Saturday, January 22, 2011

Decision MADE!!!

Well this morning I took my 8 and 7 year old daughters with me to test drive the 550xi to see if there really was a difference between it and the 535xi. At least I wanted to see if the $10K over 6 years would really be worth it for the 550xi. We arrived at the dealership and the 550xi I had seen on the showroom floor was the only 550xi with the M Sport package available so they opened up the doors to the showroom floor and pulled it out for me to test drive. I totally wasn’t expecting them to take it off of the showroom floor for me to take out in the 25 degree weather to get salt and sand all over it. Big props to Fairfax BMW for showing a new customer a great experience.

All pretty sitting on the showroom floor.

Game, set, match. Hands down the 550xi is extremely responsive and the use of the 3 different suspension settings while driving it (comfort, normal, sport) were a HUGE surprise in my book. When you pressed the button in and put it into “sport” mode you could feel the car HUG the road (literally) even while going straight.

After the test drive we went in and sat with the CA at Fairfax BMW and I brought in my laptop with all of my spreadsheets built out with MSRP, Invoice, and ED pricing. I don’t think the CA thought I was prepared when I first showed up this morning. We sat and walked through the base price of the car and compared his ED price against what I got from the forums. We walked through every option, warranty, sales tax computation, dealer fee, destination fee etc. In the end we were only apart by $400 (not too shabby).

I drove home and opened up the laptop and re-ran all of my numbers and checked the terms of loans with my various credit unions to see what my monthly payment was going to be for X amount down on the car etc. I played with this for an hour or so and was extremely pleased with the results. Due to the down payment I am going to make on the car I won’t be financing as much as I did when I bought my Acura TL 5 years ago which is going to save me a couple hundred dollars a month. I guess that’s where the extra gas money is going to come from to pay for me getting the 550i instead of the 535i. J

Research never ends so I hopped on YouTube and walked some more customer delivery experiences along with some videos on the BMW Welt facility. I came across a video series that a BMW dealer out of California put together in 2009 of his ED experience. It’s worth checking it out, if you have the time.

Friday, January 21, 2011

The Google Mapped Route

Planned Route

Buyer's Remorse and I haven’t Signed Anything (YET)

Over lunch today I started thinking about why I am so fixated on the 2011 550xi instead of what I originally wanted which was the 535xi. So I started running the pros and cons through my head and thought (good blog post).

BMW 550xi:
1.       100 more horsepower.
2.       I always want the top of the line for whatever model I choose.
1.       It is going to cost me $3,207 more to get the 550xi with the same options as the 535xi.
2.       I will spend $628 extra in annual fuel costs by getting a 550xi (V8 400hp) instead of the 535xi (300hp).

BMW 535xi:
1.       Saving $628 in annual fuel costs.
2.       Saving $3,207 on the price of the vehicle. This equates to an annual payment reduction of $684 (5yr loan @ 2.99%) or an annual payment reduction of $600 (6yr loan @ 3.49%)
3.       Same everything as the 550xi with the only difference being a V6 with 300hp as compared to the 550xi having a V8 with 400 hp.
4.       To put it into perspective over the life of the vehicle I can save
a.       Base car cost savings: $3,207
b.      5 year fuel savings: ($628 * 6 = $3,762)
c.       6 year payment savings: ($600 * 6 = $3,600)
d.      That’s a total of ($3,207 + $3,762 + $3,600 = $10,562) during its 6 year life.
1.       Doesn’t have the extra 100hp that the 550xi has.
2.       Isn’t the top of the line model.

