Discounts on new M3/M4?
Discussion
Snowyark said:
Do we think there is any chance of a 0% finance deal coming anytime soon?
I would say we are 3 years away from that.The only reason they did it on the E9* was because it was about to be replaced by the F8*
Impossible to say what will happen in the future but 14-15% off a factory order and 4.9% APR seems very reasonable.
I don't think BMW need to go any lower to shift them.
DarylB90 said:
Snowyark said:
Do we think there is any chance of a 0% finance deal coming anytime soon?
I would say we are 3 years away from that.The only reason they did it on the E9* was because it was about to be replaced by the F8*
Impossible to say what will happen in the future but 14-15% off a factory order and 4.9% APR seems very reasonable.
I don't think BMW need to go any lower to shift them.
Those in the know also won't touch pre LCI cars, with their ride/handling issues (the one I had for a day was truly awful....couldn't believe it!).
Deals have got to represent value....it's fair to say the M5 deals have spoiled us all!!
Max Maxasson said:
BMW need to import less F80 M3s...this sort of disorderly discount marketing is bad for everyone except the factory.
Unless you buy at the max historical discount or thereabouts - factory needs to churn them out and they need shipping to markets that will take them, even at a discount.nickfrog said:
Unless you buy at the max historical discount or thereabouts
But the knock on effect is all the way down the market. Even if you buy cheap, the second hand value drops like a stone especially early days. The importer doesn't contract to buy that many M3/4s from the factory that buying 10% less would make much difference, but it would boost the value and prestige if buyers had to struggle to find a new car to buy or factory order.Max Maxasson said:
But the knock on effect is all the way down the market. Even if you buy cheap, the second hand value drops like a stone especially early days. The importer doesn't contract to buy that many M3/4s from the factory that buying 10% less would make much difference, but it would boost the value and prestige if buyers had to struggle to find a new car to buy or factory order.
Think this is what Porsche are doing for some models and it seems to work, but I guess they are a lower volume producer ?Max Maxasson said:
But the knock on effect is all the way down the market. Even if you buy cheap, the second hand value drops like a stone especially early days. The importer doesn't contract to buy that many M3/4s from the factory that buying 10% less would make much difference, but it would boost the value and prestige if buyers had to struggle to find a new car to buy or factory order.
But that isn't necessarily in BMW's interest. Depending on the profit margin they still make even with the discounts, reducing the volumes sold by reducing discounts may not be in their favour. Besides, their interest is in selling new cars (and generally finance too), not the value of used cars people want to sell on, in fact lower used prices come trade in time is better for them as they sell more finance. mark_m135 said:
But that isn't necessarily in BMW's interest. Depending on the profit margin they still make even with the discounts, reducing the volumes sold by reducing discounts may not be in their favour. Besides, their interest is in selling new cars (and generally finance too), not the value of used cars people want to sell on, in fact lower used prices come trade in time is better for them as they sell more finance.
The higher the discount a UK dealer gives above a fairly low threshold level equals decreasing profit...even with volume bonuses.High discounts means low trade in values which makes the owner less inclined to swap and generally dissatisfied with the brand.
Low trade in values also makes a model look less desirable...If its a bread and butter lease car, no one is that bothered within reason, when its one of your Halo models, well thats not so good for the brand.
I don't know what BMW UKs contract is for M3/4 but its probably around 1300 cars a year. If all the dealers can sell is say 1200 cars a year you end with dealers having un-sold pre-registered delivery mileage cars on their lot which is exactly what there is now. Great is you want to buy...rubbish if you want to sell and a dealer cuts you off at the knees with his trade in value because he has already has M3/4s he can't quickly sell
Its all good for the factory and the importer, not so good for dealers who ought to be making £10K per M3/4 rather than giving most of it away and it stands to get worse for existing owners if the market oversupply increases.
Max Maxasson said:
The higher the discount a UK dealer gives above a fairly low threshold level equals decreasing profit...even with volume bonuses.
High discounts means low trade in values which makes the owner less inclined to swap and generally dissatisfied with the brand.
Low trade in values also makes a model look less desirable...If its a bread and butter lease car, no one is that bothered within reason, when its one of your Halo models, well thats not so good for the brand.
I don't know what BMW UKs contract is for M3/4 but its probably around 1300 cars a year. If all the dealers can sell is say 1200 cars a year you end with dealers having un-sold pre-registered delivery mileage cars on their lot which is exactly what there is now. Great is you want to buy...rubbish if you want to sell and a dealer cuts you off at the knees with his trade in value because he has already has M3/4s he can't quickly sell
Its all good for the factory and the importer, not so good for dealers who ought to be making £10K per M3/4 rather than giving most of it away and it stands to get worse for existing owners if the market oversupply increases.
