Question on Invoice Price definition...

[spacey]

Until few hours ago I though I understood what an invoice price is but a local dealer has me questioning myself. I know - it's their job . Well I need to have the "correct" understanding so would like to ask what is the commonly (or perhaps the only) accepted definition of the Invoice Price?

1) Is it the sum of whatever you select form the Wholesale price list - IOW, Car, Options and the "Training Service Fee" of $180?

2) Is it the sum of whatever you select form the Wholesale price list - IOW, Car, Options and the "Training Service Fee" of $180, PLUS Dest Charge of $825,-, PLUS Marketing Fee of $200 (here in Northern VA)?

Here's the reason I ask:

I just went to my local dealer (well one of them), and had all my numbers ready and backed up w/wholesale numbers, AmEx purchasing service price (for 2009 because they don't have 2010s yet in their system unfortunately) but was (not completely surprised by that of course) told by the dealer that my numbers are wrong and he proceeded to, just as logically as I have to him, justify tacking on $2400 to my numbers.

One point of contention/discrepancy was that I have calculated the complete price of the car from the wholesale numbers, including the $180 "training fee" (?!), then added $500 for profit, because that's what AmEx buying service does (for '09s anyway) and that was my proposed price for the car. Well... they said that the number is wrong becuse they define the invoice price as Wholesale+Dest Charge ($825)+Marketing Association Fee ($200) (which is supposedly regional/dependent on the market):

Also their pre-negotiated over invoice profit for 2010s is not $500,- as it was for '09s but $1800,-. He showed me a whole spreadsheet w/pre-negotiated numbers for several models (one could of course question how genuine that spreadsheet was). There were the X5 '09s but no 2010s so the $1800 over invoice he stated was for the 2010 X5 M, and said that it's the same for all X5s... (hmmm?)

I smell something fishy here but am not exactly sure where the stink lies. For one, when I add up all the numbers and compare MSRP w/his "corrected" numbers for over invoice calculations the difference between MSRP and his over invoice numbers is $400,-. IOW, wholesale + dest charge + marketing fee + over invoice profit come out $400,- under MSRP.

1) The $1800 is obviously "theoretically" negotiable since it's his profit, but on the other hand it is the number he has pre-negotiated w/AmEx, AAA etc. and at least AmEx does generally have pretty good numbers.

2) Dest Charge... well AmEx specifically takes that off their "Your Price" calculation ... so hmmm?

3) Marketing Association Fee ??? WTF?

All of the above of course is before the $349,- processing fee they are going to tack on at the end of the transaction.

I don't mention the $4500 rebate because that is not debatable.

I have not checked other dealers yet as I have a bit of an affinity for that specific dealership, but do plan to hit most local ones at least w/whatever I finally think is the "right" number if "my" dealer doesn't make me happy soon.

Any thoughts would be greatly appreciated.

Thanks,

spacey

[spacey]

Ok, I will reply to myself - I still would greatly appreciate YOUR thoughts though - because I have just re-analyzed how AmEx/AAA purchasing sites calculate their prices as well as how they define those prices.

1) AmEx/AAA unequivocally say that their final price calculated when you configure the car through their site and I quote:

"Does the price include all fees? Your special Cardmember price includes all manufacturer fees including destination. You are responsible for tax, title and documentation."

So... this seems to address my question on whether invoice as defined by AmEx/AAA include the Dest. Charge or not. According to the FAQ above from their site it DOES. I wonder if the "Marketing Association Fee" my dealer threw in would qualify for inclusion in the above definition. It may be argued that it does not because it is not a "manufacturer fee". Thus, I guess I would interpret it as just an additional profit line for the dealer.

So theoretically I should be able to take the AmEx/AAA price add tax/tags/processing fee and have a final number. Anything else is BS/additional dealer profit. Or so I think no?

Thanks,

spacey

[Penguin]

I cannot speak to Amex; however, I can tell you that the invoice the dealer receives will include destination charges, training fee, and an advertising fee. So you really have three numbers: (1) Wholesale, (2) Invoice, (3) MSRP.

Now, you can negotiate any price you can, but from the dealer's viewpoint, he pays those training and advertising fees which are on the invoice, i.e., if the training and advertising add-up to $400, the dealer will pay $400 more to BMW NA if he sells one more car, and he will pay BMW NA $400 less if he sells one less car, i.e. it is a true hard cash cost to him, unlike the soft and fuzzy documentation and other junk fees they add.

