BMW/LEXUS selling too fast ?

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Submitted by newbiz on November 20, 2006 - 2:49pm

I remember reading a lot of stuff about how auto companies are having a hard time moving their cars, but was surprised with the cold response I got from dealers when I started looking for a lease last week.

Checked with the Lexus dealership for a LS460, sales person, sounded like he was selling a lot of them and said that he absolutely had no incentives on that car. Had a peice of paper with two configuration listed with prices. Tha was it.

Spent some time with a BMW sales person, who showed me a 550i and a 750i, was quiet reluctant to push for a sale, it was like, we are selling them fast, if not you someone else will buy.

Submitted a online quote request for a 750i to another dealership, got a reply with a quote, Lady calls back, says you need to come to take this to the next step, I am too busy to talk to you on the phone.

So my observation is that Too many ppl in SD are buying 60K+ cars to keep these dealerships super busy.

Also, what is a good time to buy, after Xmas, before Xmas, when is the time when dealers will really try to sell?

Submitted by lindismith on November 20, 2006 - 3:26pm.

The best time to buy a car is on the last day of the month. (My mom used to work in a high-end dealership.) Dealers are willing to stretch a little further to make their numbers then. That's to buy though. Do not know if it makes a difference to lease.

Interesting about them not jumping all over you. Maybe the sales people are all burnt-out ex-real estate agents?

Submitted by an on November 20, 2006 - 3:26pm.

Best time to buy is at the end of the year on the end model year. So, since you're looking at hot cars that just got released, of course they won't deal w/ you on the price.

Submitted by VanMorrisonFan on November 20, 2006 - 3:43pm.

Best time to buy would probably be after Christmas...say, the last day in January.

Submitted by bubble_contagion on November 20, 2006 - 4:52pm.

When I was looking for cars last July, BMW and Lexus didn't have incentives but other brands had. Those brands are currently very hot with mostly new models.

Submitted by sdrealtor on November 20, 2006 - 5:54pm.

Call me crazy but anyone who spends 80K on a car is nuts unless they have way too much money. In that case they should have too much money to spend and should be buying real estate too. HMMMMMMM.....Note to self: Hang out at Lexus/BMW dealerships.

Submitted by heavyd on November 20, 2006 - 5:59pm.

I don't think you're going to find any incentives on the new LS460 for at least a year. It's a new, highly desirable model, and volumes tend to be limited at launch, so it's a sellers' market at least until they ramp up production. I would be surprised, however, if you could not get discounts on the 7-series as this has been around for several years and is due to be replaced fairly soon.

Submitted by mixxalot on November 20, 2006 - 8:01pm.

Good points. I drive a 1996 BMW 328is that I bought 3 years ago for 13k. It had 55k original miles and buy new car is waste of money. Yes, one has to pay for maintenance and repairs but its better to save than to throw money away.

I would love a new 335i coupe but with these cars selling for MSRP sticker at almost 50k new for a new BMW that might be worth 20k if that in a couple years why do something so foolish? To me, its better to invest in high growth funds that make me money than a depreciating car.

UNLESS you have a business there really is no point in paying a lot for a new car of course if you have money to throw away thats another matter.

I did notice the same issue with new BMW dealers in San Diego. Some guys like BMW of San Diego and Brecht BMW were arrogant and wanted full sticker MSRP on a new 3-series car. I did find Cunningham to be the friendliest dealer in town. Heck when I spent 3k on new suspension they gave me a new BMW to use for free while they spent 3 days fixing my car.

Even if I spent 15k over a few years its cheaper to maintain, insure and register a used BMW than a new one with thousand dollar car payments each month. God forbid how filthy rich those people with brand new Aston Martins, Porsches and Ferraris must be these days. Or deep in debt.

Lexus is overpriced Toyota. Nice car but would just as rather have a nice leather interior in a Toyota Avalon or loaded Camry for half the price. Same for Audi which is an expensive VW.

Submitted by CAwireman on November 20, 2006 - 8:19pm.

Not that you'd want a US manufacturer's car but if you wanted to see some drooling, ready-to- deal dealers, I think you'd easily find them at Ford or Chevy dealers.

