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From digest.v5.n165 Thu Aug 29 17:49:14 1996
From: Gregory Prinsze <gprinsze_at_dnai.com>
Date: Thu, 29 Aug 1996 14:22:39 -0800
Subject: '97 M3 Pricing and Deals

Since I mentioned that I put a deposit on a '97 M3, several people have inquired about pricing and deal info, so I put together these thoughts for anyone who's interested. Just one man's opinion, for what it's worth. Comments welcome.

To my knowledge the factory has not yet released price info, but I think a fair guess would be anywhere from zero to 3% higher than the '96 car.

As far as the deal is concerned, it is my opinion that a fair deal on a new M3 ('96 or '97) is somewhere between 8% to 12% off MSRP. As close as I can determine, dealer cost is about 16% less than MSRP, including a 2% holdback.

In my opinion it is much safer to make an offer that is a fixed percentage less than MSRP, *not* an offer that is a fixed amount above "dealer invoice". This is simply because in response to the popularity of invoice-plus negotiating, many unscrupulous dealers have found shady but probably legal ways to fudge the "dealer invoice" amount.

By contrast, there can be no back room fudging of MSRP. It is right there on the sticker of every new car at every stealer, er, dealer. This is the safe starting point for determining what you are willing to pay for any new car.

On the average M3, 12% off MSRP works out to approximately a $1500 profit for the dealer. I think this is about as good a deal as one could generally expect on a limited production, high performance car.

Of course market factors will influence this. In a booming economy (mid to late '80s, not now), they will sell every M3 they can get and such an offer will likely be met with laughter and an invitation to take a hike. In a really weak market, obviously one is in a stronger position to get such a deal, or perhaps do even better.

I live in a metro area where there are at least three big, high allocation dealers. One of them currently has *nine* new M3s in stock! Of late they are moving very slowly, so it's probably a great time to get a low price.

At the other end of the deal spectrum, the most I would ever offer for a new M3 would be MSRP less 8%. This works out to a profit of roughly $3000. Where your offer falls in the spectrum of 8-12% off MSRP should be determined by the reputation of the dealer for integrity and quality service, and by your feeling about the professionalism, honesty, and helpfullness of your salesperson.

If a dealer has an excellent reputation and the salesperson is honest and helpful, then in my opinion they have earned a $3000 profit on an M3. Otherwise, they haven't.

Bear in mind that the above numbers are for M3s. Much better deals (on price and financing) are available on 328s because there are so many out there. Those poor happy fools among us who want an M3 . . . well we really WANT an M3. The dealers know this and rightly expect to make more off of our little affliction!

By the way, I am currently working on a small book that will detail several dozen keys for getting the best deal on a new car and on new car financing, as well as keys to avoiding tricks of the trade. Material in the book is a based on a wide variety of inside info, as well as a lifetime of buying and selling vehicles. Anyone who's interested, let me know.

Sorry about the length. I hope this helps a few people and, once again, comments welcome.

Gregory Prinsze
Waiting for '97 M3

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