[naiza3k]

Hoping someone can clarify this for me, I've seen a lot of post about people getting 10-15% off on the MSRP price and typically when I go in to purchase I negotiate based off of the MSRP price.

When the dealer is talking to me, they are referring to the invoice price. What's the difference between the MSRP and Invoice? hoping someone can clarify this.

[Waise]

The MSRP is manufacturer's suggested retail price which is the price an automaker recommends for a car. Invoice price is lower than MSRP. It's the dealer's cost. The price the dealer pays the manufacturer for the car. Even when dealer sells at Invoice Price they still make money because of all the other savings and perks they get from manufacturer.

[jmciver]

What he said... Also, many of us on the forum, including myself, negotiated by % off MSRP vice the common negotiating tactic of $XXX above invoice. I chose the % off MSRP method as at the time when doing my research I was having a hard time finding reliable invoice numbers to base my negotiating strategy and numbers - the MSRP numbers were at least consistent. As what was mentioned in the post above, invoice today is not "true invoice" as even if the dealer sells the car at invoice they still make money.

When my negotiating was done, I actually got my X7 for below invoice according to many invoice pricing sources I found. But I know the dealer still made money or else I would not have been sold the car with the terms I negotiated .

[-JLT-]

Originally Posted by jmciver

What he said... Also, many of us on the forum, including myself, negotiated by % off MSRP vice the common negotiating tactic of $XXX above invoice. I chose the % off MSRP method as at the time when doing my research I was having a hard time finding reliable invoice numbers to base my negotiating strategy and numbers - the MSRP numbers were at least consistent. As what was mentioned in the post above, invoice today is not "true invoice" as even if the dealer sells the car at invoice they still make money.

When my negotiating was done, I actually got my X7 for below invoice according to many invoice pricing sources I found. But I know the dealer still made money or else I would not have been sold the car with the terms I negotiated .

can u tell me what % off msrp you got it for? tia

[Next Level Auto Brokers]

invoice is 5-6% depending on your region

your target on these should be 9% before any rebates nowadays with the lack of inventory

also discount only is good if paired with base money factor of .00086 or 1.9% financing for up to 60 months.

[Eternalthinker]

It really comes down to your region and which model year you are looking at. Here in the Bay Area, the dealers are asking for $50k ADM on the G63s. Supply and demand. For the X7, reach out to several dealers to get a feeling on what can or cannot be done. I got 11% off when the X7 first came out, but have a long-standing relationship with my dealer.

[Wild Blue]

Am about to sign papers for 10% off MSRP, plus an additional $5k of discount incentives.

[icemanjs4]

Originally Posted by Wild Blue

Am about to sign papers for 10% off MSRP, plus an additional $5k of discount incentives.

What market are you in? Also how does that work, at 10% off MSRP isn't that below invoice?

[Wild Blue]

Originally Posted by icemanjs4

What market are you in? Also how does that work, at 10% off MSRP isn't that below invoice?

Hey - as my info block says, am in Alaska. I see you also drive a ZHP. Cool. Dealer i used is east coast, though, can PM you details.

As others have said in this thread, dealers get other back end incentives from BMW, and can sometimes sell below invoice.

[SSM5]

If you pick one up from dealer stock between the 12th - 17th, there is a $1000 extra rebate, see below

*$1,000 offer is only available during the BMW New Beginnings Sales Event – February 12, 2021 through February 17, 2021 – and valid on eligible vehicles leased or purchased from participating dealers and delivered February 12, 2021 through April 30, 2021. Eligible models include All MY2020, MY2021 and MY 2022 BMWs. MINI vehicles and BMW Pre-Owned/CPO vehicles do not qualify. Retired vehicles, BMW company vehicles, Demonstration vehicles and any other vehicle that has accumulated 5,000 or more miles also do not qualify. This offer cannot be used for vehicles previously ordered or delivered before February 12, 2021 and is only valid on delivery of in-stock vehicles. Offer valid to BMW New Beginnings Sales Event participants and their family members residing within the same household. Offer valid on final negotiated lease or purchase price and may be combined with other applicable BMW offers that are available at the time of purchase, except, that it may NOT be combined with other redemption code offers from previous events. It also may not be used toward tax, title, destination and delivery charges. Only one redemption code per vehicle may be used. Only valid at participating dealers. Please see your participating BMW Center for complete program details.

[NOVA99]

Use Carbook Showroom. Little known website that provides build & price for all mfg and provides side by side analysis of MSRP vs. Invoice. It is better than mfg websites with accurate pricing.

[icemanjs4]

Originally Posted by Wild Blue

Hey - as my info block says, am in Alaska. I see you also drive a ZHP. Cool. Dealer i used is east coast, though, can PM you details.

As others have said in this thread, dealers get other back end incentives from BMW, and can sometimes sell below invoice.

