Again, dealers arenât hitting their retros so it doesnât make sense to sell at a deep loss; especially when they have a whole year to sell a car before programs are cut.
For example, BMW sets a goal for a dealership at 200 cars for the month. If the dealership hits 200 cars they get $1500 in bonus per car.
Lets say, for example, the dealer is pacing 220 cars for the month.
They can afford to sell cars for an extra $1500 in loss because theyâll be getting that money back via retro money.
Ex.
220 Cars sold for an average loss of $2000
Monthly Gross Loss- $440,000
Monthly Retro Reimbursement- $330,000
Net Loss (Before holdback, finance department profits, etc.)- $110,000
Now letâs say the dealer is pacing 100 cars for the month at the same loss
100 Cars sold for an average of $2000 loss
Monthly Gross Loss- $200,000
Monthly Retro Reimbursement- $0 (Missed sales goal)
Net Loss (Before holdback, finance department profits, etc. )- $200,000
Thatâs almost double the loss BEFORE accounting for money they arenât getting back from holdback, lost profits from not being able to sell any finance products on the 100 less cars they sold, and money they arenât getting back from their service department for cars not being on the road as well. On top of this, youâre asking them to be even more aggressive? Even if they went an extra $500 below their usual pricing (Which only makes a $13 payment difference, nothing to get excited over), that would be an extra $75,000 in losses
So again, unless manufacturers Improve programs or Lower dealer target goals so they can meet their retro bonuses, donât expect dealers to blow their brains out. Theyâd rather hold onto inventory until we see better days
As Iâve said before, our deals have not changed at all⊠We are doing the same aggressive deals that we have always been doing. Please stop commenting on my thread unless youâre looking to buy a car.
BMW programs have been extended through June 1 (nothing changed). Checking on a potential 2 payment waiver for current BMW leasees and will update on that soon.
1 of the 2 lowers the effective payment for 36 months (since 1st payment is waived in the due at signing)
2nd one is credited to your account when the bill is due, so the first time youâd actually make a payment is in 60 days
