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Bad Dog, Moderator
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Discussion Starter · #1 · (Edited)
Having a rough day at work today and got a call that originally thought was going to be a pleasure. It didn't stay that way for long...

Dealer called to discuss specs on my Cooper "S". Asked if I had an interest in Cooper as he could get me in sooner. I told him my heart is set on "S" and I want it to be specifically specced for me. No problem. Gave him an idea of what I wanted, color, packages, still no problem. the problem developed when I asked if they were committed to selling at MSRP as I had previously discussed.

A long pause...well...we are selling at MSRP but we will be adding a "package" to each car that consists of "paint protection" "rust-proofing" and floor mats. All for a mere $600 USD. Great. Six hundred bucks for $100 worth of stuff. What a deal. I voiced my displeasure and got a sort of "everyone is doing it" response. I am not impressed so far. MSRP has a built in profit for the dealer. I do not have a problem with the dealer making a good profit and thriving, it''s good for all of us. Forcing me to get three items on my car I do not want just to get it, two of which are totally useless, really frosts me.

The guy who called me is not the salesperson who took my deposit. I'll be calling her back when she returns from San Francisco and see if she can put this right.

Aggravated in Rochester.:mad:
 

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Doesn't surprise me

It's very common "internal" knowledge that there is truly NO ROOM on these cars, salespeople will need to sell other cars or used, unless they're the only person selling them. My dealer, whom I'm in very good with, told me they'll be throwing on lots of stuff, albeit much more worthwhile. I was told they'll be doing appearance stuff, accesories, wheels, etc. Not to mention that you'll be able to get a coilover suspension, engine goodies and such straight from the dealer, installed, and part of your payment.
 

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Gromit,
They can't do it! When you order your car the build sheet will not show any of that extraneous, useless b.s. that they want to add.
You can refuse to pay for it and still drive away in your new MINI. There are laws that protect the consumer from this type of abuse. Two cans of scotch guard for 10 bucks at WalMart and 20 bucks worth of extra polish are not worth $600-!
 

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I was told our cars would all have the $600 "paint protection package" :rolleyes: but I intend to fight this to the finish.......I WILL NOT pay extra for it.
 

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not to mention that the underbody rustproofing some dealers add actually increases the likelyhood of rust and can void the car's factory warranty. They drill holes into the frame and shoot their magic "goop" into it, thus creating more spots for rust to invade rather than preventing it.

I've allready told my dealer that I won't take delivery of a car with anything on it I do not want, especially the underbody protection and any added pinstriping or non factory details. I want the car factory stock, no exceptions. Any modifications from stock will be at my request or with my approval.

Whether they sell me a car with these terms or not I don't know, if they cause any problems though I will make it my personal hobby to give them he-ll and spread the word about it.

I will be ordering well over $600 worth of dealer options more than likely, if they can't accept the profit from those instead of some snakeoil paint treatment then we're gonna have a problem.
 

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Bad Dog, Moderator
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Discussion Starter · #6 ·
$2,165 Profit on my MINI

According to the Kelly Blue Book website refrenced in this thread: http://www.mini2.com/forum/showthread.php?s=&threadid=5019

My MINI retails at $23,400. Invoice on car is $21,235. I can't believe this is not enough to keep the lights on at Towne MINI without them adding on some crap I don't want. This does not even include the dealer holdback (if any) whick is usually between 1 and 3 percent of invoice. I don't know if MINI is doing a dealer holdback.

Any "Insiders" care to comment? If these numbers are true it would seem MINI may not have "no room".

This approach has put a bad taste in my mouth...I can easily see how I would have spent $600 on junk at the dealership, Radio Control MINI, Sweatshirts, etc.
Not now!:mad:
 

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Bad Dog, Moderator
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Discussion Starter · #7 ·
Follow up...

Fired off a friendly email to my sales person at Towne MINI regarding this matter. I will post her reply when it is received.

Anyone else getting pressured into "mandatory" stuff they don't want?
 

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One thing to keep in mind here is that not a large profit per car for the type of service and care that is required for the long term by MINI. I used to work for Chevrolet, and that is the level of service that a small profit will buy, it was not a pleasant environment for customers. MINI is trying to provide BMW service on a MINI budget(no pun intended). Not all dealers will "load" the cars, but you have to expect that they will want to make back some of their investment while the demand is high, initial launch, etc. MINIUSA is watching everyone, so as to be sure that things go well.
 

