Home Deal Tutorial The Ultimate BMW Buying Guide (3) – How to Negotiate A Good...

The Ultimate BMW Buying Guide (3) – How to Negotiate A Good Deal?


Use Our Lease Calculator to Know Your True Cost

This is the 3rd article in our Car Buying Guide series:

  1. How to pick your BMW, what options should you choose?
  2. BMW special programs that can save you big dollars
  3. How to negotiate a good price?
  4. How to financing your purchase?
  5. Why leasing a BMW maybe better?
  6. Leasing process fully explained
  7. How to use our Lease Calculator

Negotiating price is a very customized process, and should be handled case-by-case. There does not exist a “guaranteed method” that you can get the best deal. However below are some rules of thumb:

Negotiating your deal online

Do not directly walk into the dealership to negotiate price. I strongly recommend negotiating and settling down on the final price using email communication or our car purchasing platform.

Once you have appeared in person and walked into the dealership showroom, this immediately indicates you have already committed your time, without any guaranteed outcome. This automatically creates an advantage on dealership side: you have already (and continue to) spent your time, however the dealership has nothing to lose.

Therefore although the dealership cannot make a deal with you finally, it is you that will have the biggest loss – your time, plus the feeling of setback and frustration. Dealership virtually has nothing to lose: a car sales person can easily handle multiple on-site customers at the same time. The dealership can always fulfill its projected sales volume as long as its pricing strategy is inline with the market trend.

Therefore, if you can discuss the selling price online, do it. This makes you more “equal” to the dealership.

If you have to go in person: the 30-minute rule

Although I strongly discourage you to do this, if you prefer to negotiate on-site, my suggestion: if you could not get the price you want after negotiating for 30 minutes with the dealership, stop negotiating and leave.

Believe me, if you cannot do it within 30 minutes, you are highly unlikely to reach your ideal price on that day, no matter how long you stay there and arguing. You are simply wasting your precious time.

Talk to as many dealerships as possible

Without knowing the “market price”, it is less likely that you are able to get a reasonable and serious answer from the dealership. I call this price to be the “Accurate Bidding Price“. The first time you contacting a dealer and offering the Accurate Bidding Price, the sales person will have a strong feeling that you are an expert, and you knows about the market. Therefore your communication with him/her will be more straight-forward (less game-playing) and efficient, which saves both party’s time

To get an idea of the latest market price (a.k.a Accurate Bidding Price), you have to talk to enough dealerships to get the “feel”. My suggestions are:

  1. Start with dealerships which are very far from you (several hundred miles from your home – so you probably won’t go there to buy your car), send out inquiry to them; contact/ask dealerships that are close to you last (because it is highly possible that you will get your car from there)
  2. For BMW, remember this magic number: 15% off MSRP. On top of this, please do not forget to apply additional factory rebates and discount programs (for example, as mentioned in Section 2). Start with that price first. If dealership declines your offer, gradually increase the price by a small amount at a time. Set and keep your bottom line, try no more than 3 times for the same dealership (if you increase your offer too many times, it will make you appear to be clueless about the market, which the sales person will take advantage of you)
  3. For most models, your bottom line should be (before tax, license etc.): invoice – all applicable incentives/discounts.

Because you are communicating with dealerships online, it is quite easy for you to talk to at least 10 dealerships within the same time period. Hence you should have enough samples to get a rough estimate of the latest “lowest market price”.

Invoice is not the true bottom!

You may have already heard sales person claiming they earn nothing when selling at invoice (here the “invoice price” means the published invoice price which you can obtain from all major car websites).

However this claim may be false.

The reason: BMW USA provides a dealership with extra “financial assistance” in the forms of bonuses, rebates and incentives – provided that dealership has achieved a certain level of sales volume and goal. This assistance is paid monthly, or quarterly, or annually. The amount is confidential (I even do not know), different based on factors such as regions/dealerships/car models/contract terms etc.

So even a dealership sells you a new BMW at invoice price, counting the “secret bonus” in the immediate future, the dealership may actually still earns money.

This also means for some low-demand/overstock models, it is quite possible to negotiate a final price WELL UNDER the invoice price! And this is not a hype – many people (including me) has been successfully in getting deals much lower than the invoice (sometimes > 20% off MSRP!)

