Are too many newbies expecting a unicorn-type deal?

After reading hundreds of posts over the past couple of months, my initial observation is that a lot more folks expect dealers/sales people to offer them a unicorn-type deal on their first try of negotiation.

I am going to use BMW deals as an example. From what I have read on LH and by my own research, the consensus is that a 10-12% pre-incentive discount can be easily had on a new car, 15% on a new car that has been sitting on a dealer’s lot for a while, and up to 20% off on a loaner. Does it mean everyone is going to get the same discount? Of course not.

What some folks tend to forget is that dealerships are in the business of maximizing their profits. However, some don’t want to do the legwork to help maximize their savings.

To all newbies out there, make an effort to understand how leasing works. There is a ton of information on this forum. A simple search and review of past deals will provide you with a baseline of what is possible. However, remember that incentives, residual value (RV) and money factor (MF) could change from month to month. Hence, when comparing deals, take all these factors into account.

There are a lot of factors at play to help achieve a great deal, some of which include:

  • Finding the “right car” (instead of just payment shopping)

  • Timing (end of the month/end of the quarter/end of the year)

  • Location

  • Dealer’s inventory

  • Dealer’s motivation to move a particular car

I am curious to hear what some of the industry folks and brokers have to say. Have you (brokers) noticed an uptick in prospective car buyers asking for an unreasonable % off on a car, just because “John” got that unicorn deal at the end of the month/end of the quarter?

I am looking for a healthy discussion.

3 Likes

Short answer, yes.

That’s why we’ve pretty much all adopted spreadsheets for the deals so they know what we can offer upfront.

I won’t even do Bmw deals for people anymore bc of unrealistic expectations. Not worth it, they just try to play one broker off another.

As much as I don’t want to, but may have to start charging a retainer…

12 Likes

I love this approach. I have seen more and brokers go that route.

1 Like

Yeah and people still think they can get another $2000 off :rofl:

8 Likes

Unless someone is willing to put in the time/effort that you brokers do, don’t expect to land a unicorn.

Several hundred dollars spent paying a good broker is money well-spent.

4 Likes

I agree, but people also don’t realize that due to the market, the time of year, inventory, demand, whether the sky is green or purple, brokers may not be able to get you a “unicorn” deal either. I know that Chris and I personally would not recommend a deal that is horrible, and if someone wants something that is just not going to work well, we’ll tell them what it’ll be, but not recommend it. Some cars, especially in some locations, sell really, really well on their own, and dealerships are not motivated to discount them all that much. Similarly, different times of the year (a good example is now vs. end of the year), there are reasons a dealer may or may not be motivated to stretch things a little thinner.

YES! I’m sorry, but there are a lot of people who comet to us with completely unrealistic expectations, we put in the work to try to get them the best deal possible, and then the disappear or don’t want what is possible. We can’t make magic; as I noted above, part of pricing is market-dependent. Texas is not as competitive as it is in the northeast or in California, but at least it has lower doc fees than other places. The tax in Texas is one of the worst in the nation, and people just don’t think about that or the impact of it.

We have unfortunately wasted time (a lot of time) lately, or people are way too unrealistic that we have also very much toyed with charging retainers. We do this on top of having full-time jobs, too, so this is our personal time that gets eaten up.

One thing people need to realize as well is that a “unicorn” deal may include incentives that not everyone has or is eligible for when shopping. Example: buyer 1 is shopping a BMW and only has (or may not even have) conquest. This buyer is also located in Texas. Buyer 2 has loyalty, an OL code, college grad, and something else that may be stackable at the moment. Buyer 2 is located in California. These leases likely won’t even come close to comparing to each other because of the tax difference, loyalty (remember it’s $3,000 on some cars), etc. The market also dictates the discount, and California is generally higher volume and yields higher discounts. It’s that simple.

3 Likes

I can’t imagine why people would expect a unicorn… :slightly_smiling_face:

That is why this site exists and is popular, right? Cheap lease deals. So one would expect people who just discovered this site and decided to participate thought they could get a great/unicorn deal. Then reality smacks them… sometimes very slowly.