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TimR said:
One thing to keep in mind here is that a $2000 profit per car is small for the type of service and care that is required for the long term by MINI...
TimR, I'm afraid I'm not following your reasoning here. By the phrase "$2000 profit per car is small for the type of service and care that is required for the long term by MINI". Hmmmm.... at least for remainder of 2002 all you (or any other US MINI dealership) need to do is accommodate the hundreds of people who are beating down the doors of your dealership waving cash in hand, kicking and screaming to buy a MINI.

It seems like they are not going to require a whole bunch of care and coddling to get them to sign on the bottom line. All a US MINI dealership needs to do for the time being is treat customers decently, charge a fair price (MSRP is certainly fair for all involved), be able to answer customer questions in an informed manner, and organize the long waiting list, order process, and subsequent delivery of MINIs. I don't even think you need to offer customers any coffee while they wait. :)

I’m sure there is something I’m missing in all this, so please enlighten me why only $2K markup per unit makes things a struggle.

TimR said:
...Not all dealers will "load" the cars, but you have to expect that they will want to make back some of their investment while the demand is high, initial launch, etc
So is it a long term situation like you first mentioned at the top, or is it a short term cash-grap like you state above? :confused: Those things seem to be in conflict with each other. Dealer price gouging will not create happy long term customers.
 

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You are correct, price gouging will not make long-term customers, nor happy customers. Not all dealers are loading the cars, either. I am just saying that there are those who will try to make the best of a small supply/large demand situation. Someone used to selling BMW's, and providing a certain in-store environment, will not get much profit per unit on a MINI for the first year or two depending on the investment they made.
 

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TimR said:
...Someone used to selling BMW's, and providing a certain in-store environment, will not get much profit per unit on a MINI for the first year or two depending on the investment they made.
Obviously they knew this well before they invested in a MINI franchaise and it was an important part of their detailed business plan. No excuse to regret it or complain about it now.

I hope, among other things, they were counting on the goodwill of happy MINI customers perhaps becoming, or referring, a number of BMW customers.
 

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I was informed that my MINI S will cost me $500 over MSRP and options I wish to have. This customer gouge-fee is for "dealer prep" - you know - make sure air is in the tires, oil is in the engine, etc. No mention of rust-proofing or paint protection. I was told that this is standard for all BMWs. Best I can figure is that the dealers are trying to make some up-front money to cover the 3-yr scheduled maintenance that is included in the MSRP.
You know, I really like this car and am looking forward to when mine comes in (not ordered yet). It is going to be interesting to see what U.S. customers are really going to pay for their cars and how they respond to dealer's atempts to pad their pockets. Going to be an interesting couple of months.
 

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MoMini said:
...Best I can figure is that the dealers are trying to make some up-front money to cover the 3-yr scheduled maintenance that is included in the MSRP....
Please correct me if I'm mistaken, and I'm sure that this can be argued many ways, but the 3-yr scheduled "free" maintenance is bundled into the price of the car, so the customer is paying for it, and/or the manufacturer is taking the hit by making it part of the car's warranty - but it is not the dealer suffering.

If anything, it is training MINI owners to take their cars to the dealers for simple maintenance items like oil changes. A habit, which of course, the dealers hope will continue beyond 3 years. :)
 

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MoMini,

That's B.S.

Removal of the protective plastic covering the seats, and roof should be covered under the delivery of the vehicle. As for checking fluids. They come from the factory filled. The likelihood of them needing to be topped off is small. If they do and there's a leak, then it needs to be fixed, before you take delivery, and covered by MINI/MINIUSA.

When you take delivery the salesman should walk you through an inspection of the features of your vehicle. You'll want to make sure it has all of the features you paid for. Part of that inspection should be of the fluids. They should point out where you refill the radiator, the windshield wiper fluid, and where the dip stick is. Take a lint free paper towel with you to check the oil before you leave.

If we use $2000 as an approximate profit per vehicle, and multiply that by about 286 per dealer per year, you'd get $572,000.

Considering that some of dealers currently only have one or two salesman, that should be plenty to pay the building lease, keep the utilities connected, health, etc.. for a small staff. Forget the Service Department. They'll make their money from warrantee work which will be paid by MINI/MINIUSA.