The Foriegn auto's (especially, BMW, Benz) are for whatever reason, nearly permanently trendy.

Maybe a year or so from now, the market for luxury cars will drop. But, just as the $ million dollar and above home buyers are insulated to some degree from the RE bubble (they aren't as dependent on next week's salary)they are also able to afford the luxury vehicles.

Submitted by an on November 20, 2006 - 11:25pm.

mixxalot, if that's your argument against buying a new car, then why did you buy a $15k used BMW when you can buy a $3k civic and invest the other $12k? That $3k civic will be much cheaper to maintain and last a lot longer than your BMW will too.

So if you're saying Lexus is overpriced Toyota, then you're saying everyone should buy a Yaris since a Camry or Avalon is just an oversized overpriced Yaris. I wonder why anyone would buy anything else than a used Civic.

Submitted by BikeRider on November 21, 2006 - 8:50am.

At Bankrate.com they state- "For most people, 15% of after-tax monthly income is appropriate for total monthly car payments." So, that should determine how much car (or cars) you can afford in the family. If your household income is $4k after tax, then you can afford a $600 car payment. One expensive car or a couple of Civics.

http://www.bankrate.com/brm/auto-adviser...

Most people lose their mind when they enter a car dealership. My wife and I were buying a Mazda 626 years ago and the dealership was a Mazda/BMW place. In the cube beside us was this young guy, with I think his wife, and he really, really wanted this new BMW model. He was already upside down in some other BMW they had and was trying to work a deal on the new one, trading in the older one. I actually heard the salesman say to him that he would be crazy to buy the new car because they were going to add even more money to the loan to pay off the current car he was driving. He'd be so upside down that it just didn't make sense. He'd be stuck in the new BMW for years and the car would end up costing him about three times the sticker price. The salesman asked him to not buy the car, but the young guy would not be swayed.

I restore old machinery and take it to tractor shows. I wanted a powerful truck to haul my tractors. My current truck is wearing out. I've been looking at Ford F250's with diesel engines. New they sell for $46,000. I can afford the truck, but it is just too crazy to buy new. You lose so much money. I found a five year old F250 that had been very well maintained with only 32K miles on it. I paid cash and got it for $21,000. Less than half the cost of new and very low miles considering that the 7.3L diesel has a life expectancy of 300K miles. Plus, property tax will be much lower, as is insurance on the vehicle.

The best deal is a one to two year old vehicle. Let someone else take the hit on paying for the new car smell. People saw my truck and thought I had bought a brand new truck.

Submitted by PerryChase on November 21, 2006 - 2:07pm.

I read somewhere that luxury cars are the fastest growth segment of the auto industry. People have come to expect to drive a luxury car as part of self-fulfillment. It's psychology more than anything else. Especially, in Southern California, we are judged by the kind of car that we drive so people are willing to make sacrifices to be own a nice car.

It used to be that we bought expensive cars for reliability. But now, all cars are pretty much very reliable. So we buy car as an extension of our personalities.

I'd like a Maserati because they are sexy looking. ...but they are too rich for my blood.

Submitted by poorgradstudent on November 21, 2006 - 2:40pm.

Man, I feel fortunate that I view cars as a tool rather than some sort of statement on who I am, or method to make up for some inadequacy.

15% of monthly after tax income sounds really high for a car. I spend 0% of my monthly income on a car. It's a '96 Grand Am I bought used for $1500 cash a year and a half ago after my last used car needed $3000 worth of repairs just to stay on the road.

Maybe at some point in my life I'll value nice cars more. I'm lucky right now that I can ride a convienient, short bus ride to work, so I only drive to my friend's houses and places like the grocery store (I could walk or bike, but I like to make large shopping trips less frequently).

It's so beneficial to my financial situation not to have a car loan.

Submitted by PerryChase on November 21, 2006 - 3:51pm.

I'm with you poorgradstudent. I don't mind biking or walking. Given a choice, I wouldn't have a car.

Yeah, looking at cars to judge people is shallow. But the reality is that we live in a consumer-driven society. People do judge you by what you drive. America is a country of social climbers and people forget very quicky where they came from.

