Advice on getting a fair price from a dealer on a new bike?

[Joe Frickin' Friday]

I like driving/riding new vehicles, but I hate buying them.  I'm not a good negotiator, so I rarely feel like I'm getting a good deal.  It's about to happen again, and I'm getting anxious.  If I were looking for a new Honda Civic, there's maybe a dozen independent dealers in the Detroit metro area who'd be competing with each other, and I'd feel like they have some incentive to cut their price to the bone.    But I'm not: I'm looking for a new R1250RT, there are two BMW dealers in Detroit, and both are owned by the same company. 

 

I anticipate doing nearly all of my own service, so loaner bikes (offered to customers who have bought bikes from that dealership) have very limited value for me.  In theory, I could buy somewhere else (Grand Rapids, Chicago), but I don't have a trailer, and slab-riding a brand new bike for several hours straight would be unkind to the motor - and a one-way plane ticket and one-way U-haul rental would probably negate any bargain I could get by buying far from home.  

 

I'd be trading in a well-used R1200RT; they've already suggested a trade-in value that seems sort of fair.  So what can I do to maybe convince the dealer to lower the price a bit? Take BMW's financing (as opposed to financing by a local bank unaffiliated with BMW)?  Pay cash?  Ask for a free/at-cost service manual?  I'm not expecting a discount of several thousand dollars.   $500 would feel pretty good, and even just a few hundred would feel like I've been acknowledged, as opposed to just getting "firm price, take it or leave it" treatment.  

 

[BrianT]

I don't know if this still holds true, but it used to be the dealers only made $500 on the sale of a new BMW bike.  So they really wouldn't drop the price at all unless it was an older model, demo, etc they had a reason to get rid of.  But they used to work with you on discounts towards accessories or gear purchased so they wouldn't loose money on a sale. My local dealer tends to stock up on used bikes for sale and only carry a few new bikes on their floor.  Don't know if that's a sign or not of where they still make their money.

[Dave_in_TX]

3 minutes ago, BrianT said:

I don't know if this still holds true, but it used to be the dealers only made $500 on the sale of a new BMW bike.  So they really wouldn't drop the price at all unless it was an older model, demo, etc they had a reason to get rid of.  But they used to work with you on discounts towards accessories or gear purchased so they wouldn't loose money on a sale. My local dealer tends to stock up on used bikes for sale and only carry a few new bikes on their floor.  Don't know if that's a sign or not of where they still make their money.

I heard their markup was about 13%.

[Dave_in_TX]

You nay want to make service/repair info a requirement of a sale. The word is that repair heals are now only available to dealers. The is a long thread on advrider.com regarding this.

[Dave_in_TX]

I don't know it is still true but  BMW used to offer a $500 discount to MOA members.

[AviP]

Have a friend who is good at negotiating make the call. Asians are the best negotiators. 

[Skywagon]

Find a bike at an out of town dealer for the price you want. Show it to your dealer and ask them to match. 
 

My last 2 new BMW bikes, I asked to get the 600 mile check up for free and they did. I also asked for accessories and parts discounts.  I got my Nav for 1/2 price, my top case for 30% off, and 10% lifetime discount on parts.  I got a few hundred off list. 
 

I paid them with folding money so who knows how they recorded it. 

[chrisolson]

1 hour ago, Joe Frickin' Friday said:

I'd be trading in a well-used R1200RT; they've already suggested a trade-in value that seems sort of fair. 

 

From a few years experience in the "car business" .... but same for bikes.

 

The dealer's mode of business is to make money on both deals ... both the subsequent sale of the trade and the new purchase.  Double check average asking prices for your trade-in model/mileage and then consider if its fair ... ie if its close to the average used asking prices ... its probably a fair offer.

 

Asking for service or small accessories is always a good idea ... dealer can offer retail discount but only has to "book" his wholesale cost.

 

BMW financing at times did offer decent rates or even discounts ... should be able to check online at the BMW site. 

 

Also note that the dealer makes additional money on  financing that they negotiate on your behalf at local banks credit unions etc ...in today's market paying cash may actually lower a dealer's profit potential so there's less incentive to discount.  If you do plan on financing, get quotes yourself from various lenders. 

