[aas5]

Originally Posted by jmciver

So I have a negotiating question regarding incentives based on the last few posts... I have read in multiple places that when negotiating, it is always best to negotiate the final price of the car BEFORE bringing any incentives/credits/rebates to the table. But since those credits are a direct profit for the dealer (essentially cash directly from the manufacturer to the dealer) wouldn't it be good to use those incentives in parallel with negotiating the initial offer price?

For example, BMW currently offers 4 basic credits for new car sales: Finance/Lease, Loyalty, Military, and College Graduate - each with a certain monetary value that is profit for the dealer. If a buyer is qualified for more credits, which means more profit for the dealer regardless of the final sale price, wouldn't the dealer be more willing to offer a higher percentage off MSRP?

In my case, I am eligible for 3 of those 4 credits, which this month equates to a total credit of $4250. So my initial offer to a dealer might be: "I want 10% off MSRP and I am eligible for a total BMW credit of $4250" (I plan to finance, not lease, but I would not mention that yet at this point in the negotiations). 10% off MSRP is on the higher end of what people seem to be getting. But I would think a dealer would be more willing give to a higher percentage off MSRP due to the credits I am eligible for (which I believe is higher than your average buyer). Am I off in my negotiating logic?

I don’t think there is any difference. Incentives are publicly disclosed so both you and the dealer should know what they are. I am also not sure if the dealer benefits from the incentives but I may be wrong. I would focus on getting the largest discount off MSRP and then roll in your incentives. I usually call 5-7 local dealers to get quotes and also 2-4 leasing companies, get a sense of best possible discounts in the market and use that as a target for my deal. I benefit from being in the NY area where there is a lot more competition so you may not be able to do as well. FWIW, I negotiated an 11% off MSRP + incentives on my ordered 2020 x7 M50 at the end of December. I think it will be difficult to get the same deal now because many dealers are most aggressive in December as they are trying to maximize the total number of cars they sell in a fiscal year to get additional incentives. It is worth a try.