I'm sure that as you get your graduate degree and take on a professional job, you'll get "assimilated" very quickly.

Years ago, a friend of mine was in medical school and driving a rusted old Ford. Now he's a big shot and one day we were riding in his car. We were at a stop light and he made a snide remark about the car next to us "Geez, how can people drive such old crappy stuff?"

Submitted by mixxalot on November 21, 2006 - 11:21pm.

I agree that people spend too much on cars given their financial ability. For me, I drove beater cars for years and always liked BMW since I was a kid for their sporty design and fun engineering. Not for status. Now I enjoy the solid build and handling and keep it running. New BMW not worth the expense. Of course, I could buy a Yaris for 12k but its a tin can on wheels and if some fool hit me, I would end up in a casket. My car is paid off and all major service up to date. Now saving for home and waiting for downturn.

Submitted by an on November 22, 2006 - 10:19am.

I don't see the difference between you buying a used BMW and some one who buy a new one? What if they love the design and engineering of the new one as much as you like yours? It's all relative.

Submitted by CAwireman on November 22, 2006 - 2:04pm.

My wife and I share a 2000 Honda Civic and a 1999 Chevy Tahoe (2-door) interchangably - though she drives the Tahoe now since her commute is so short (less gas). Both were purchased used and are paid for. (Since we rent, we are currently living in a debt-free zone)

The Tahoe was purchased to go up to the mountains, drive through snow and also let's us pull a boat (bought used and is also paid for). The Civic was purchased originally for my wife to learn to drive. But, since our commutes are short for her and longer for me, we swapped vehicles. Even though I drove a sporty convertable for many years before (bought used and drove it for 13 years), I have no problem driving the Civic now.

Some of our friends drive really nice auto's and others not. Luckily none of our group members judge people on what they drive (as far as we know, wink). Everyone just drives the car they think is the best fit financially & practically.

There there's the remainder of California (most on this forum excluded!).

Submitted by equalizer on May 5, 2009 - 10:26pm.

Lets follow up 2.5 years later:

3 Series sales fell off a cliff YOY, down 47%, while the 5 series down only down 10%. Neither model is new this year. So do 5-series fans have real wealth, while 3 series fans are all stretch the lease folks?

"Sales of BMW brand vehicles decreased 41.3 percent in April for a total of 15,705 vehicles compared to 26,735 vehicles reported in the same month a year ago. Year-to-date, BMW brand sales were down 31.3 percent, to 58,436 vehicles compared to 85,100 vehicles sold in the same period of 2008."

http://www.autospies.com/news/BMW-Extend...

Submitted by creechrr on May 6, 2009 - 5:54am.

Maybe this will be a trickle up affect, similar to what we are seeing with housing. Give it a couple of months.

Bigger the house, bigger the HELOC?

OT: I'm looking for 2000-2003 525iT or 528iT. If anyone comes across one in good condition at a reasonable price give me a hollar. The kid is getting bigger.

Thanks.

Submitted by Coronita on May 6, 2009 - 7:13am.

creechrr wrote:
Maybe this will be a trickle up affect, similar to what we are seeing with housing. Give it a couple of months.

Bigger the house, bigger the HELOC?

OT: I'm looking for 2000-2003 525iT or 528iT. If anyone comes across one in good condition at a reasonable price give me a hollar. The kid is getting bigger.

Thanks.

You're asking for a big headache imho(a 6-9 yr old BMW that is)...Even if you buy certified, you won't get free free maintenance. Plus repairs on a car with pseudo gremlins = big money pit...Not to mention the weight of the 5 series with a those smaller V6 engines = slow pig.

You should be able to find something around $14k or lower (excluding all the headache repairs/maintenance afterwards)

Submitted by creechrr on May 6, 2009 - 7:33am.

Flu,

I appreciate the input.

I've taken the maintenance factor into account. I believe I can take care of most mechanical issues myself or with the assistance of a mechanic. I like turning wrenches. The electrical gremlins are what concern me most but, I currently drive a VW.

I would actually prefer a 528iT since it has a bit more power and seems to be "better priced". I've been eyeing one in the $7.5K range for some time now. I'm willing to be they'd take $6K.