So it boils down to, is that extra 100hp with the 500xi really worth the $10,562 over the course of the 6 year lifetime of the vehicle?  I mean come on let’s be real. I drive 25,000 miles a year on average and 75% of that mileage is spent on I-95 rush hour. That 100hp isn’t going to make any difference to me 75% of the time given the $10,562 to shell out for it. Not to mention all of the speeding tickets I would likely get with the 500xi. The car I drive now has a V6 with 258 horsepower so no matter if I get a 550xi or a 535xi I am going to have MORE HORSEPOWER ARRRRGHHHH ARRRRGHHHH ARRRRGHHH…. J

My conclusion, which isn’t by definition a fiscally responsible one, is to press forward with the 535xi, unless there is something with the 550xi, other than the V8, that I am not aware of. More inquiry to make with the CA during tomorrow morning’s test drive of the 550xi and 535xi.

Hmmm decisions decisions.

Thursday, January 20, 2011

How to Compute the European Delivery Pricing (Maybe)

So I have seen several posts online about how to compute the European Delivery pricing. I have been searching for hours until my eyes feel like they are going to pop out of my head but the most common equation I have come across is as follows:

If I understand this correctly does the information below look correct using the equation of:
MSRP Base Car Sticker X .93 = Invoice (ED MSRP) (7% off of US MSRP)

Invoice (ED MSRP) X .92 = ED Invoice (another 8% off for total car discount of 15%. That seems a bit HIGH to me for some reason. Serious discount if it holds true.)

Options MSRP * .91 = Invoice/ED (9% off of MSRP) 

I'll follow up to this post in Mid-September and see if the pricing hold true with my experience. The only thing that would change this is the 2012 lines start being built in August so my car will be a 2012 model. I would expect the options to change some and base price to go up 1% or 2%. We'll see.

Things to remember if purchasing a BMW via ED:
1. Tags/Title costs extra.
2. Do not pay MACO (Advertising fee) or Training (you don't need no stinking training). Update: 1/22/2011 - The CA said they had to charge it. I told him there are other dealers that will sell me this car for ED and will NOT charge me for it and that I had no problems flying out of state to take redelivery of my car if it's going to save me erogenous MACO and Training fees on my contract.
3. Delivery fee is flat $875 and covers shipping your car back to the US after your ED.
4. Virginia does not require a processing fee for paperwork. That's where the dealer cost comes in to play. MD does have a flat fee for processing of $99. Update: 1/22/2011. I found out that the dealer I am working with has a $399 processing feel. I told the CA that is going to come out of the $1,500 dealer fee I was allowing for in my budget. So that said they are down to $1,101 as dealer KEEP at this point. :)
5. Going dealer keep is between $500-$1,500 as of the time of this posting.
6. Be sure you work with a dealer/Client Agent (CA) who is experienced with ED or who is a board member (??). Update 1/22/2011: I asked my CA and he has dome some ED deliveries in his 5 years with the dealer so though he has limited experience I'll press forward with him until things stray from the path. I set CRYSTAL CLEAR expectations with him in that when I go to financing no hidden fees will be added outside of what we discussed today or I would take my business elsewhere. He agreed.
7. Taxes should only be assessed on the base car and options you purchase. (Many thanks to a friend of mine who used to be a car salesman who told me to watch out for this shady practice.) Do not allow the dealer to try to make more money by taxing delivery fee/their keep etc (total cost OTD). That's just WRONG and they will get a middle finger with me walking out the door if they try and play those reindeer games.
8. If the dealer tries to add additional fees tell them sure, it's just going to come out of the dealer's keep ($500-$1,500) :)
9.  I'm not sure if the following items are TAXED if you purchase them with the vehicle - tire and rim protection/paint and carpet protection packages/extended warranty/extended maintenance program. I have to do some more research here.  Update 1/22/2011: I found out these items are taxed though not at the 3% VA tax rate. They are taxed at 2.5%.

The European Tour Plan for October 2011

So here is what I have come up with so far. Still in the early stages but I've clocked kilometers, estimated departure and arrival times, and baked in fuel/food stops.

So this is what the 2,600 kilometers looks like on the map.

Let's hope it doesn't change since I have started searching for hotels/prices etc. I'm looking forward to driving through the swiss alps.



