Discounts off MSRP?

[idrw]

Long time lurker on this forum and thinking of putting a deposit on the MINI Cooper SE. To the folks who took delivery of the mini ev, is the price negotiable?
@Matt Shumaker I am deciding between Patrick MINI and Bill Jacobs MINI to put a deposit. Heard in a video that you picked up from Naperville. Any specific reason why you chose the one in Naperville? Were they flexible with the pricing?

 

[fizzit]

I think it's very dependent on the market in your area and what the dealership has available.

I got mine for $500 off MSRP from a dealership that had 4 available. My local dealership had 1 available and wouldn't budge below 1k over MSRP. If you preordered yours it seems unlikely they'll give you a discount since they know it's exactly what you want.

 

[insightman]

I think it's very dependent on the market in your area and what the dealership has available.

I got mine for $500 off MSRP from a dealership that had 4 available. My local dealership had 1 available and wouldn't budge below 1k over MSRP. If you preordered yours it seems unlikely they'll give you a discount since they know it's exactly what you want.

Yeah, I know I have zero leverage after ordering in October and showing my willingness to stay in the queue. My car left the factory 3 weeks ago, but there doesn't seem to be any urgency to ship it here.

@idrw, if you have two dealers you can access, then you should try to play them off each other. These MINI Electrics are so expensive in Canada that there are lots of them still unsold and deals are available.

@Matt Shumaker lucked out in that Bill Jacobs MINI had connections and found him a MINI Cooper SE long before the one he ordered would have arrived. He was very happy to be the first to purchase one in the midwest (a guy in Columbus, OH, won the first delivered SE from Amazon). I don't know if Matt had the leverage to say, "I won't take this ultra-rare bird-in-the-hand unless you reduce the price." However, for all I know, perhaps Bill Jacobs was feeling generous and gave him a discount for his enthusiasm.

If there was a discount for enthusiasm, I'd be a happy guy, indeed.

 

[idrw]

@fizzit @insightman Thanks a lot for the reply.
So I inquired at both dealerships. Patrick MINI in Schaumburg, IL offered $1500 off MSRP right off the bat. But deliveries are kind of pushed out to December/January for new orders. Dont know if I can wait that long..

 

[insightman]

@fizzit @insightman Thanks a lot for the reply.
So I inquired at both dealerships. Patrick MINI in Schaumburg, IL offered $1500 off MSRP right off the bat. But deliveries are kind of pushed out to December/January for new orders. Dont know if I can wait that long..

I'd be really upset if they told you the wait would be 30-60 days. Then I'd be really curious how they could make that promise. Six months would still be a quicker delivery than mine. I wonder what percentage of the 2,000 MINI Electric cars MINI originally planned to bring to the US this year will actually make it here?

 

[idrw]

@insightman Bill Jacobs did quote a wait time of roughly 8 weeks.
I read an article published in March that mentioned about half the allocation to the US already have a confirmed deposit. Which could mean half the slots could still be open.
I wonder how many would have cancelled their preorders due to the COVID situation/MINI being unable to honor timelines due to production shutdowns.

 

[KeninFL]

Nobody mentions this... that I can find anywhere. To order a Mini SE, as you all know, you go online and make your deposit. Then Mini/BMW notifies the dealer closest to you and -- this is the catch -- you have to deal with that dealer and that dealer only. If your closest dealer doesn't want to sell for less than MSRP, what is your option? Not any... unless cancelling your order and collecting your refund is an acceptable option. It's a system that established a monopoly market for the seller.
Love the car. Not so sure about the dealerships' association and BMW who put that system together.

 

[MichaelC]

To order a Mini SE, as you all know, you go online and make your deposit. Then Mini/BMW notifies the dealer closest to you and -- this is the catch -- you have to deal with that dealer and that dealer only.

Yes and no. You can work around that.

Nothing prohibits you from contacting dealerships first to get a feel for whether or not you want to do business with them. That includes any that are not in your immediate area. As part of the deposit process, you enter a ZIP code to get a list of nearest dealerships for your convenience. If you prefer to work with a dealership that isn't in your area, I bet you could enter the ZIP code for their address. If there's more than one dealership nearby, the search results will give you a list to choose from. In fact, the sales person I spoke with beforehand told me very clearly to select them as my dealership when placing my deposit. When I enter my ZIP code, I can choose between the nearest dealership (14 miles away) or the next-nearest one (200 miles away).

Your deposit is paid to the dealership you choose during this process. So they're not only competing for your order, they're competing for that up-front deposit, as well.

