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2019+ BMW 3 AND 4-SERIES FORUMS (G2x Generation) Ordering / Pricing / Order Tracking Forum More incentives coming due to the COVID-19 situation?

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      04-05-2020, 08:22 AM   #1
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More incentives coming due to the COVID-19 situation?

Hi all,

I am seeing that some dealers are posting some decent deals on new and used 3-series. Mostly lowered interest rates but even some lowered down prices on the car itself. The deals are only on 320d and 330i mostly right now. Have not seen anything announced yet about the M340i (uncommon here).

Do you guys think that if the current Covid-19 situation takes more time or gets worse, that the deals will become better? Or will BMW just choose not to sell over lowering prices? Also, has anyone of you got a good deal on an M340i these days that you didnt get before this pandemic?
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      04-05-2020, 08:29 AM   #2
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Many have different opinions on this, but I think that for the next few months we will see 10-12% MSRP discounts easy, probably even more on stock units. We've been seeing those pre-pandemic but now due to the desperation to move cars the incentives should be better.

Some people say that discounts depend on overall units sold and I don't see the correlation. Sedans don't sell as well as SUV's, but they still have to move sedans.
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      04-05-2020, 08:52 AM   #3
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Quote:
Originally Posted by ThatKrazyPolak View Post
Some people say that discounts depend on overall units sold and I don't see the correlation. Sedans don't sell as well as SUV's, but they still have to move sedans.
That's typically why you see better discounts on sedans than you do on SUV's. They still need to move the sedans, but there is a higher demand for SUV's.

If, for example you compare the incentives offered on the M340i vs. the X5:

M340i: $1,000 Lease Credit; $2,000 Loyalty Credit
X5: $500 Lease Credit; $1,250 Loyalty Credit

On top of that, 10-12% off pre-incentive has been much easier to get on the G20 than on the G05.

Pandemic or not, there is definitely an inverse correlation between demand and discount.
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      04-05-2020, 01:38 PM   #4
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I can only agree, sedans are easier to get better deals with due to lower demand than for ex SUVs.

Also I am heraing that right now there is in general lower demand for new/almost new cars because of people being unsure of their jobs in the near future, so that should affect prices as well I guess?
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      04-05-2020, 11:43 PM   #5
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Could go both ways. I could see a scenario where dealers aren't willing to discount more than usual b/c stock will be limited for some time.

We'll know more tomorrow for sure when the new leasing/financing numbers come out.
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      04-06-2020, 09:57 AM   #6
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Factories are currently closed. There is no need to offer more manufacturer incentives until they're making more cars to sell.
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      04-06-2020, 10:12 AM   #7
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In case anyone hasn't seen this morning, finance rates for NA were lowered to 2.8%.
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      04-06-2020, 01:54 PM   #8
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Another thing to keep in mind is that volume bonuses will be non-existent for dealers during this time (due to obvious reasons), so that also decreases their motivation to hand out generous discounts.

So with little to no new inventory coming in, no hope to score volume bonuses, dealers don't have much benefit to moving cars at a deep discount.

That being said, short answer is, nobody really knows if great deals will come out of the current situation. It's all just speculation at this point.
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      04-06-2020, 04:10 PM   #9
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Quote:
Originally Posted by ThatKrazyPolak View Post
In case anyone hasn't seen this morning, finance rates for NA were lowered to 2.8%.
Everybody else is doing 0% for 84 months and no payments for 6 months???
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      04-07-2020, 09:39 AM   #10
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Quote:
Originally Posted by wtwo3 View Post
Another thing to keep in mind is that volume bonuses will be non-existent for dealers during this time (due to obvious reasons), so that also decreases their motivation to hand out generous discounts.

So with little to no new inventory coming in, no hope to score volume bonuses, dealers don't have much benefit to moving cars at a deep discount.