 

Negotiating in general depends on the "hotness" of the item you intend to purchase ... obviously items in high demand  = less/no discount

 

[Joe Frickin' Friday]

21 minutes ago, chrisolson said:

Double check average asking prices for your trade-in model/mileage and then consider if its fair ... ie if its close to the average used asking prices ... its probably a fair offer.

 

I get that they need to make money on the trade-in.  What's a reasonable differential between trade-in value and fair-market value for a bike with a FMV of around $6K?  

[Twisties]

First, congratulations on your move.  I think you'll love the 1250.  With the 1300's apparently close to release, I would think there will be incentives/softness in 1250 pricing.  But, it might come a little later. 

Just my humble opinion, having bought two used R 1250 GS a year ago, consider a year or two year old bike.  It will still be under warranty, and we've no trouble with either of ours.  If you buy a bike that was dealer serviced they can pull and print the complete service record so you can check for any lemon issues and ensure that service intervals were maintained.  You won't feel bad about riding a bike home if it is already broken in.  If price is really a factor, wait for the 1300's to come out.  Used 1250's will take a hit.  Cycle Trader is your friend.

I think the $500 profit must be BS.  In SLC, a single dealer market, it was always full MSRP plus destination charge.  One of the CA dealers was paying for your airfare to the LA area and giving a large discount.  I want to say it was Irv Seaver and it was like $1500 below msrp.  I definitely think a multi-dealer market is your friend if you want to negotiate on price.  Otherwise, I would expect to pay full price and maybe get 10 -15% off on accessories and maybe a free first service.  

One more thought, Mitch:  GS.  Really.  

[chrisolson]

1 minute ago, Joe Frickin' Friday said:

 

I get that they need to make money on the trade-in.  What's a reasonable differential between trade-in value and fair-market value for a bike with a FMV of around $6K?  

 

for bikes its a bit different, for cars KBB can give "trade in" value and "private party" sale values and I always look for private party sale or close to it for my "negotiated"  trade value.

 

I'd offer a wild guess and say if they've offered around $4.5 - 5K give or take on something that _may_ sell for $6K ... its a pretty fair offer.  I'd balk at $3.5K or less ... 

 

ACV or actual cash value which is what the dealer books as "cost" based on their evaluation... any value above that (like showing a trade value to the customer of $5K on an ACV of $4500) the dealer already considers that a $500 discount on the overall deal. But most dealers won't tell you what they consider the ACV to be ... depending on the situation, some might.

 

Some other probably obvious thoughts ...

 

Its all about condition , "well used " ... ? very high miles obviously puts some buyers off so dealer will go low knowing harder to sell ,  scrapes/dents ... needs tires? ....service up to date?  Items that will cost dealer $$ before presenting for resale are all factored 

 

[Rinkydink]

It seems to me, not having a BMW dealer in my state mind you that there are more GS’s than RT’s available so it would depend on what model you were buying. I always at least get a free 600 k service and try to hit them up on free or cheap accessories. My last RT (2022) I ordered Illium front and rear guards and bar risers (private sale,  not thru dealer) delivered to the dealer and got them installed for free. Got a good buy on my topbox also. I got the $500 off via MOA but that perk is now gone. They may still do the armed services discount though if you are a vet. Service manuals are a thing of the past. I again am at a disadvantage because I have no local dealer. They are 280 miles away. Warranty work or recalls require an overnight stay. But I’m 67 and want what I want and I want it now. This does not fare very well in my favor.
 

You live in a more densely populated part of the country than me but don’t take that local dealer for granted. It sucks when they close up shop. 

Good luck. The difference between my ‘17 RT and ‘22 RT ( my fourth RT) is pretty substantial. 

 

[roadscholar]

2 hours ago, Joe Frickin' Friday said:

 

I get that they need to make money on the trade-in.  What's a reasonable differential between trade-in value and fair-market value for a bike with a FMV of around $6K?  

 

They'll try to get it for 3k or so but it's your job to get them to go 4 : ) Like Jan alluded to, if you really want a good deal let someone else take the initial depreciation hit, find a slightly used one then sell yours either here or elsewhere. A little more work but worth it to some. A quick glance at Cycle Trader seems new ones are in the 27-30k range, then they'll add destination and fees (added dealer markup). You might get 1-1.5k off that with some haggling but could save many thousands on a very nice used one. Course it might involve a fly and ride but those are almost always fun.