Yeah I LOVE my ZHP, and can't imagine ever parting with it. I even got it through European Delivery so it holds a special place in my heart.

BTW, I'm doing a custom order through the Individual Program so we can get a red X7 (surprised this isn't a standard option). Not sure if that affects ability to negotiate below invoice.

[stockguru]

Originally Posted by icemanjs4

Yeah I LOVE my ZHP, and can't imagine ever parting with it. I even got it through European Delivery so it holds a special place in my heart.

BTW, I'm doing a custom order through the Individual Program so we can get a red X7 (surprised this isn't a standard option). Not sure if that affects ability to negotiate below invoice.

I did an individual order and got below invoice. This was in may 2020 for July delivery. As others mentioned, they still make money Below invoice given incentives. Whether dealers will do it on custom build individual depends on their allocations available and what your specs are. The higher the msrp you are building the more likely you're able to get that done. The dealer will make a little more on the additional options and it's also harder to find the car with those specs in existing inventory.

[bjcarls]

Originally Posted by icemanjs4

What market are you in? Also how does that work, at 10% off MSRP isn't that below invoice?

Don’t think this is normal. 10% off + $5k. IMO, realistic for most people is probably 6-8% off msrp. A lot depends on market, willingness to travel/negotiate, give up perks at local dealership, etc. and some don’t share corporate discounts, military, etc that normal people can’t get.

Edit: msrp and such

[stockguru]

Originally Posted by bjcarls

Don’t think this is normal. 10% off + $5k. IMO, realistic for most people is probably 6-8% off invoice. A lot depends on market, willingness to travel/negotiate, give up perks at local dealership, etc.

10% off msrp. Not 10% off invoice. Big difference. 10% off msrp is possible. I don't think you will get 10% off invoice unless the dealer is going out of business and liquidating.

[naiza3k]

Originally Posted by stockguru

10% off msrp. Not 10% off invoice. Big difference. 10% off msrp is possible. I don't think you will get 10% off invoice unless the dealer is going out of business and liquidating.

Haven't been able to get 10% off msrp here right now. We picked up a new x7 xdrive50i not too long ago and now want to switch to the m50i but I'm not willing to pull the trigger unless it's a deal here with a local dealership. Would like to take advantage of the tradein credit to offset the taxes on the new ride.

[Wild Blue]

Originally Posted by bjcarls

Don’t think this is normal. 10% off + $5k. IMO, realistic for most people is probably 6-8% off invoice. A lot depends on market, willingness to travel/negotiate, give up perks at local dealership, etc.

I got 10% off MSRP from David Aviles (BMW David) at Catonsville BMW. You don't have to stay in your local market if discount is your focus. Dealers and brokers can ship nationwide if you like. Heck, I bought from Maryland, and am in Alaska.

Incentives come off the back end, and functionally, are independant of any deal you strike with your dealer. Doesn't come out of the dealer's pocket. Whether you qualify for $2k or $5k or whatever of incentives. Many sales agents try to blur this, and make you think they're giving you a good deal, by telling you a price that includes incentives, which isn't costing them anything. Always negotiate a sales price BEFORE incentives.

Invoice pricing is a bit nebulous, and depends on the configuration, but generally will be 6-7% below MSRP. It would be highly unlikely to get 6-8% below invoice, as that would be 12-15% off of MSRP. You're not going to get that, unless it's a leftover on the lot from previous model years that the dealer can't get rid of.

[Wild Blue]

For those who are curious about my $5k incentives, they're readily available for anyone who meets the criteria. These incentives haven't changed for many months.

$2500 APR discount, BMWFS
$1000 loyalty/conquest discount
$500 discount for Pentagon Federal Credit Union or military members. (is $3,250 if not using BMWFS)
$1000 rebate for BMWCCA members (best deal going. Everyone should take advantage of this)

Heck, if someone has done an ultimate driving experience, you could even get another $1,000 on top of that

[icemanjs4]

Let me summarize.
Invoice price is about 6-7% below MSRP.
On an ordered car, can someone explain to me how they can convince a dealer to go 10% below MSRP (not including incentives)?
Theoretically that would leave the dealer with a -3% to -4% profit (loss).

Sales people get a $200-$300 commission as well, further increasing that loss.

[Wild Blue]

Originally Posted by icemanjs4

Let me summarize.
Invoice price is about 6-7% below MSRP.
On an ordered car, can someone explain to me how they can convince a dealer to go 10% below MSRP (not including incentives)?
Theoretically that would leave the dealer with a -3% to -4% profit (loss).

Sales people get a $200-$300 commission as well, further increasing that loss.

Again, as multiple people have stated, invoice price is not necessarily the dealer's actual price of the car. (as is often assumed) BMW corporate often gives back-end incentives to dealers to sell cars for multiple reasons. What these are and how much they are, are unknown to us public buyers, but that's how you can often get some below invoice. (which, exact invoice itself is not publicized to buyers)

Again, dealers don't sell cars at a loss. So if they sell one below invoice, as is my case, they're getting enough back-end incentives that they're still making at least a little money.