That being said, short answer is, nobody really knows if great deals will come out of the current situation. It's all just speculation at this point.
Sounds logical. I guess we will only be seeing better deals if the factories open up again but the demand would still be low. Then only would they consider discounts, that is if the supply would be higher than the demand as others said.
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      04-10-2020, 05:21 PM   #11
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Quote:
Originally Posted by ThatKrazyPolak View Post
Many have different opinions on this, but I think that for the next few months we will see 10-12% MSRP discounts easy, probably even more on stock units. We've been seeing those pre-pandemic but now due to the desperation to move cars the incentives should be better.

Some people say that discounts depend on overall units sold and I don't see the correlation. Sedans don't sell as well as SUV's, but they still have to move sedans.
There's some truth to that. The reason why dealers are willing to discount on some deals is because they're approaching target/budget which means an avg. payout on each vehicle sold/delivered that may or may not be greater than the discount given. If dealerships don't sell, there's no incentive to take a loss on a vehicle plus pay out commissions on top of the loss.

Dealerships are not just handing out huge discounts for shits and giggles. These are calculated deals where the juice has to be worth the squeeze for the dealership.
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      04-11-2020, 03:56 PM   #12
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Quote:
Originally Posted by wtwo3 View Post
Another thing to keep in mind is that volume bonuses will be non-existent for dealers during this time (due to obvious reasons), so that also decreases their motivation to hand out generous discounts.

So with little to no new inventory coming in, no hope to score volume bonuses, dealers don't have much benefit to moving cars at a deep discount.
This is what I found to be true when I reached out to my two go-to dealers in SoCal. If they can't make money on the car - they are not going to sell it. One more reason I wait for 2021 builds....too bad my car goes back at the end of May. Oh well...I'll just continue to buy mods in anticipation of eventually getting my 2021 :-)
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      04-13-2020, 11:05 AM   #13
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Quote:
Originally Posted by chenry View Post
This is what I found to be true when I reached out to my two go-to dealers in SoCal. If they can't make money on the car - they are not going to sell it. One more reason I wait for 2021 builds....too bad my car goes back at the end of May. Oh well...I'll just continue to buy mods in anticipation of eventually getting my 2021 :-)
I get that in normal times but isn't the reality for a lot of dealers going to be they'll need to convert some of their stock into cash in order to help pay the bills? Looking at profit margins is all well and good but it's ultimately a lack of cash that causes businesses to go bust....
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      04-13-2020, 12:00 PM   #14
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Originally Posted by JNW1 View Post
I get that in normal times but isn't the reality for a lot of dealers going to be they'll need to convert some of their stock into cash in order to help pay the bills? Looking at profit margins is all well and good but it's ultimately a lack of cash that causes businesses to go bust....
This is purely conjecture on my part because I don't work in that industry so don't have insider knowledge....

But my thought is on a dealer's P&L, the top 2 items under the expenses bucket are payroll and inventory. With no new inventory coming in, and thousands of sales staff furloughed, it's not yet imminent that they begin offering deep discounts to liquidate remaining inventory. Perhaps that'll change in another month or 2, but right now it doesn't seem to be the case.
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      04-13-2020, 12:26 PM   #15
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Quote:
Originally Posted by wtwo3 View Post
Quote:
Originally Posted by JNW1 View Post
I get that in normal times but isn't the reality for a lot of dealers going to be they'll need to convert some of their stock into cash in order to help pay the bills? Looking at profit margins is all well and good but it's ultimately a lack of cash that causes businesses to go bust....
This is purely conjecture on my part because I don't work in that industry so don't have insider knowledge....

