,000 miles per year and $3,783 cash due at signing excluding tax, title, license and registration fees. How much do I really have to come up with if I want this exact car?If the sales tax were based upon 7.375% the monthly payment tax would be ($1,215.99), acquisition fee tax ($80.84) and down payment tax ($184.38) would run you another $1,481.21. New plates would run about $235, Doc fee $75, Inspection and Tire fee another $22.50.Total out of pocket with $5,596.71Why is there a $100 difference with the Acquisition fee? Is it $725 or $825?Is this exact car even available on a dealer’s lot? The ad doesn’t include heated seats in the build or metallic paint. What are the chances of finding a BMW in the northeast without heated seats, probably very slim?  With 13 exterior colors choices and only 2 of them being a no charge option, what are the chances I’ll be paying for the color I want?

I called BMW Financial Services and asked about the difference between the 2 offers. They said:  “We don’t post the ads, we just fund the contracts.”  Then they transferred me to BMW North America, and I was told, “that’s a question for BMW Financial Services.”  I explained that BMWFS didn’t know, and that’s how I got to them. I was then transferred again to a supervisor who told me that, “the dealers are all independently owned and it’s up to them as to what they want to sell the cars for.” The supervisor did point out the fine print of the ad on the left, that said dealer contribution may affect terms and actual selling prices may vary.

Btw, I backed into both deals and the ad on the left is selling the car at a $1,475 discount off MSRP. The ad on the right is selling the car at $825 above MSRP. Both ads are Many Thousands of Dollars away from what should be the best deal.

 

That’s the statement a Mercedes Benz Sales Manager just told a customer of mine who entered his dealership armed with my Do-It-Yourself (DIY) Dealer Report® . This would be his 3rd car he was going to buy from this Mercedes dealer. Just as he has done in the past he sat down with the salesman and worked up numbers on a 2014 E350 sedan. He was given a price and asked if this was the best they could do. The salesman said, “I might be able to save you another $5 or $10 per month but we are already being aggressive and it’s a new model”. In the past the customer has always believed it and wrote up the deal. This time though he reached into his pocket and pulled out my Do-It-Yourself (DIY) Dealer Report® . He asked the salesman, how come you’re asking me for $840 per month when I can get the same car for $667 as he handed him my report. The salesman says, let me guess… Tommy Taylor. You’re probably like the 20th person this week to come in with his reports. I’ll get my Manager. Now the Manager comes over.

Manager: Sir, I understand you have some numbers from Tommy Taylor but you have to realize Tommy doesn’t sell Mercedes.

Customer: I know Tommy doesn’t sell them, but he will find a dealer who will sell it to me at this price if you won’t.

Manager: At numbers like this we wouldn’t stay in business for long.

Customer: His report shows you’re still making $1,000 on the car.Manager: But Tommy has no overhead, he works out of his house and probably only has a phone bill. We have all of this to pay for.Customer : That’s not my issue. Can you match the number or do I have to go back to Tommy?Manager: I’ll split it with you; we are about $170 per month apart. I can save you another $85 per month. Do we have a deal?

Customer: No, I need you to match it this time. I’m sure you made out well on my last few cars.

Manager: Well if you go back to Tommy I know you’ll have to pay him $500 to get this done so give us $14 per month and we have a deal at $681.

Customer: That’s fine but if I went back to Tommy its only $450 because I bought this report.

Now you don’t have to be a rocket scientist to see this customer just saved $159 per month and over the course of the next 36 months will have saved $5,724. But what’s more powerful than the amount of money he saved is that he was confident in what he was telling and showing the dealer with my Do-It-Yourself (DIY) Dealer Report®. This levels the playing field in the negotiation process. Now you know as much as they do and in some cases more. He let them know they were still making $1,000 on the car instead of the $6,200 they were planning on making. The customer told me even though he enjoyed the process and finally for once he had gotten the best deal, next time he’ll just pay the $500 and have me do it!