If you can set up a situation with a dealer or broker, where you know exactly what car you want, either ordered or off the lot, and they don't have to do any work other than drawing up the paperwork, they could be more willing to do a min-run deal for you, which may be below invoice.

[naiza3k]

Originally Posted by Wild Blue

I got 10% off MSRP from David Aviles (BMW David) at Catonsville BMW. You don't have to stay in your local market if discount is your focus. Dealers and brokers can ship nationwide if you like. Heck, I bought from Maryland, and am in Alaska.

Incentives come off the back end, and functionally, are independant of any deal you strike with your dealer. Doesn't come out of the dealer's pocket. Whether you qualify for $2k or $5k or whatever of incentives. Many sales agents try to blur this, and make you think they're giving you a good deal, by telling you a price that includes incentives, which isn't costing them anything. Always negotiate a sales price BEFORE incentives.

Invoice pricing is a bit nebulous, and depends on the configuration, but generally will be 6-7% below MSRP. It would be highly unlikely to get 6-8% below invoice, as that would be 12-15% off of MSRP. You're not going to get that, unless it's a leftover on the lot from previous model years that the dealer can't get rid of.

Can someone provide me with David's contact? I think I might consider trading my car in at carmax or somewhere locally here in Denver and purchase through David.

[Auricom]

Interesting topic, one that I provide with historical context that should hopefully provide forum members insight on BMWNA changes to dealer compensation that start in 2017 and calculating invoice pricing.

For many years, the BMW pricing guide with invoice pricing was made available online. Back around 2017, that information was suppressed and a guide was authored to calculate approximate invoice price absent of previous pricing guides.

2017 TLDR;
Calc invoice pricing for base price of vehicle. BASE vehicle MSRP x 0.93 or 7% off
Calc invoice pricing for vehicle options. BASE option MSRP x 0.92 or 8% off

While this calculation of MSRP is slightly outdated and increased vehicle cost over the past 3 years - it's reasonable to estimate invoice pricing around 8% and that 10% off MSRP isn't an unreasonable starting point.



I can't recall the forum rules for cross positing from other sites but here is the copy-n-paste discussion:

From and credit Bimmerfest - tim330i

"Staring with model year (MY) 2017 BMW is changing how invoice pricing and dealer compensation works. This has changed the calculations for US invoice pricing and European Delivery pricing, the new calculations are below. Read on to find out why or just jump down to do the calculations. Use our 2017 BMW pricing and ordering guides for MSRP pricing.

Back story on why BMW invoice pricing is changing
Last year BMW NA CEO Ludwig Willisch announced that changes that were coming for dealer compensation. His new plan is intended to move BMW from the bottom of the pile in customer satisfaction rating, especially around service. Under the new plan dealerships can earn up to a 1 percent bonus based on 4 criteria. This was BMW NA's way of providing incentives to dealerships to provided a better customer experience and customer loyalty. That 1 percent has to come from somewhere and we now know it is coming out of the invoice price of the car.

For MY 2016 and prior years the difference in price between MSRP and invoice was 8 percent for the vehicle and 9 percent for options and packages. Staring in MY 2017 the discount between MSRP and invoice is 7 percent for the vehicle and options and packages being 8 percent. In effect BMW has taken 1 percent out of the front end of the deal putting it in the back end of the deal as a carrot for dealerships to chase.

This means we will see deals closer to invoice pricing as dealerships push for volume to hit the back end sales targets. BMW has also increased the holdback (more back end money) from 5 percent of vehicle base cost to 5 percent of the sticker price, giving dealership more room to deal on highly optioned vehicles. What happens in the real market is yet to be seen. As 2017s start hitting the show room stay tuned to find out what Bimmerfest members are getting for deals.

BMW US Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets) multiplied by 0.93
+ MACO fee $500.00 (flat rate applied to all dealers)
= Base vehicle US BMW invoice price

To figure the invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Training fee of $180.00
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00

BMW European Delivery Invoice Pricing calculation
Base vehicle US MSRP (from pricing sheets below) multiplied by 0.95 gives you the base vehicle European Delivery price. For those wondering, BMW has redueced the (ED discount from 7% to 5% starting in 2016).

Multiple the base vehicle European Delivery pricing by 0.93
+ $475 fee (this started in 2016 and applies to all dealers)
= Base vehicle European Delivery invoice price

To figure the European Delivery invoice price of your BMW as configured add -
+ Option and packages (anything you can add to the vehicle) multiplied by 0.92
+ Destination and handling charge - Currently $995
= Total vehicle invoice price +/- $10.00

Big thanks to Bimmerfest member Ninong and others for helping to get this figured out."