Easier to negotiate on cars in inventory for over 3 months

Dealerships do not use their own money to buy inventory from the manufacturer. Instead, they typically also get short-term loans from banks.

Such loans have higher interest rate as time passes by. The longer the dealership does not pay off the loan, the monthly interest rate will be higher. Usually after 3 months, the interest rate will be high enough such that dealership really wants to sell the car and get rid of the loan.

So if you can find a new BMW has been sitting on the lot for over 3 months, you have a higher chance to get a good deal. To find out how long a BMW has been sitting in the dealership’s parking lot, you can look at its ID label on the inside of the driver door, or door frame. From the label, find out when it was manufactured, add 1 month for the transit time, the result is a rough estimate of the time when it arrived at the dealership inventory.

There are also some online databases which you can input the VIN of any BMW, and they will provide you the full build list of that specific vehicle (including the manufacture date).

Limited edition/high-demand models

Unfortunately, it is very hard to negotiate a deal for highly sough-after models. Because of high-demand, those models are typically sold at MSRP, or even with a huge mark-up.

Besides any applicable factory coupons/rebates, you are impossible to get any extra discount, and there is nothing you can do with this situation. If you really want that model, you must accept this fact.

So you should be rational when selecting car models. Ask yourself these questions:

  • Why do you want this specific model? Do you really want it?
  • Are you buying it simply because of its scarcity?
  • Will you regret if in the near future its pricing drops, or other better models come out (more choices)?

From my point of view, most “limited edition” models are just gimmicks. Newer models will definitely has better performance than the old models (especially true for BMW!), and car makers will constantly pushing out “limited edition” models each year. So if you are expecting your car to have the best performance forever, and is also the most unique one, stop dreaming. Automobile is a depreciating instrument, its value highly depends on the buyer. It only worth that value within the mind of the person who thinks it worth that money.

Even for most “collectable” cars, their values fluctuated wildly in the history. If you want to buy something that really holds value and does not depreciate, buy real estates, not cars.

For a rational buyer, he/she can always figuring out a better solution. For example, the latest M3 has higher demand, and it is very hard to negotiate down the price; however the M4 has a more abundant supply, thus for buyers who can also accept 2 doors, buying the M4 can save more. Back in 2010/2011, instead of paying a hefty markup on the 1M coupe, buyers can choose the M3: big discount, V8 power, higher output and better performance, bigger car, definitely a better wise choice all-around.

Of course, if a car model has very special meaning to you, that is another story.

Best deal comes out in month-end

Although not always true, you will find it much easier to negotiate when it is in last week of the month. This is because it is the department performance evaluation time (for both individual sales person and also the whole dealership).

If a dealership has not met its monthly goal, it will be more desperate to make a deal. The same applies to any sales person too.

When you are planning to buy a new BMW, start negotiating in the second half of each month will be more efficient.

Patience is your friend

It is highly impossible that you decides to buy a new car, then immediately get the best deal on the second day.

Do not lose confidence even though you cannot talk down the price after contacting several dealership.

Depends on the sales situation, manager of each dealership sets up internal “minimum price” for each car model on a daily or weekly basis. If a car model sells well in a dealership, then it has less motivation to sell more, therefore the sales manager will always ask for a higher price, regardless how hard you are haggling with him.

So you need to try more dealerships, or try at a different time. You can definitely find one that can offer you good price finally.

If you lose patience, or feel tired of negotiating, using our car purchasing platform. We will help you, and it is free.

If it is not written on paper and signed, then it is not true

Do not believe anything unless it is written down on a paper, and signed by the person who said it. Sometimes, even a signed paper has no legal power at all.

The only thing you can rely on during your car purchasing, is the words written on the final purchasing (or leasing) contract which you and your dealership sign.

If you are not sure of something, or are confused with anything, you are welcomed to ask us. Although we cannot guarantee we are correct 100% of the time, we will try our best to answer your questions.

Negotiation is a psychological game

Always remember: negotiation is a process that you are dealing with another human-being.

This is a zero-sum game, which means the counter-party has strong incentive to earn as much as he/she could. Your win is his loss, vice versa.

Before making any decision, or speak/write something, put yourself in the position of a car sales person. Think about what will he/she think and act once you say something.

Always do your research beforehand, be prepared, and appear to be knowledgeable.




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