P.S. Also note that BMWs do not come from the factory with carpet floormats. Most dealers throw these in as part of the deal to keep customers happy, but some don't. The BMW mats are worth about $100-130. Usually you can get the dealer to throw in the mats as a last negotiation point when you are ready to sign the deal.

[ard]

How about the concept of "true dealer cost"?

(I think this is penguin's wholesale)

For an X5 it is all the "Invoice" prices summed up for your order.

Minus $4500 eco credit
Plus 180 training
Plus 825 delivery
Plus MACO (for you this sounds like $200 for norhtern VA... out in CA it can be 400)

You can argue that MACO isn't a "BMW FEE", but there is no arguing it is part of the 'true cost' for the dealer.

I would not pay $1800 over.

You can then add tags, DMV fees. Dealers will try and screw you with 'processing fees'..unless your legislature has already limited these in your state. $349 is out of line. $40 is more along the lines of what they deserve for the 'paperwork'. Put the $349 into the 'profit bin' in your negotiations- they'll take it out, you keep putting it back.

Finally, if Amex/AAA doesn't have the 2010 X5 in their plan, why are you agonizing over that??? If they DO, then it would seem that MACO **should** be covered in the price (since it is a fee from BMWNA- the manufacturer- to cover local advertising.

A word on tactics: cut your best deal at your #2 choice, give your #1 choice a chance (ie an hour or two) to meet the deal.

[spacey]

Thanks Penguin and Ard.

Here's an update on my quest for the "truth" !

Called the AmEx car purchasing service to clarify their claim that the price obtained from their calculator already INCLUDES all fees (Dest, marketing (a.k.a. MACO) and Training). And... they did confirm that without hesitation or ambiguity. They have stated very specifically that the only charges on top of the price obtainined from their calculator (and I care about that because it's $500 over invoice for 2009 X5s) should be tax, tags and processing fee - nothing more.

They have also logged a complaint ticket, took names and phone numbers, and said that they will contact the dealer in question and confront them w/my claim. They have also said that if I go there again and they will not drop the Dest Charge, Training Fee and MACO to give them - AmEX - a call from the dealer and they will use their persuasion to try and change their mind. Their persuasion would include the threat of dropping the dealer from the program if they refuse to comply. So... if I get the dealer to back down, w/AmEx's help, their $1800 over invoice suddenly shrinks down to $1800 - $825 - $180 -$200 = $595,- over invoice.

Now, the AmEx guy also said that while their web site does not have the 2010 X5s on yet, according to a "memo" they receive every week w/updates, the 2010 X5s should be on within the next "couple" of weeks. I did say, and the guy concurred, that that's cutting a bit close w/the $4500 rebate possibly expiring 11/2 so I will need to make my own decision whether to wait and see if 1) the AmEx system does get updated w/2010s before the rebate goes bye bye, and 2) that the 2010 pre-negotiated price is less than $1800 o/i the dealer has already agreed to sell the car for; or just assume that $1800 o/i is the new number to work with and make a deal based on that. Which is still pretty good assuming the'll drop the other charges (dest, training & marketing).

spacey

[spacey]

Actually... wait... I think my logic is flawed here.

I just looked at the 2009 X5d "Invoice" price AmEx is using to start their calculations and it's $48410.- for the base car. Then they add options (no fees) at Invoice/Wholesale price, plus $500 o/i profit, minus $4500 and that's the complete number you are suppose to take w/you and get the car for w/no haggling.

Since we know that 2010 X5 prices, so far, have not gone up relative to the 2009, then 2010 X5d Invoice used should be the same... NOT $47105 Wholesale I've been using. Ok, I see my mistake.. the definition of the Invoice price really IS: Wholesale + Dest Charge + MACO + Training Service Fee (which comes out to $47105 + 825 + 200 + 180 = $48310 - not sure why it's off by $100 but who cares its in the right direction ). That explains my cofusion... I think... still doesn't solve my problem but at least I think I have an understanding of all the numbers and their relationships now.

I should really call AmEx back and take back that complaint they logged now...

spacey

[tim-atl]

Let us know how this ends. I'm sure it will be interesting.

Tim

[silverbimmer]

Have you try overstock.com? The price seems to be better than AmEx buying service.

[jhu321]

i just signed a deal for 1300 over invoice on saturday... yo ucan do much better than the 1800