 

[KeninFL]

Yes and no. You can work around that.

Nothing prohibits you from contacting dealerships first to get a feel for whether or not you want to do business with them. That includes any that are not in your immediate area. As part of the deposit process, you enter a ZIP code to get a list of nearest dealerships for your convenience. If you prefer to work with a dealership that isn't in your area, I bet you could enter the ZIP code for their address. If there's more than one dealership nearby, the search results will give you a list to choose from. In fact, the sales person I spoke with beforehand told me very clearly to select them as my dealership when placing my deposit. When I enter my ZIP code, I can choose between the nearest dealership (14 miles away) or the next-nearest one (200 miles away).

Your deposit is paid to the dealership you choose during this process. So they're not only competing for your order, they're competing for that up-front deposit, as well.

As you say, yes & no.
I checked dealers before specifying the dealer most close to me (20 miles & half an hour away). The next farthest is 180 miles and two and a half hours way) and then two more (both 200 miles away and about four hours away). When you contact them, either online or by phone, none is willing to discuss a selling price. One did tell me that the price is MSRP because --- get this --- "the factory is making all they can." Anyone should know why that is not a valid reason.
And yes, a buyer can spend the time finding a dealer who is a 1000 or 2000 miles away who is willing to knock some $ off but even if that amount were less than what it costs to go get the car or have it shipped to you, it's not the way I want to purchase a MINI.
The point of my comment is that MINI/BMW have established a system that facilitates dealers' selling at MSRP. And they are eagerly taking advantage of that.

 

[insightman]

One did tell me that the price is MSRP because --- get this --- "the factory is making all they can." Anyone should know why that is not a valid reason.

It's not a valid reason from your point of view, but the price of a car comes down to supply and demand. So "the factory is making all they can" tilts that equation based on a total lack of supply. That lack of supply is a valid reason for not lowering the price from a dealer's point of view. They don't care if you think it's a valid reason because they believe they can sell the car without discounting the price.

I assume a dealer offering a $1,500 discount to someone ordering a MINI Cooper SE that won't arrive for many months is counting on the long-term interest earned from the deposit to somewhat offset that discount. That dealer may also believe that supply will catch up with demand by the time that MINI arrives, and would have to offer that discount to make the sale then.

I've been trying to come up with a rationale to present to my MINI dealer for lowering the price when the MINI Cooper SE I paid a $1,000 deposit for in October and another $500 deposit through MINI corporate in January arrives at some still unknown date. "I'm paying cash," "You've had my money for most of a year," "You messed up the ordering process or I would have had my MINI before others who ordered 6 months after I did," "I'm going to have to pay a lot to get a base MINI hood installed at a body shop because you couldn't get MINI to delete the fake hood scoop." Admittedly, the last one is pretty weak, but none of my arguments seem strong enough to invalidate the supply and demand equation.

It might seem strange, but I appreciate having a MINI dealer less than 2 miles from my house and paying a little more may not keep them in business, but keeping them in business is a rationale that makes me less disappointed about paying MSRP. Less reputable dealers are taking advantage of the meager supply by actually raising the price above MSRP.

Maybe they'll try to make me happy by offering big trade-in bucks for our 2010 Honda Insight with 63K miles on the odo. Maybe not.

 

[MichaelC]

The point of my comment is that MINI/BMW have established a system that facilitates dealers' selling at MSRP. And they are eagerly taking advantage of that.

Point taken. But as @insightman pointed out, supply and demand is not in our favor--so ability to negotiate selling price may not be a viable deciding factor if you can reasonably choose between dealerships (especially if you must order one because they don't have any in stock). And with a 3-6 month delay between order and delivery, it's far too soon to try negotiating selling price anyway; who knows what incentives will be available by the time the car arrives? Or what state "the market" or "the economy" will be in, or how close that dealership will be to hitting sales targets, and thus drive the their motivation to make the sale?

At this point, your trade-in (if you have one) will be your best leverage for reducing your out-the-door cost. Get quotes from places like CarMax, Carvana, or even Edmunds' online estimator so you know what to expect. From what I have seen & heard, used car prices are unusually high right now since many dealerships aren't getting their regular supply of new vehicles--so you may be able to use the law of supply and demand in your favor from this angle. But then again, who knows what things will be like by the time your ordered car arrives?

 

[KeninFL]

It's not a valid reason from your point of view, but the price of a car comes down to supply and demand. So "the factory is making all they can" tilts that equation based on a total lack of supply. That lack of supply is a valid reason for not lowering the price from a dealer's point of view. They don't care if you think it's a valid reason because they believe they can sell the car without discounting the price.

