[JCZ5]

@///AVM you have great perspective and I absolutely agree with you on the APR.

I just wanted to bring up the idea of manufacturer trunk money or any other applicable manufacture incentives for the dealer. Also, dealer invoice does not necessary mean what the actual dealer paid for the vehicle. Volume dealers or VIP dealers receive extra deals where they acquired the vehicle at much lower costs than maybe a competitor dealer across town. The unfortunate matter is as a consumer, we do not have price transparency, similar to the healthcare market.

So to play this out, let's pretend invoice for the M2C is $50K. However, a preferred dealer may buy this vehicle at $48K. Off the bat, this preferred dealer already has an additional $2K to play around with compared to someone across town.

In addition to the $48K, BMW offered applicable incentives, such as the $1000 dealer payout that was recently announced for each vehicle sold. Not to mention the additional tiered incentive a dealer may receive for X vehicles sold. In this example, let's assume the dealer has made the quote to receive an extra $300 for each vehicle sold.

Therefore, the dealer now as a potential of $1.3K. So if dealer is motivated, they may sell the vehicle at $47K (considered at a loss, since dealer paid $48K). However, the dealer will receive that $300 incentive from the manufacture. Now $300 does not seem much, but that certainly adds up for vehicles that the dealer have issues moving. And by and large, most consumers do not have the information to ask for that low of an amount. And even savvy negotiators on this forum usually ask for "invoice" + $1000. If we look at this math, the dealer would have happily sold at $51K, even though they may have also been willing to sell at $47K.

Now obviously I gave a very basic example. I keep referring to a tiered incentive approach at the end of the month or quarter. All that adds up to a relatively complicated model. However, a savvy dealer will understand how this works and a good percentage of their profit will come from manufacture incentives based on volume sales.