[B_M_VV]

This is a purely hypothetical scenario, as discounts and rebates change from time to time. Not sure if this has been discussed, as I find it difficult to get right keyword to search this in the forum.

If a fresh colleague graduate ($1000) from a USAA family ($500) that owns a BMW ($1500) qualifies for financing ($2000), and he finds good dealership that gives $5000 (10% dealer discount) for a MSRP $50,000 X3 before he shows OL code ($1000), he would be getting total $11,000 off in discount and rebates.

If his home state has low fees (DMV, tax, doc, etc.) and allows trade-in sales tax offset, will it be good for him to change X3 every year or even every half a year instead of to lease, provided dealership can give him fair trade-in?

What's a realistic expectation of average first year depreciation rate (%) of X3?

[supersebbo]

Originally Posted by B_M_VV

This is a purely hypothetical scenario, as discounts and rebates change from time to time. Not sure if this has been discussed, as I find it difficult to get right keyword to search this in the forum.

If a fresh colleague graduate ($1000) from a USAA family ($500) that owns a BMW ($1500) qualifies for financing ($2000), and he finds good dealership that gives $5000 (10% dealer discount) for a MSRP $50,000 X3 before he shows OL code ($1000), he would be getting total $11,000 off in discount and rebates.

If his home state has low fees (DMV, tax, doc, etc.) and allows trade-in sales tax offset, will it be good for him to change X3 every year or even every half a year instead of to lease, provided dealership can give him fair trade-in?

What's a realistic expectation of average first year depreciation rate (%) of X3?

I don’t know how it is in USA but you might find there are early termination fees or interest charges to pay if you end the purchase agreement early.

It’s not unheard of for this to work, but typically the car loses most of its value in the first year and you don’t hit the sweet spot until 18 to 24 months. 20% in the first year in not uncommon.

[m3_08]

i'll keep it simple: by your scenario you get 20% off MSRP for new one. In 3 days when you try to trade in you will get an offer 25% off MSRP because dealer wants to have 10-15% profit on used cars.

only if you get ferrari or porsche exclusive you can drive for 6 month and sell at premium.

[afshawnt]

Are you saying if you qualify for all of those every year?

Yes the first year it's doable, but every half year not exactly. College rebate is a one and done, you won't be able to use it again bi-annually (unless you enroll and graduate in another college program). USAA will be able to be used, but only once annually not bi-annually.

Finance credits, loyalty, and drive event codes are highly variable, and the ones for this past quarter were great and made for some great deals, but these all occuring together is less common than you think. Loyalty is not a sure thing, there may be finance credits of a lesser amount. I'll say that drive event codes are fairly common though.

I do this type of thing often, if you want to do it then be prepared to constantly watch BMWFS pricing and incentive strategy, model releases, as well as the used car market. You have to strike at the right time. Sometimes that is 6 months, 9 months, 10 months, or 2nd yr.

I knew someone that did something with ED many years ago, it worked since he planned on going to Europe anyway, but ED pricing has changed a lot.

[B_M_VV]

Originally Posted by m3_08

i'll keep it simple: by your scenario you get 20% off MSRP for new one. In 3 days when you try to trade in you will get an offer 25% off MSRP because dealer wants to have 10-15% profit on used cars.

only if you get ferrari or porsche exclusive you can drive for 6 month and sell at premium.

So if the person is at NH or OR (no sales tax, DMV and doc fees about $300-$400 total, according to internet resource) and sells car to private party (assuming deals at market value) every year, is 20% MSRP off enough to make this strategy viable?

[B_M_VV]

Originally Posted by afshawnt

Are you saying if you qualify for all of those every year?

Yes the first year it's doable, but every half year not exactly. College rebate is a one and done, you won't be able to use it again bi-annually (unless you enroll and graduate in another college program). USAA will be able to be used, but only once annually not bi-annually.

Finance credits, loyalty, and drive event codes are highly variable, and the ones for this past quarter were great and made for some great deals, but these all occuring together is less common than you think. Loyalty is not a sure thing, there may be finance credits of a lesser amount. I'll say that drive event codes are fairly common though.

I do this type of thing often, if you want to do it then be prepared to constantly watch BMWFS pricing and incentive strategy, model releases, as well as the used car market. You have to strike at the right time. Sometimes that is 6 months, 9 months, 10 months, or 2nd yr.

I knew someone that did something with ED many years ago, it worked since he planned on going to Europe anyway, but ED pricing has changed a lot.

I see, the college rebate is practically one-time thing, while USAA and BMWCCA are once per calendar year.

So it seems this works only if all factors swing to the best-case scenarios (including the home state location) and the person can sell used cars at market value each year.