Wednesday, January 19, 2011

Good European Delivery Links

Great videos:
Best video I have found:
A little corny:
A 335is in the Alps:

Great forum:

The Official BMW ED Site:

Wikipedia Dropping Some Knowledge on the Subject:

Some good blogs with photos of BMW ED and European Driving Experiences:

I need a new car and EXPERIENCE

So I currently drive a 2006 Acura TL which has 110,000 miles on it. I tend to purchase a new car every 5 to 6 year since I always purchase the extended warranties and take full advantage of them. I have had a great experience with my Acura dealer over the past few years but I just feel that it’s time for a change. The service department has been good to me but in my opinion the Acura engineers have not been kind to Acura’s faithful consumers given their 2011 TL/RL/MDX seems as if they crashed into a Saturn head on. The grill just looks blah.

So in December 2010 I set out to do some online research to determine what my next car should be. I knew I was looking for a car that had to get decent gas mileage since I drive in excess of 100 miles a day for work. It has to be comfortable and responsive when I step on the gas in Washington, DC traffic. That ruled out any 4 cylinders and most hybrid cars. So my 20 something side of me took over and I started looking at sports sedans. I looked at a few coupes as well just to be fair. I went through Infiniti, Lexus, Acura, BMW, Mercedes, Audi, and Volvo. I narrowed it down to BMW and Mercedes.

I know what you are thinking; BMW and Mercedes owners always seem so snobby or are more concerned with their image than actual quality of a vehicle. So I decided to dig in. In my research I found that BMW had more flexible options and packaged service which is a plus for me. I have always wanted a BMW or Mercedes but just couldn’t justify the cost. So I dug in some more. BMW offers various packages with their vehicles and doesn’t do as much nickel and dime work like Mercedes does when building out a car online.

Price is always something to consider but when you have been fairly successful in life sometimes you just have to act out what the new BMW commercials say “I deserve this”. So off to the BMW dealership in Fairfax Virginia I went just before Christmas. It was a cold Saturday morning and I took my son with me to browse the lot. I was specifically going to see what the M3/3 Series and 535xi looked like in person and see just how much room they had inside them for passengers. As a father of 4 I never can get the entire family into my car, which is why we have my wife’s HUGE school bus SUV, but I wanted to ensure the kids (2 at a time) had leg room in the back for their projected growth for the next 5 to 6 years (my car buying cycle). The M3 sedan and the rest of the 3 series just didn’t have enough passenger room for them so I asked to take a look at the 535XI. The salesman just seemed put off that I told him I wasn’t looking to buy a new car until October 2011 and was reluctant to get the keys to the 535xi. I had to level with him and say “If I am going to put $70,000 USD into a car I want to do all of my market research months in advance.”

In an economy like this it is a consumer’s market and with that amount of money I told him he needs to make a time investment with me in order to protect the brand of BMW and keep me interested otherwise there is a Mercedes dealership down the road from my house in Fredericksburg, VA and they can have my business if Fairfax BMW didn’t want it. The guy went on to tell me how he was getting ready to retire in January 2011 when it clicked with me “He’s on the bus/checked out already/going through the motions.”. So I decided to have some fun with the old guy. I strapped my son into the back of the 535xi and with the salesman in the front seat we were off on our test drive. It was probably 30 degrees that day and the engine seems sluggish as if it were missing when I started it. We sat for a few minutes to let the car warm up and then we were off. We hit the main road and I put my foot into it. The 535xi has 300hp and it responded well seeing as my 06 Acura TL has around 250. The salesman looked over to me as if he wanted to say “please slow down”. But my son was in the back seat and I could see the big smile on his face so we kept on truckin. As we came to a red light I waited until the last minute and stomped on the brakes and sure enough ABS kicked in and we smoothly came to a stop. Again nasty looks from the salesman. I chatted with him and said I really would like to speak to the service manager as buying a car for me is an end to end experience and if the introduction experience didn’t go well then chances were I would take my $70,000 + elsewhere.