I assume a dealer offering a $1,500 discount to someone ordering a MINI Cooper SE that won't arrive for many months is counting on the long-term interest earned from the deposit to somewhat offset that discount. That dealer may also believe that supply will catch up with demand by the time that MINI arrives, and would have to offer that discount to make the sale then.

I've been trying to come up with a rationale to present to my MINI dealer for lowering the price when the MINI Cooper SE I paid a $1,000 deposit for in October and another $500 deposit through MINI corporate in January arrives at some still unknown date. "I'm paying cash," "You've had my money for most of a year," "You messed up the ordering process or I would have had my MINI before others who ordered 6 months after I did," "I'm going to have to pay a lot to get a base MINI hood installed at a body shop because you couldn't get MINI to delete the fake hood scoop." Admittedly, the last one is pretty weak, but none of my arguments seem strong enough to invalidate the supply and demand equation.

It might seem strange, but I appreciate having a MINI dealer less than 2 miles from my house and paying a little more may not keep them in business, but keeping them in business is a rationale that makes me less disappointed about paying MSRP. Less reputable dealers are taking advantage of the meager supply by actually raising the price above MSRP.

Maybe they'll try to make me happy by offering big trade-in bucks for our 2010 Honda Insight with 63K miles on the odo. Maybe not.

I don't want to get into a tangle about the self-evident tactic MINI/BMW has developed for the SE, but a few things. First "the factory is making all they can" is an unsupported assertion (by a car salesman). Maybe they are (or not) but what is inarguable is that they are making everyone (SE's that is) that is ordered -- which is a different thing altogether. And the consequence of their doing that is they are limiting the supply to just the number that customers have put a deposit on to buy. Clever of them not not make "all they can" and then hold their breath to see how many sell. (Dealers like this system because they aren't required to "buy) cars that will sit on their lots and feel the pressure to sell them before the interest on their loan kicks in.)
BTW telling a dealer you will pay cash is not an incentive for them. They want you to take out a loan w/BMW or a local bank they work with.
Nothing strange about wanting your dealer close by -- and the dealer knows that It's to his advantage when working a deal -- which you can't do with an SE.
And a good luck wish in your dealings with your seller. Really the only hope you have is their willingness to have a happy customer. Some dealers will take that extra step. But certainly not all.

 

[KeninFL]

Point taken. But as @insightman pointed out, supply and demand is not in our favor--so ability to negotiate selling price may not be a viable deciding factor if you can reasonably choose between dealerships (especially if you must order one because they don't have any in stock). And with a 3-6 month delay between order and delivery, it's far too soon to try negotiating selling price anyway; who knows what incentives will be available by the time the car arrives? Or what state "the market" or "the economy" will be in, or how close that dealership will be to hitting sales targets, and thus drive the their motivation to make the sale?

At this point, your trade-in (if you have one) will be your best leverage for reducing your out-the-door cost. Get quotes from places like CarMax, Carvana, or even Edmunds' online estimator so you know what to expect. From what I have seen & heard, used car prices are unusually high right now since many dealerships aren't getting their regular supply of new vehicles--so you may be able to use the law of supply and demand in your favor from this angle. But then again, who knows what things will be like by the time your ordered car arrives?

Thanks for chipping in. Pls read my response to insightman about "supply and demand." it's not in your favor because it's set up that way.) Remember, dealers are members of a trade association which functions in designated regions. They do business with each other and generally hold themselves to limits on discounts, etc. Sounds cynical, but not meant to be. They are pressured by the mfg and they have all kinds of time frames to meet without incurring extra costs on interest. etc.
But the point I want to make is that the dealer does not believe "it's too soon to try negotiating selling price" because it was the dealer who told me when I was specifying the car I wanted that they sell at MSRP. They didn't say perhaps in 2-3 months we will discuss price and they woulf have because it would be in their interest to do so unless of course, they have no plans to and don't expect to. Buy yes, things can change in that time frame but I was not concerned with that. My original comment was about the effect of their "monopoly market" the make- a- reservation- paymen-t and- deal- with- a- specific- seller has created.

 

[MichaelC]

But the point I want to make is that the dealer does not believe "it's too soon to try negotiating selling price" because it was the dealer who told me when I was specifying the car I wanted that they sell at MSRP.