But my thought is on a dealer's P&L, the top 2 items under the expenses bucket are payroll and inventory. With no new inventory coming in, and thousands of sales staff furloughed, it's not yet imminent that they begin offering deep discounts to liquidate remaining inventory. Perhaps that'll change in another month or 2, but right now it doesn't seem to be the case.
I suppose all I'm thinking is businesses will have had next to no income for several weeks and, given the state the world economy's going to be in when we start to emerge from this, there's every chance at least some existing orders will get cancelled (because people will realise that car they thought they could afford back in January now looks like an extravagance). So as employees return to work and want paying - and bills like rent need paying - dealers are going to need cash from somewhere and I suspect a chunk of that may have to come from selling existing stock. They obviously won't want to move cars on at a loss but they may find needs must; waiting until the market improves so they can show a profit on each vehicle may not be an option for some dealers....
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      04-15-2020, 02:47 AM   #16
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Lease rates certainly aren’t as good as they were in February.
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      04-15-2020, 09:38 AM   #17
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Quote:
Originally Posted by Conezz View Post
Lease rates certainly aren’t as good as they were in February.
What rates are you referring too? The M340i lease rate in Canada was 3.9% in Feb... same rate now. Someone mentioned in the forum that money factor was slightly better in the US in April but residuals slightly worse. The incentives are different but value is the same in Canada as well.
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      04-15-2020, 12:05 PM   #18
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Quote:
Originally Posted by TorontoGambler View Post
Quote:
Originally Posted by Conezz View Post
Lease rates certainly aren’t as good as they were in February.
What rates are you referring too? The M340i lease rate in Canada was 3.9% in Feb... same rate now. Someone mentioned in the forum that money factor was slightly better in the US in April but residuals slightly worse. The incentives are different but value is the same in Canada as well.
Same situation in the US. MF dropped, but so did residuals. On my build the payment would be within a couple dollars from each other so no real change...
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      04-16-2020, 12:23 AM   #19
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Quote:
Originally Posted by tnsatbhs View Post
Same situation in the US. MF dropped, but so did residuals. On my build the payment would be within a couple dollars from each other so no real change...

The lease credits aren’t as good as Feb. April is definitely better than March.
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      04-16-2020, 11:04 AM   #20
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Quote:
Originally Posted by TorontoGambler View Post
Quote:
Originally Posted by Conezz View Post
Lease rates certainly aren’t as good as they were in February.
What rates are you referring too? The M340i lease rate in Canada was 3.9% in Feb... same rate now. Someone mentioned in the forum that money factor was slightly better in the US in April but residuals slightly worse. The incentives are different but value is the same in Canada as well.
I just got into a 2019 330i Msport with all the bells and whistles for a $352/month lease with $0 down. Car MSRP was $56k.. I'd say right now is a great time to lease, especially last years leftover models.
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      04-18-2020, 12:05 AM   #21
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Quote:
Originally Posted by ds1091 View Post
Quote:
Originally Posted by TorontoGambler View Post
Quote:
Originally Posted by Conezz View Post
Lease rates certainly aren't as good as they were in February.
What rates are you referring too? The M340i lease rate in Canada was 3.9% in Feb... same rate now. Someone mentioned in the forum that money factor was slightly better in the US in April but residuals slightly worse. The incentives are different but value is the same in Canada as well.
I just got into a 2019 330i Msport with all the bells and whistles for a $352/month lease with $0 down. Car MSRP was $56k.. I'd say right now is a great time to lease, especially last years leftover models.
How many miles were on the car? Was this new on the lot? If so, great deal.
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      04-18-2020, 08:04 PM   #22
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Quote:
Originally Posted by wtwo3 View Post
This is purely conjecture on my part because I don't work in that industry so don't have insider knowledge....

But my thought is on a dealer's P&L, the top 2 items under the expenses bucket are payroll and inventory. With no new inventory coming in, and thousands of sales staff furloughed, it's not yet imminent that they begin offering deep discounts to liquidate remaining inventory. Perhaps that'll change in another month or 2, but right now it doesn't seem to be the case.
In addition to payroll and inventory (which you mentioned as top 2), there's rent, insurance, depreciating assets, debt, interest, etc. There's a long list of liabilities that require a substantial amount of cash flow needed to pay the bills - even though there may be little being spent on payroll.

Someone earlier mentioned manufacturers have no incentive to sell because factories are closed, but that's far from true. Just like the dealers and any other business, there are a ton of liabilities and cash flow is important. Obviously every company's financial situation is different so incentives and what not are going to depend on many factors.
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