I've also been toying with the idea of a Rotrex SC. I haven't put too much effort into seeing what available for the 2.5L or 2.8L engines.

This would also be my first experience RWD. I've done FWD to death.

I really miss my old Civic...275whp and 2200lbs is a whole lot of fun!

Do you have any suggestions for a suitable replacement? No SUV/CUVs.

Submitted by Coronita on May 6, 2009 - 7:46am.

creechrr wrote:
Flu,

I appreciate the input.

I've taken the maintenance factor into account. I believe I can take care of most mechanical issues myself or with the assistance of a mechanic. I like turning wrenches. The electrical gremlins are what concern me most but, I currently drive a VW.

I would actually prefer a 528iT since it has a bit more power and seems to be "better priced". I've been eyeing one in the $7.5K range for some time now. I'm willing to be they'd take $6K.

I've also been toying with the idea of a Rotrex SC. I haven't put too much effort into seeing what available for the 2.5L or 2.8L engines.

This would also be my first experience RWD. I've done FWD to death.

I really miss my old Civic...275whp and 2200lbs is a whole lot of fun!

Do you have any suggestions for a suitable replacement? No SUV/CUVs.

It's not just the labor, it's also parts for Bimmers are an arm and leg sometimes. Bimmers are great cars, if well taken care of...Unfortunately, most owners expect Honda reliability without spending more than Honda maintenance dollars...Which is kinda the problem especially if you buy used.

Also, you know, the 5 series looks bigger than it actually is on the inside. If in doubt, go sit in the back of a 5 series. It's not as roomy as most people think it is.

Do you care about whether is a FWD or RWD or AWD?
If not, how about a certified Acura TL? Or for more luxury, Acura RL...(these aren't selling at all and depreciation has been a huge problem People aren't a fan of the exterior styling). If you want something with slightly more punch, you could look for a TL Type S...You'll probably be able to drive those for 100k+ miles. Again, I'm assuming you want a bigger car to fit your family.

I could say the same about Lexus, but I'm not a big fan of Lexus.

Submitted by creechrr on May 6, 2009 - 8:39am.

I understand and agree with your points. I've decided that from here on out, it's hatchback/wagon for me. No more trunks. I want to pile in myself, wife and son along with whatever cargo I need to take without too much hassle...not going to happen in my Jetta. I can't drive comfortably with anyone behind me and the passenger side isn't much better. I place my son's car seat in the middle and his feet are just about on my shoulder. Another six months and he'll be kicking me in the face. Any additional passengers have to ride in the trunk.

I've had nothing but, Japanese cars till I got the Jetta. I have to say, I like the German cars. The Japanese cars don't really have any soul or character anymore. The Honda golden years are gone.

I had considered a Allroad/A6 till did some research on the 2.7L TT. Can you say ticking time bomb?!?!? That engine bay screams money pit. Just about anything that needs to be done, the engine has to come out of the car. I won't even mention the air suspension and electronics.

I would never drive the thing because I didn't want it to break. Oh, the anxiety...lol

Submitted by kev374 on May 6, 2009 - 10:03am.

sdrealtor wrote:
Call me crazy but anyone who spends 80K on a car is nuts unless they have way too much money. In that case they should have too much money to spend and should be buying real estate too. HMMMMMMM.....Note to self: Hang out at Lexus/BMW dealerships.

This is how people become poor. They blow their money on cars that depreciate 20% when they drive it off the lot. Most people who buy BMWs/Lexuses really cannot afford it by a long shot.

In my opinion to afford a $60k car you should have a net worth excluding primary residence and retirement of at least $500,000.

Submitted by an on May 6, 2009 - 10:10am.

kev374 wrote:

This is how people become poor. They blow their money on cars that depreciate 20% when they drive it off the lot. Most people who buy BMWs/Lexuses really cannot afford it by a long shot.

In my opinion to afford a $60k car you should have a net worth excluding primary residence and retirement of at least $500,000.


So to afford a $20k car, you'd need a net worth a 1/3 of that?