[Joe Frickin' Friday]

1 hour ago, chrisolson said:

I'd offer a wild guess and say if they've offered around $4.5 - 5K give or take on something that _may_ sell for $6K ... its a pretty fair offer.  I'd balk at $3.5K or less ... 

 

Turns out KBB says my bike's "typical listing price" is $6870 (higher than I remembered), with a trade-in value of $4740:

https://www.kbb.com/motorcycles/bmw/r1200rt/2009/?pricetype=trade-in/

 

Odd that mileage (I'm at about 59K) isn't a factor in their estimates.

 

I appreciate the advice to look for a slightly used bike instead of a brand-new one.  But most of you know me long enough to know that don't replace my vehicles very often.  My 1100RT went for ten years and 135K before I sold it, and my 1200RT is now 14 years old with 59K.  If I'm gonna keep the next one for 10+ years, then I'm willing to pay a premium to get one that's only ever been mine and nobody else's.  

 

14 minutes ago, Rinkydink said:

don’t take that local dealer for granted.

 

Understood, certainly.  Even though I do my own service, it's nice to have a dealer just 20 miles away.  I'm not looking to screw them over, but at the same time I don't want to be screwed over.  A fair profit, and no more (or at least as close to that as I can manage).  

[roadscholar]

8 minutes ago, Joe Frickin' Friday said:

I appreciate the advice to look for a slightly used bike instead of a brand-new one.  But most of you know me long enough to know that don't replace my vehicles very often.  My 1100RT went for ten years and 135K before I sold it, and my 1200RT is now 14 years old with 59K.  If I'm gonna keep the next one for 10+ years, then I'm willing to pay a premium to get one that's only ever been mine and nobody else's.  

 

 

Also like Jan mentioned, they'll get discounted a good bit when the new latest and greatest model arrives, a little patience could save a lot but by then you might want to just get the new one : )

[Skywagon]

I came really close to buying out a BMW dealer. It gave me a chance to examine financials closely. That dealer finally went wheels up. I signed NDA’s so I can’t reveal exactly the financials. What Dave in tx posted above on margin isn’t far off, but is actually a little low. There is room to negotiate if you have the will, time, and legitimate competition. 

[John Ranalletta]

4 hours ago, Joe Frickin' Friday said:

 

I get that they need to make money on the trade-in.  What's a reasonable differential between trade-in value and fair-market value for a bike with a FMV of around $6K?  

Recently SOLD my '15 GS to a dealer.  Probably could have gotten another $1.5 -2k if I tried to sell it privately.  I wasn't willing to put up with the hassle.  The dealer will recite a list of expenses they'll have including the most recent undone service, new tires, detailing, etc.  Then, there's the cost of money.  Don't know what floor plan rates are but would guess the dealer will be paying north of 7% during the holding period.  When placed on the sales floor, the price will be padded to account for the next trade or discounted for cash, the asking price isn't representative of "market value" which is what someone will pay.

IMO, the used market is very, very soft at the moment.

[Twisties]

38 minutes ago, John Ranalletta said:

IMO, the used market is very, very soft at the moment.

Agreed.   

[9Mary7]

13 hours ago, Skywagon said:

I came really close to buying out a BMW dealer. It gave me a chance to examine financials closely. That dealer finally went wheels up. I signed NDA’s so I can’t reveal exactly the financials. What Dave in tx posted above on margin isn’t far off, but is actually a little low. There is room to negotiate if you have the will, time, and legitimate competition. 

Since I didn't sign NDA's when I left, here is my experience from working in sales at a large multi-line dealer (including BMW).

The BMW pricing sheet on the M/C includes destination/prep so there should be no added fees for that. The mark-up was right about 15% (not including the hold back). If the dealer runs a "pack" on the "back end" then there is a smaller margin on the "front end" where client negotiation is done.

Demo units had a flat 2k discount. BMW made us put 2k miles on those prior to sale, but I don't think that is still required.        

On RT's and GS', gross profit was near $2.5k on a 15 to 16k bike. 

We would always try to get trades for 1k back of wholesale book....... depending on how bad we wanted to do the deal.

(This was 9 years ago FWIW)

I agree with getting an out the door price Email (hardcopy) from other dealers and then giving your local a chance to match it. They should be able to get pretty close, and could throw in some perks since they'll want your service business. Good luck