Quote:
Originally Posted by aas5
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.
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Based on my research on how rebates/incentives work, the dealer does benefit directly from them. As I mentioned, the incentive is the manufacturer (BMW in this case) giving the dealer the incentive/rebate (i.e. cash) that is a direct profit to the dealer for the sale of the vehicle. Additionally, legally the dealer must give the entire incentive to the buyer as well. So for example, if the incentive is $3000, the dealer can't offer the buyer $1500 off MSRP (thus boosting the dealer profit), but must offer the entire $3000 incentive off MSRP. So, the more incentives a buyer is qualified for, the more "cash" the dealer will get from the manufacturer if the sale goes through. My question is more strategy based.... If I offer "12% off MSRP" which is pretty agressive, will I not even get a response. But if I offer "12% off MSRP and I am qualified for $4250 in rebates" as my initial offer, will the dealer be willing to negotiate (or even accept the deal) - it is all about the nuances as I prepare to negotiate the best deal I can. But as I mentioned, conventional wisdom seems to be that you should not even mention incentives until AFTER you get a fixed price - but it seems to me that offering a price combined with qualified incentives may be a better tactic. Of course, YMMV, but it is nice to get insight from those with more experience in this area....
To your point about time of year wrt how willing dealers are to offer better deals, that is a variable definitely at play and is what it is I guess. Although, the $4250 in incentives that I am qualified for based on the Jan 2020 update is the highest I have seen thus far (which surprised me admittedly). I am in the DMV area, with a lot of dealers within a 50 mile radius around DC. But I plan to reach out to dealers within a 500 mile radius, specifically targeting high volume dealers, in an effort to get the best deal.