The only way they'll get away with charging over MSRP + taxes, is if other customers on the list will put up with it. I'd suggest that you attend any grand openings they might hold, where other buyers will gather and collectively tell the dealer to GU02OHL. :) You'll likely find that the others on the list will also find it irritating. Imaging how irritating your dealer will find it if 30-40 people on the list inquire about getting a refund.

Always be prepared to walk away. If you're not, you'll pay what they tell you to pay. For the first time ever, I'm happy to pay my dealer full MSRP. The MINI is well worth the asking price. And being two years out haggling isn't going to happen. However, I made sure that they specified MSRP + license and taxes on the purchase order, and made it abundantly clear that if they tried to tack on any surprise charges, that I would walk away from the deal. And I meant it. I love the MINI, and have wanted one for over a decade. Ever since I spent 6 months living in England in 1990. I've waited 12 years, have to wait 2 more, and am perfectly willing to wait longer. I have transportation. I don't need a MINI, I want one.

If your state only has one dealer, it's going to ruin your MINI relationship if you're taken advantage of on the first date.

No matter how many people have expressed enough interest to place deposits, the dealers are still going to have to do some work to prevent people from loosing interest and seeking a refund. I'm speaking here of the US and Canadian markets, as none of us (dealers, and press excluded) have driven a mini yet, and many haven't even sat in one. They could end up being too small for some. Taking advantage of customers, isn't going to boost interest. And the sooner they eliminate their waiting list the sooner they really have to start working harder.

Raise hell. Don't take it. Collectively you and the others on the list have leverage and can force resolution on the issue.

Cheers,
Brant
 

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Good points, and yes....the 3 yr scheduled maint. is part of the MSRP. Problem is that there are few dealers and they know that. This may indeed be what my dealer charges for all of the cars they sell and the $500 may be acceptable to their BMW customers. What I see as the problem is that the MINI dealers are BMW dealers. Now BMWs are wonderful cars and have earned thier reputation, but the BMW sales people are use to dealing in high-end cars. The MINI is marketed as a fun, affordable car with a "happy motoring" attitude. If MINI has hopes of making this approach work, then I think they need to work closely with their dealers. If we, the ones purchacing the early models, the ones that are going to get their business idea off the ground are treated unfairly, then brand loyalty will suffer. I commend MINI for launching the car at or below the estimated MSRPs that I read about all last year, I only hope that dealer attitudes don't undermine this.
I am curious if anyone else out there that may have a MINI on order from the local St. Louis dealer was also informed of the $500 prep fee.
 

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Bad Dog, Moderator
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Discussion Starter · #16 ·
Yeah, what Brant said!

I've been stewing on this all weekend and wondering if I was willing to take my deposit back and walk away if they try to force me into a bulls**t package I do not want. I have decided that I would. My "S" will be LOADED with everything but the leather, Nav System and Park Distance Control. Aren't those enough options? I am HAPPY to pay MSRP for the first time in my over 20 years of buying cars. MINI has a GREAT PRODUCT! I hope a few short sighted dealers don't muck it up.
 

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If MINIUSA and the dealers play their cards right, many dealers could end up with a perpetual waiting list, and get away with spending very little on advertising.

The way I see it, the first years production is spoken for. Well into the second year too. If that's about 30K in cars, prior to any advertising, those MINI owners will be the largest form of advertising, turning heads of curiosity and disbelief all over the country.

The best forms of advertising, form a question in the viewers head. "What is that?" "I wonder how much fun he's having?" "Where do I get one?" Anything to convert a passive oblivion, into an active curiosity.

If owners can happily recommend dealers as well as the MINI, these waiting lists could continue for years, assuring customers the ability to custom order their vehicles, and get exactly what they want vs. what the dealer wants to sell. Once a dealers list gets exhausted, they're going to have an expensive incentive to sell you the cars on the lot that are costing them interest.

They have an opportunity here, from the beginning, to create both brand and dealer loyalty. I especially like what they've chosen to do with the free maintenance and roadside assistance programs. Given their nonexistent history as a car company in the states, there will be a lot of hesitation from those not bewitched by the MINI's charms. If the positive experiences heavily outweigh the negative ones, in 4-5 years, many owners may become repeat buyers, and get back in line again to purchase.