Submitted by Coronita on May 6, 2009 - 10:23am.

kev374 wrote:
sdrealtor wrote:
Call me crazy but anyone who spends 80K on a car is nuts unless they have way too much money. In that case they should have too much money to spend and should be buying real estate too. HMMMMMMM.....Note to self: Hang out at Lexus/BMW dealerships.

This is how people become poor. They blow their money on cars that depreciate 20% when they drive it off the lot. Most people who buy BMWs/Lexuses really cannot afford it by a long shot.

In my opinion to afford a $60k car you should have a net worth excluding primary residence and retirement of at least $500,000.

Well, the irony is that a lot of americans "finance" their stuff. Whether it be a lease or taking out a loan. It's the american way. Buy now, pay later.

With the exception of possibly Realtors, salesman,etc that makes sense to lease since it can be written off, I would say a majority of people buy cars on lay-o-way because they really can't afford the car. It's one thing to spend a lot of money on a car and then deprive yourself of everything else. (that would be an choice). But americans also spend money on everything else. Spend spend spend spend..

Just the other day I was at the dental office and the person in front of me was haggling with the office manager about a "payment plan" for dental work. I guess she was having some stuff done that was around $1000. She first asked if anethsia was covered by her medical insurance (uh no...)..And then said that if it would be possible for the dental office to break her into monthly payments. The office manager first said the standard payment would be $500/month...But the person insisted if she they could do $300/month install payments because she couldn't afford a higher payment.

Then the other day I was looking at craigslist. You have a person that apparently lives in carmel valley selling his camera stuff for $1000 because he is "unemployed" and needs the money.

I use to ask if people really are that bad when it comes to managing money and cut it that close, and have no savings...I no longer ask....

Submitted by Allan from Fallbrook on May 6, 2009 - 11:21am.

FLU: My wife used to do financial planning before becoming a stay-at-home mom and I remember going through her programs on savings and retirement one time. It was terrifying. The number of Americans that are prepared for retirement is only about 4 - 6% (meaning you have sufficient cash flow, savings, retirement funds, etc to carry you through).

I watch the number of people that pay for groceries with credit cards and locally that number is about 6 out of 10. Not debit cards, credit cards.

For far too many years, people equated wealth with credit and the two have nothing to do with each other. The people really getting squeezed are those that relied on having access to all that credit and now it's being taken away.

Submitted by kev374 on May 6, 2009 - 11:24am.

AN wrote:
So to afford a $20k car, you'd need a net worth a 1/3 of that?

it's not a linear scale that way. It's needs vs wants. The first $15-20k of car may be a *need*, you need decent transport for work etc. But the other $40k is then fluff that can be afforded only if you have all your other more important financial priorities set...savings, retirement, emergency fund, kids college, home paid off, investments etc. etc.

Submitted by carlsbadworker on May 6, 2009 - 12:06pm.

Allan from Fallbrook wrote:

I watch the number of people that pay for groceries with credit cards and locally that number is about 6 out of 10. Not debit cards, credit cards.

I don't know why you have such an issue with the credit card users. Ever heard of credit card rewards? It is a blessing that so many others are paying credit card companies such an enormous amount of fees each month... because they essentially subsidize the rewards that I'm receiving.

Submitted by an on May 6, 2009 - 12:20pm.

kev374 wrote:

it's not a linear scale that way. It's needs vs wants. The first $15-20k of car may be a *need*, you need decent transport for work etc. But the other $40k is then fluff that can be afforded only if you have all your other more important financial priorities set...savings, retirement, emergency fund, kids college, home paid off, investments etc. etc.

You don't NEED a $15k-$20k car. You can get a decent used civic that runs well for $3k-$4k. So, a $20k car is a luxury. You don't ever need to buy a new car.

Submitted by an on May 6, 2009 - 12:22pm.

carlsbadworker wrote:
Allan from Fallbrook wrote:

I watch the number of people that pay for groceries with credit cards and locally that number is about 6 out of 10. Not debit cards, credit cards.

I don't know why you have such an issue with the credit card users. Ever heard of credit card rewards? It is a blessing that so many others are paying credit card companies such an enormous amount of fees each month... because they essentially subsidize the rewards that I'm receiving.


+1. I RARELY use cash anymore. Only time I do, is when the merchant doesn't accept credit.

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