BMW X2 - Struggling

I’ve been successful in the past at getting insanely good leases on Lexus and BMW, but right now dealers don’t seem to want to move units. The X2 is the most incentivized vehicle for BMW, but I’m struggling to get dealers into the 12-15% off MSRP before incentives with no markup on money factor. I’m in Texas btw. Any tips or dealers?

I am having the same problem on an X5 - they don’t want to play with the none marked up MF. I think you have to wait until end of Nov/Dec so that they become a little more distressed and will offer tax credits.

i would suggest looking at X2 loaners, they have plenty around.

Yep, give it some time.

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You’re not going to be able to walk into any BMW dealer and just get 12-15% off before incentives. It takes the right dealer, patience, and being at the right place at the right time. Start putting out the feelers and don’t be afraid to travel.

Know your numbers and know that this car doesn’t sell that well. I just locked into October numbers (couldn’t make it into the dealership yesterday) per the below. I have to get my trade in finalized but pending that I’m driving off in a x2 loaner. I’ll make a separate post on the share deals forum, but wanted to let you know that deals are out there. Patience, leverage, and negotiation.

MSRP: 44245
Sell price: 35600
Incentives: 4250
Residual: 25113
MF: .00182
DAS: 2000 (includes MN tax upfront, acquisition 925, doc 100, first month)
monthly: 276 / month

Current mileage 4500
Term: 36/10

Not sure where you are in Texas but from my experience Tyler and League City were the most competitive BMW dealers, they both tend to do deals to draw customers out from areas further away.

As others have stated you need to target older stock via cargurus.com, especially loaners/demos. That should bring the best results.

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Thanks League City isn’t crazy far for me. I was able to get 11% off an X2, but now I’m looking at the X1 since there are new incentives this month.

Might want to consider that there is an 11% TOTAL profit margin for most BMW dealers (having nothing to do with incentives).

I’d be interested in seeing the source for this tidbit.

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Profit Margin between Invoice and MSRP is about 6%. AVP (some people call that holdback) is up to 5%. This 5% isn’t automatic though so a dealer could end up with only 4% or even less depending on things they are graded on like if training is completed by staff as directed by BMW. Guaranteed 6 + possible 5 = possible 11% total. There is no further compensation derived directly from the sale of a new BMW. 3 to 4 months out of the year there are performance bonuses (some people call that stair step). With this, if dealership hits objective, you get $750-$1,500 per car however, loaners/fleet/employee/ED vehicles do not get paid out this bonus.

My source is BMW Dealership Management since 2008 (except for 2017 where I was multi brand dealer group corporate management). Those of you who think it’s more than 11% for BMW, please share what calculations you use to get there.

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Can you provide some further insight on loaners? My understanding those are sold to dealers at a discount to begin with for the purpose of leasing them as a loaner

Hello, loaners are purchased by the dealer for the same price as a new car. Favorable BMW FS Select financing is used though, so dealers just make monthly payments on loaners instead of whole car floor planning. Here is where things differ dealer to dealer… write downs. The monthly payment made on the loaner vehicle every month reduces its inventory cost an equal amount so if payment is say $500, in 4 months it’ll cost $2,000 less. Everyone does this part. Some do a further write down like say 1% monthly and combine it with the monthly amount paid to BMW FS to reduce the inventory amount further. This of course reduces the store’s service department profit so not all do this step but, when they do then, inventory cost goes down around $1,000/mo for example (assuming a $50,000 vehicle).

Back before the 5k mileage limitation came into play and no one had to worry about limitations of new car incentive use, loaners and company cars were almost all great deals if left in long enough. Sadly this is no longer the case. The stores with the biggest write downs have the best loaner vehicle deals. Most of us just try selling them for cost or as little of a loss as possible. Rare to make much profit anymore because you can’t keep them in loaner service long enough to get much of an edge in pricing vs a new vehicle. As as example… as soon as a 3 series hits 5,500 miles, it has to cost approximately $5k less than a car with 4,500 miles to equal or exceed the 4,500 mile lease deal. This is not mathematically possible on a loaner (it’s going to be $500-$1,000 less—1 more month’s use). Loaners are no longer a money making endeavor like years past for the used car department.

Head’s up, December 1st leads to yet another change in what we perceive BMW NA’s quest to end loaner and company cars from cannibalizing new car sales. Now it’ll be -7% and -9% residual hit for vehicles over 5k and 7.5k miles respectively up from the current 4 & 6.

Company cars are different. They are auctioned. Sometimes a great deal. Sometimes not. But in years past they didn’t keep them in use for 6k miles and now they pretty much enforce that. Every week there are 250-350 company cars for auction. And every week there are less than FIVE current model year vehicles for sale with under 5k miles. Lots of employees grumble about all these changes because that’s what some of them are used to driving.

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this is very valuable information for those looking into loaners right now, thank you

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Incentive is up 2k from last month, but residual also dropped 4% from last month too. It’s not going to be as good as you think.

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Good news is it doesn’t affect anything under 5k…for now.

yea that was my first thought when I read it.

I’ve always wondered about the tax implication for loaner cars when it comes to dealerships. Probably way over the typical sales or general managers head and more into the accountant and owner. But would think there would be a depreciation schedule they’d be applying to the finances since it’s technically a company vehicle being used for customers and stuff.

But I am not a tax expert, just a small business owner, so not entirely sure if always on the up and up on taxes stuff.

“For now” is the operative phrase IMO

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