Oh! I missed that detail. Okay, your dealer set a firm expectation. (Mine didn't do that.) If paying MSRP is a deal-breaker, you are within your right to say so (especially with the long wait) and ask them to refund your deposit. You could also ask them if there are any other areas they could give you a break to reduce the total out-the-door cost. If they won't budge, and you have the will to walk away, ask for your deposit back and go elsewhere (or buy a different car, or wait for supply to catch up to demand and try negotiating then).

You are absolutely correct that they set this system up to shut down price negotiations. That doesn't mean you can't try, if you really want to. Since you ordered the exact car you want and (in theory) will take delivery as soon as it arrives, you're saving the dealership advertising and floor space costs. Once that car has been built and is either on its way or on their lot, you could gamble and threaten to walk away from the deal if they won't budge on price--especially since everyone's situation may have changed in the interim. I say it's a gamble because they may let you walk if they have a list of other people waiting for their orders...and maybe one of them would be happy to buy the car you ordered if that means they get one sooner. Again, supply and demand is working against us here.

Edit: And with that, I will bow out. I'm not trying to be contrarian or drag out a debate. You're right that the preorder system is monopolistic, so discounts off MSRP are unlikely unless your specific dealership has several SEs in stock or on order without committed customers.

 

[Puppethead]

One thing to possibly keep in mind is the long-term hit dealers might be facing with these cars because there will be a fraction of the service an ICE car needs. That could act as a disincentive for them to discount the price, and as a buyer the reduction in service costs (no oil changes, no timing belt replacements, no spark plugs, etc.) over the life of the vehicle can be factored into the total cost of ownership, so paying full price could very well be offset.

 

[idrw]

I second @Puppethead that overall cost of ownership at the end of the day would be low. The internals are from an i3 = proven; the chassis is almost a decade old with the kinks ironed out. The reliability is going to be top notch being an electric and being a proven platform. Compare that with the Tesla's with iffy build quality. Minimal maintenance cost and not having to use gas is going to offset the upfront costs. Remember this is the cheapest EV in the market right now and with the federal tax credit, even cheaper. MINI is a marquee brand and the appeal is always there. I never considered a MINI before because of reliability issues with their ICE cars but the electric powertrain eliminates that concern. That being said, I will never, and nobody should ever pay over MSRP. The price will eventually come down and supply will eventually catch up with demand and prices are bound to fall if you are patient enough to wait that long..

 

[insightman]

"the factory is making all they can"

Last year, MINI said they were planning to allocate just 2,000 MINI Cooper SE cars to the US in 2020. They may have decreased that number due to the pandemic, but I haven't read that.

MINI is promising this car to the US, EU, Britain, Canada, Australia, New Zealand, India, and South Africa. Perhaps Japan and China, too--I haven't read that, but it would make sense. Suffice it to say this car is in demand around the world, despite its paltry range. For that reason, I'm sure the factory is making all they can, but they're not all coming to the US.

I marked this video which claimed (maybe in the comments) that 1 of every 8 MINIs now being built is electric. Based on the Canadian, British and German prices, it appears that MINI makes the least money on an SE sold in the US. So US buyers are lucky MINI might bring as many as 2,000 MINI Electrics here.

I, personally, feel lucky that MINI is selling this car in my non-ZEV state. To me that demonstrates they're not pushing this MINI as a "compliance car."

It would be interesting to learn how the dealer margin on the SE compares with other MINIs. Is there $1,500 on this car that a dealer can share with a favored customer?

 

[idrw]

@insightman according to edmunds build and price, the invoice for the signature trim is $28560. So there is some margin there but you need to find someone who would honor the invoice price...

 

[KeninFL]

It's interesting to read everyone's thoughts on this subject. I'd say in general too much apology is made for the way the SE is sold on the basis of "supply & demand." We, the buyers, are unwittingly limiting the supply because MINI/BMW is selling only what has been ordered. That's not "supply & demand." That's "limiting the supply to the demand." Maybe "contrived supply & demand" is the term for it.
Still and all, I love the car.

 

[KeninFL]

@insightman according to edmunds build and price, the invoice for the signature trim is $28560. So there is some margin there but you need to find someone who would honor the invoice price...

Thanks for the Edmunds breakdown. The dealers' margin then is about 7%, an industry average (6-8% is typical). So dealer has $2190 or so the play with. (There are other factors like mfg to dealer incentives, etc). Salesperson gets $300.00 if he/she's lucky and the rest goes to the guy in the leather chair in the big office. As Click & Clack used to kid, he's got boat payments and kids in school. I'll think of that when I'm deciding to pay full price.