Where are you getting this figure? I’m not saying you’re wrong, but it’s been beaten into my head for years that new car sales is lucky to break even, used cars, parts and service is where the bread and butter is at.
Apparently @joeblogs, who used to be a salesman, is surprised at this too.
Or the owner is hiding the 30% so he doesn’t have to share it with the new car sales staff 
It includes all the profit from the finance office.
@mp11477 Edmunds citing NADA.
https://www.edmunds.com/car-buying/where-does-the-car-dealer-make-money.html
Fact is that if every single dealership sold every single car at sticker price they would all go out of business. The money is all on the back end nowadays, and even if they are “losing” money on your deal it doesn’t account for the 7 to 9 other deals out of 10 they made where they made money, sometimes quite a bit off of unsuspecting customers.
I always say, if it’s on the internet, it’s true…well maybe.
IMO it’s a bit misleading to lump F&I profits as new car sales. Dealers could sell the same number of vehicles but if everyone paid cash and declined all the extras, those profits would disappear.
10% usually for jeeps i have found to be a big threshold. So depends on the brand. 10% might be about 2k under invoice.
I suspect dealers make good money on leases in general; it’s setup for them to win as understanding the lease terms and parameters takes effort above and beyond what most people want to work. Also, look at the tactics employed - they want to work you to a payment and then specify what “down” that will take. They can also manipulate fees and money factor as extra profit factors - and most simply won’t see that.
Comparatively, buying outright is simple: it’s purely down to selling price plus fees and potentially F&I products.
Now, I would also imagine that the selling profile of a dealer could be very different say as an example, BMW vs Honda, again with BMW probably writing more leases. I may be completely wrong on this one but it’s a theory. Maybe a lease driven dealer makes more money…
Whatever happens in a single transaction, overall, the dealer makes money. I’ve not seen a dealer as a registered charity yet 
John
Always request your deal is worked on a four square, that ensures the best price. 
The simple response would be. Do you want my business?
Should I walk away from this? I mean I know its bad compared to all the other deals that people on this forum have gotten but I don’t know if I should even try to renegotiate or just walk away. I have other cars and two other bmw dealership in mind since its only a couple of hours drive.
Charlotte NC 28217
2018 BMW 320i 10k miles/36 months
MSRP: 40,400
Discount:3,000
Rebates:3,750 (2,000 lease cash, 1,000 graduate, 750 loyalty)
MF: .00196 ( yeah i know)
Downpayment: $3500
Monthly: $359 all taxes, tags, and fees included.
I mentioned I am eligible for
Lease cash: $3,000
Loyalty: 750
Graduate: 1,000
Fleet: 500
OL Test Drive: 1,000
I told them I wanted 3,000 pure dealer discount before any incentives with base MF but they wouldnt budge. They told me they will do 3,000 dealer discount with marked up .00196MF. I said sure I may be okay with, assuming all my incentives are good. When I mentioned all the incentives, they started telling me almost all of the incentives can be stacked, that the lease cash is only 2,000, that the 3,000 discount already included the corporate fleet when I specifically asked for 3,000 discount before incentives, that the test drive OL cant be combined with other programs, that the corporate fleet incentive cant be stacked with other programs either.
So they are “honoring” the 3,000 dealer discount but only giving me 750 loyalty, 2,000 lease cash, and 1,000 graduate rebates.
We have been back and forth for a while but that quote was the last one and they are telling me that they are at the end of their rope. I kinda of feel like this just isn’t for me.
Please let me know what you guys think. Thanks.
Walk away. Also ask for more than 3k dealer discount next time.
Time to hit the lead gen tools. Edmunds/Truecar and start e-mailing everyone that reaches out. Run your LH calc with optimal numbers and wait till end of month. You should get an automated e-mail 2-5 days from the dealers to earn your business. Reply back with a stock # and say I want $x drive off and $y per month with tax. Let them run the financial gymnastics to get you in the car.
Yeah that dealer sounds pretty terrible, they are trying to scam you out of allot of incentive money, time to move.
Must be one of the Hendrick dealerships. I am not a fan either. I bought my Z4 from the dealer in Greenville SC and my M3 from a dealer in TX and did Performance Center Delivery. If you can wait to order a car and do it that way, you can buy from any dealer in the country.
Some BMW specific tips:
Invoice can easily be calculated here:
https://www.bimmerfest.com/news/917430/calculating-bmw-invoice-pricing-for-my-2017-models/
I have heard their holdback is 5% of MSRP (though they don’t call it that). It’s something like 4% of MSRP, plus some weird quarterly additional 1% bonus (I have no source for this).
As mentioned, you can do a Performance Center Delivery on any ordered BMW. It’s free, and fun, if you have the time. Otherwise it’s a good negotiating tactic to remind the salesman that they are competing nationally. I’ve also heard you can take delivery at any major port (though if you’re in NC, the SC performance center is probably closer anyway).
Actually calculate out your desired discount and monthly ahead of time. Sometimes 10% off can be “too much” (no options 2 series for example).
For what it’s worth, I’m on my 5th BMW, and the initial offer has always been absurd. I then have to counter with something like:
“I can easily get 10% (or whatever) off a brand new one by going to salesmen on enthusiast forums and taking performance center delivery. That would put me at $xxx a month and then I get the exact options I want. If you can do $xyz a month, with no money down, I’ll come sign the paperwork right now.”
Dr. O and RobC2,
Wow thank you so much for that information. That actually sounds amazing.
My lease ends at 8/22 so I dont know if I have time to order but I will definitely try that for my wife’s car.
So, how do I go about beginning that process? Once I have built the car, how do I pick the best dealer?
Also, assuming its too close to do the PCD for myself, I may be willing to drive to Greenville, SC. Do you still have the contact from the dealership?
Also, how do you return your car at the end of your lease if you do the PCD with a dealer from far away?
I’ve never actually had to do it. I’m usually emailing a few local dealers at once and, after I reply with that paragraph, have always been able to get at least one to come back with reasonable numbers.
I have done PCD just for fun before, but through a local dealer. For east coast delivery, they schedule orders for 12 weeks (I think it’s like 6 weeks just on the boat), but would be faster for the SUVs. You don’t have to contact them directly. It’s just a checkbox the salesman puts in when doing a custom order and BMW kind of takes care of it all for you.
If none of your local dealerships will work with you, I would actually try and contact one of the BMW SAs in the marketplace here, otherwise bimmerfest.com and bimmerpost.com both have market place forums where you can ask for sales folks (I’ve seen them advertising there). I imagine a custom order with PCD is just a few minutes of paperwork and data entry for them, so why not go for a quick minimum profit sale?
I have been told by my local dealerships that since you are leasing through BMW FS, you can turn the lease in at any official BMW dealership, though I can’t say whether or not that was just BS to get me to come in.