If they can keep the demand higher than availability, resale value could hold up quite well also. That in turn helps justify the price.

MINIUSA is on the right track, and appear to be positioning the MINI as a competent, high end car that just happens to be miniature in size, rather than a small decontented car. I just hope the dealers don't jeopardize the long tern viability for short term gains. They have an opportunity to get free ongoing advertising. Warning to those in the US whose mom probably told to always wear clean underwear. Well, if you're going to drive a MINI in the first few years, be prepared to meet a lot of people. Be sure to wear a clean shirt. :)

If any of this is incoherent have a heart. About the only thing on my mind has been the pending reviews of the Cooper S.

Cheers,
Brant
 

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MoMini said:
.....I am curious if anyone else out there that may have a MINI on order from the local St. Louis dealer was also informed of the $500 prep fee.
I am on the Cooper S list at MINI of St. Louis. When I placed my deposit back in June 2001 I asked my (BMW) salesman, John Bell, and I was told they sell BMWs without additional dealer markup and they will sell MINIs the same way. It is simply the way they do business I was told.

Over the months since last summer I have also asked several other people at the dealership (Laura Carlson(?) and Joe Caccibando(sp?)) to confirm my MINI will be sold to me at MSRP and was told that is correct, they will sell MINIs at MSRP. Now that they have recently hired MINI Motoring Advisors I have not yet had this re-confirmed, but I certainly do not expect this to change.

(Please Private Message me if you'd like to discuss.)
 

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Discussion Starter · #19 · (Edited)
Dealer response to my email:

My email to Towne MINI:

Monica-

Greg(?) called Thursday to discuss specs on my car. I'm
not happy about the paint and rustproofing package. It would seem
that upon sharing my feelings with other MINI enthusiasts I'm not alone.
see: http://www.mini2.com/forum/showthread.php?s=&threadid=4997
What can we do about this? I have little doubt that left to my own
devices I would spend $600 or more in extra stuff at the dealership,
I just don't want to be *forced* to do so.

I would also prefer to deal with you rather than Greg, I like your
approach more.

Hope you had a *blast* in San Francisco!

Rick
--------------------------------------------------

Their response:
Hi Rick,

Sorry to hear that you were not happy with the MINI situation. I just went
to MINI training in San Francisco and the car is very impressive. We will
be getting our first Coopers this week and I can't wait! When I met with
other dealers, some were mentioning that they were going to sell their cars
over sticker price. That has never been our policy. In this case, the
Protection Package includes floor mats, paint sealant, hand waxing and a
full tank of gas and we are including it on all vehicles to add value.

I will be happy to help you with the order. Thank you for contacting me to
let me know how you feel. I look forward to hearing from you.

Sincerely,
Monica
-------------------------------------------------

My retort:

Hi Monica-

Any chance of a price break on this "Protection Package"?

Full tank of gas - $20
Floor mats -$75
Paint Sealant -$100 (?) (includes $7.50/hr for person putting it on)
Hand Wax -$50 (but should not be necessary with "paint protection")

No disrespect Monica, the "paint protection" seems to add
more profit than "value". I have no problem with profit, I want
you and your dealership to thrive, that is good for me as a customer.
Is there a way to "opt out" of the package and get other dealer options
I might actually want? I'd probably find $600 worth of miscellaneous
junk in my first five minutes with the accessory book. :) Hope someone
at Towne rethinks this policy so both the dealership and the customer
feel like they came out winners.

Glad to hear SF was a good time. Hope to meet you in person
soon at my test drive.


Rick
-----------------------------------------
Then (10 min later) I sent this:
Monica-

One more thing...I am not speccing a "stripped" car.
I want all three factory packages (cold weather, sport,
and premium) and the Harmon/Kardon stereo option.
I just want what I want and nothing more.

Thanks,

Rick
-------------------------------------------

Comments anyone?

I'll post again as this goes along...
 

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Money, Money, Money

$600 of standard options = $60 dealer profit.
$600 of dealer options = $500 dealer profit.

You pick which set of options you would want the customer to buy if you were the dealer.



Note. Prices quoted may not reflect actual values or profit margins actually gained by some dealers. Some dealers may make more profit.
 
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