Depending on the level of profit to start and the level post discount. Take it very simply: if they sell 100 cars at 1,000 profit they make 100,000. If they cut the discount and only sell 50 cars but at 1,500 profit they only make 75,000. Which would they prefer? Obviously these random figures are pulled from the air but they demonstrate the basic idea. Economics basically says you produce and sell as many as you can up to the point there is 0 profit on the last one you sell. Beyond that you sell another and make a loss, so you stop. It really is a case of selling as many as possible up to the point you make a loss on selling. High discounts means low trade in values which makes the owner less inclined to swap and generally dissatisfied with the brand.
Low trade in values also makes a model look less desirable...If its a bread and butter lease car, no one is that bothered within reason, when its one of your Halo models, well thats not so good for the brand.
I don't know what BMW UKs contract is for M3/4 but its probably around 1300 cars a year. If all the dealers can sell is say 1200 cars a year you end with dealers having un-sold pre-registered delivery mileage cars on their lot which is exactly what there is now. Great is you want to buy...rubbish if you want to sell and a dealer cuts you off at the knees with his trade in value because he has already has M3/4s he can't quickly sell
Its all good for the factory and the importer, not so good for dealers who ought to be making £10K per M3/4 rather than giving most of it away and it stands to get worse for existing owners if the market oversupply increases.
I take your point about trade in being less desirable, but I think more and more people are leasing anyway so they don't really care a great deal, the dealer doesn't care a great deal and so it will carry on that way I think
mark_m135 said:
Depending on the level of profit to start and the level post discount. Take it very simply: if they sell 100 cars at 1,000 profit they make 100,000. If they cut the discount and only sell 50 cars but at 1,500 profit they only make 75,000. Which would they prefer? Obviously these random figures are pulled from the air but they demonstrate the basic idea. Economics basically says you produce and sell as many as you can up to the point there is 0 profit on the last one you sell. Beyond that you sell another and make a loss, so you stop. It really is a case of selling as many as possible up to the point you make a loss on selling.
I don't know what the dealer margin is on a new M3/4 but if you can get £10K discount on a new one then the probability is high that this amount is coming out of the dealers profit...if a model has trouble selling (think M6) then BMW UK will chip in and a strong finance deal is likely to be available...but I doubt this is happening yet for the M3/4.If you start multiplying the number of cars sold by the profit margin at list it becomes a whole different number...even if you sold 10% less cars, dealers would still be way way better off.
When I bought my first E46 M3 they were in short supply and I was lucky to find a factory order slot and paid list for the car. I pxed it early (less than two years) for another one simply because I was offered such a high px for it.
This is how cars like the the M3/4 should be sold - its how Porsches used to sell back in the day.
There are a few del mile cars on the BMW AUC site for £49K that I bet you could buy for £46K easy. Thats a bad sign for a £62K car.
I see your point, and without knowing the margins it is hard to get into the details. You have to assume a dealer will sell a car for a profit if they can, or if they have to get rid, or they get a bonus to offset at a loss to shift it. If they are able to take a 15% hit on the price, it is either overpriced to start meaning they have a huge mark up or it is because they make more in bonuses etc. selling them than they lose on the car. Otherwise they won't do the deal.
I don't see why it matters either way, everyone wants to feel they have got a good deal and giving discounts make people feel that. It just makes me think that the MRP is way over what the dealers think the cars are worth, limiting supply would potentially increase the prestige, but BMW are in the volume game really so I don't know why they would do that. Frankly, I hope that come the end of Q3 there will be some cracking deals so I can look at getting myself one
I don't see why it matters either way, everyone wants to feel they have got a good deal and giving discounts make people feel that. It just makes me think that the MRP is way over what the dealers think the cars are worth, limiting supply would potentially increase the prestige, but BMW are in the volume game really so I don't know why they would do that. Frankly, I hope that come the end of Q3 there will be some cracking deals so I can look at getting myself one
If anyone wants me to put them in touch with a very reasonable read (ready to do an amazing deal) salesman at a dealership please PM me.
Got my M6 GC through him recently, and I know everyone offers serious discounts on my car, but my chap's deal was by far the best, and my day job is negotiating
Got my M6 GC through him recently, and I know everyone offers serious discounts on my car, but my chap's deal was by far the best, and my day job is negotiating
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