He then pointed me towards the service department and we drove over. I parked and was ready to get out when he looked at me and said “oh we don’t have an appointment so call me when you are ready to purchase and we’ll schedule one”. WTF??? So we drove around the service department as he blurted out facts about how it was the largest on the east coast blah blah blah. We arrived back at the dealership and after parking the car he took the keys and shook my hand as if he had better things to do with his time than mess around with some guy that wasn’t even buying a new car until after he had retired.

At that point I wrote off Fairfax BMW as not really caring about the consumer or brand and just wanting to make a quick sale. Frustrated I went home and did some deep dive research online about BMW dealerships in the area also searching for how to get the best price etc. I came across a site called which is filled with BMW enthusiasts around the world. I have spent countless hours on this site since I found it. Not a plug for them just tons of great information.

So I came across something called “European Delivery”. Hmmm wonder what this is. Well to make it easy you order your BMW through a dealership in the U.S. and take delivery of the car in Munich, Germany at the BMW Welt built in 2008. Hmmm interesting. <Rewind> - My wife and I went to Ocho Rios, Jamaica back in October 2010 for our 9 year anniversary and while there we talked about going to Europe for our 10 year anniversary. <Fast forward to now> so I think to myself <connecting the dots> hmmm I could order the car and pick it up in Germany and drive her to Rome for our 10 year anniversary. <SCORE – WIN WIN>.

Last Friday I was working in Reston, VA and was getting ready to make the 70 mile trek home from work and I thought “Hey, that guy at Fairfax was a douche but I bet they have some hand out info on European Delivery”. I swung in to the dealership since it was on my way home. I walked in and asked to speak to a sales person. I met the guy and he seemed nice and invited me into his office. I explained my situation, as I did to his co-worker the previous month, and low and behold the older guy no longer worked there. (Good news for the dealership in my opinion). We chatted for a bit and after 30 minutes had gone by we walked out to find a 5 series with the M Sport package. They had a 550xi loaded on the showroom floor with a sticker of $75,575. Whoa throw taxes on that thing, and the other fees, and that’s over $80,000. NO WAY AM I PAYING THAT. Then I remembered why I was there, European Delivery. So we dug in to the car and talked some more, I sat in the front and back and checked it out. I was so amazed with everything I completely forgot to ask anything else about ED so I headed home to have a late dinner with my wife and kids and thanked him for his help changing my mind about the brand and their dealership.

Digging in further into European Delivery (ED) online last weekend I found the information to point to it being more cost efficient than using car buy services like I have in the past from Costco and USAA. I have called 2 dealerships in my area and both do ED. I spent a few hours this past Sunday building out the car I want, tracking down the European Delivery Wholesale Invoice Pricing and finding out how much the dealership would make. On average the info I found shows a dealer will make between $500-$1500 just for doing the paperwork to order the car/taxes/license/tags etc for you. Hmm not bad for a couple hours of work and I save almost $7,000 on the price of the car, which would help finance the European anniversary trip.

I spent some time building out a schedule of when we could fly over to take delivery, where we would go, what we would see, where we would stay, and of course doing a full scale financial analysis of what the trip would cost. I put it all into excel along with our financials and if we could actually afford this car. All signs pointed to YES. I called and spoke with a dealer in Maryland and walked through what I was looking for and told him I wasn’t willing to pay more than $1,000 to the dealership for ED. This guy’s name is written in GOLD on the bimmerfest forum and he was a genuine guy on the phone so he and I will be sitting down in late Feb to walk through the process end to end to see if he can meet my offer.

I am currently scheduled to have a test drive of the 550xi with M Sport/Prem 2/HUD this Saturday. I’m going to take my 2 older daughters with me for the experience. I also plan to have a list of questions ready for the salesman at Fairfax BMW (the dealership I am test driving at) around ED and what my terms are for $1,000 over ED Wholesale Pricing.
More to follow…..