17 Likes

Like myself, I thought these deals with a bit of time invested would be acquired - not easily - but without a lot of frustration. After being on this site for a few years I saw great deals come and go as fast as they came. The time it takes can lead to a lot of frustration. Brokers are paid for a reason and I think newbies know that these deals can be had but just don’t understand the undertaking that it takes to acquire them. Also, I’m guessing here, but since brokers are in the business I’m sure they become acquainted with many dealers over their tenure making them much better at what they do…’maybe that’s a case? Or maybe they have other ways to acquire these great deals, either way they get them. I myself have the time to put into a back and forth with dealerships for months if I have to but even still I’m thinking of hiring a broker. I’m rambling.

1 Like

The posts in the “wanted” thread make me shudder at the thought of what some of the brokers/dealers who are active on here must get in their inbox.

I think one of the things that contributes to unrealistic expectations is location, and it’s also the hardest variable to change. So many of the unicorn or even “good” deals on here come from just a few parts of the country. People not in those areas aren’t going to be able to get the same deals - it doesn’t matter what magic words you use in your emails or how much you know about mf, incentives, holdbacks, or whatever, you’re still not going to get the same deals. So then you have to add $1500 or so to cover a broker and shipping.

3 Likes

You hit the nail on the head. When I look at deals posted by fellow hackers, I always look at the incentives that were applied. With BMW, loyalty is $2k while conquest is only $1k. That is a difference of $27 and change per month over a 3 year lease.

2 Likes

I get a fair amount of customers who reference leasehackr but aren’t actively a part of the community. They say things like “I can find better deals on leasehackr” and stare at me blankly when I ask if they can show me the contracts on there they want me to match for the specific vehicle they want. Other internet customers get upset because “I can’t get me calculator to work so what are you hiding?”

Information is great if you know how to use it. Oh and I was also accused of marking up a .00010 MF on a 2019 HRV last week because “that’s what slimy dealerships do!”

7 Likes

Think of it this way, too: the 7 and 8 series both have $3,000 for loyalty (for 2020s). The 7 series has $1,000 for conquest, and the 8 series has no conquest money available, so the difference can be even bigger.

Part of my point was, though, aside from incentives that are available, the discount is different in different markets, too. There are about 15 BMW dealerships within a 15-20 mile radius of downtown LA. In the DFW area, there are 5 dealers, and the furthest are 50 miles apart from each other. While the LA metro area has about double the population that DFW does, it has 3 times the amount of the dealerships…and that’s within a smaller radius. They have more competition, so they cut prices more, among other things.

And by that point, it usually isn’t worth it, unless there’s a REALLY big price difference. Think about it – every 1% on a $50,000 car is $500, so while in Texas we may be 3% or 4% more expensive/less off than a car in California, by the time you pay for shipping, it’s going to cost more, or the same!

People assume that every single car in the inventory is designated for write off.
Out of the 7 BMWs I have leased … only 1 was unicorn status worthy.

Unicorn situation happens when one is ready to snipe it that very second.

3 Likes

exactly this.

You need to absolutely realize it’s a unicorn deal, then sign. You won’t get to sleep on a unicorn deal.

2 Likes

Your dp suggests that you are a slimy dealership!!
jk
I find it more frustrating that people don’t understand that incentives always don’t scale up with MSRP. A 3k incentive on a 30k car would need to be 6K on a 60k car to get similar payment to MSRP ratio. But that rarely happens.
Im active on askcarsales too and its interesting to see the perspective from salesperson side too. The kinda of shit they get from people, deservingly or undeservingly, is still amazing.

Not long ago, someone wanted feedback on a deal on a BMW loaner they were working on. I don’t recall the exact numbers but I believe they were already close to or at 20% off MSRP before incentives. One responder suggested they ask for a bigger discount. After reading that comment I kind of shook my head.

How greedy are some folks? If it weren’t for this forum, some wouldn’t even know you could lease loaners below a certain mileage.

LH has become somewhat of a double-edge sword, IMO. It shows us what is possible, but then everyone wants the dealer info so that they replicate that unicorn deal.

4 Likes

You have to blame that one guy who scammed the dealer into 29% off before incentives on a loaner 5-series

2 Likes

PM me the dealer info :joy:

Cool, just because you are here and there are many experts/brokers here, I just want to know the reasonable or expected information for BMW x3 x30i:

  • What’s the expected discount in CA during Jan/Feb 2020, before any incentives?