What has changed to European Delivery? I am just curious (X3 is not qualified anyway).

[jjrandorin]

Originally Posted by B_M_VV

So if the person is at NH or OR (no sales tax, DMV and doc fees about $300-$400 total, according to internet resource) and sells car to private party (assuming deals at market value) every year, is 20% MSRP off enough to make this strategy viable?

No,

Unlikely that all of those would stack first of all. Second, first year depreciation is likely 20-25%.

3 year RV is STATED by bmw as 59% for 36/10 but its more like 52-54%.

There is almost never going to be a scenario where one can buy a new "regular person" car, and trade it in, and not lose money.

[B_M_VV]

Originally Posted by jjrandorin

No,

Unlikely that all of those would stack first of all. Second, first year depreciation is likely 20-25%.

3 year RV is STATED by bmw as 59% for 36/10 but its more like 52-54%.

There is almost never going to be a scenario where one can buy a new "regular person" car, and trade it in, and not lose money.

Thanks for the numbers!

As the goal is not to drive for free, it seems there is a narrow run path under total 20% off MSRP situation.

Simplified calculations (tax, doc fee, acquisition, etc. are not included):
1) Lease: 59% RV means annual lease payment is 14%, or 11% w.r.t. MSRP assuming same 20% off MSRP discount/rebate is achieved.
2) Cash buy with minimum financing to get the financing rebate, in this way APR is not critical: With 20% MSRP off, if the car can be sold with less than 30% loss it matches with lease cost on paper.

Of course for cash buy there is a significant opportunity cost, but if the car can be sold at 20-25% loss it should be fine, because 5-10% annual gain for that cash is not guaranteed unless the person is a professional investor. Also if APR is low then it can offset some of the opportunity cost as the person can then keep majority of the cash and pays interest.

[sor]

Just going from the gut it could break even once, probably, if everything went perfectly. I highly question getting a 10% dealer discount on top of all of those discounts stacking.

Practically speaking I think it would be a pain to switch cars every year. I think of the effort I put into accessorizing and customizing the car, the work to order and haggle with the dealer, the break in period, etc.

[sor]

Just did an online appraisal of my X3, which I got 13 months ago. Edmunds says trade in is 74% of the original MSRP.

[jjrandorin]

Originally Posted by sor

Just going from the gut it could break even once, probably, if everything went perfectly. I highly question getting a 10% dealer discount on top of all of those discounts stacking.

Practically speaking I think it would be a pain to switch cars every year. I think of the effort I put into accessorizing and customizing the car, the work to order and haggle with the dealer, the break in period, etc.

"invoice" on a BMW is roughly 6.5-7%. The deal the OP is proposing would require a dealer to sell at 3% under its invoice cost, or put another way, assume the dealer was one of the 10% of dealers getting the maximum 5% holdback, AND willing to give almost all of that to the purchaser, AND that all of those items stacked.

The basic "unicorn purchase" as it were. Not impossible, but in order for a dealer to go that deep it would need to be a car that was sitting, that they needed to get rid of for "reasons".

So, MAYBE get close once, on a left over lot bunny, assuming that all of those incentives stacked, which I am not sure they do. Even if they did, that deal would only happen once if it ever got close to happening at all.

(note, totally possible to buy a car under invoice, into holdback. Less possible for a dealer to do that and give all those discounts. Most dealers would likely say "no thank you, we are not that hard up for any sale".)

Its more a math exercise than an actual possibility

[sor]

Originally Posted by jjrandorin

"invoice" on a BMW is roughly 6.5-7%. The deal the OP is proposing would require a dealer to sell at 3% under its invoice cost, or put another way, assume the dealer was one of the 10% of dealers getting the maximum 5% holdback, AND willing to give almost all of that to the purchaser, AND that all of those items stacked.

The basic "unicorn purchase" as it were. Not impossible, but in order for a dealer to go that deep it would need to be a car that was sitting, that they needed to get rid of for "reasons".

So, MAYBE get close once, on a left over lot bunny, assuming that all of those incentives stacked, which I am not sure they do. Even if they did, that deal would only happen once if it ever got close to happening at all.

(note, totally possible to buy a car under invoice, into holdback. Less possible for a dealer to do that and give all those discounts. Most dealers would likely say "no thank you, we are not that hard up for any sale".)

Its more a math exercise than an actual possibility

Yes, that was my point. It takes a lot to get 10% pure dealer discount, really rare. Those of us on forums that have hit that did so with combo discounts on top of dealer below invoice.

I guess it's interesting as a math exercise, but why bother with naming all the discounts if plausibility isn't really a factor? While we are at fantastical scenarios why don't we just say the dealer gives us 25% off? Or we win $10k towards a BMW every year?