Wherever the hollow tubes of the InterWeb may reach, there you will find the argument that “it’s always a better idea to buy a CPO used car than a new one.” The mean transaction price of a new car in the United States is about $29,000. That kind of money will get you a loaded-up Camcord, a discounted LaCrosse, or any number of other mass-market sedans… but can it get you the BMW of your dreams? A friend and former co-worker of mine decided to find out, using his own time and money.
(Dramatic voice) This… is his story.
My search is over; now the love affair can officially begin. I had decided on the 535xi because it falls into an unbelievable sweet spot for me. It has the twin-turbo inline six (that eliminated the 2007 5-series and the 2008/9 528xi). It could be found for around $30,000 with the CPO warranty (that eliminated the 550). It has the room to seat four adults comfortably (that eliminated the 335xi). It has the AWD (which eliminated older 650′s, M3s, and M5′s). And it has looks, tech, and power.
So then came the comparison stage, how to compare nearly one hundred 2008′s and 2009′s? After flailing about for a few days and repeatedly confusing cars, I settled on a grid analysis which would score each car on the criteria I considered important; price, miles, exterior color, interior color, premium pkg, cold-weather pkg, sport pkg, heated rear sets, navigation, carfax, CPO warranty end date, etc. Then I weighted each of these criteria based on their necessity. That process gave me a score for each car.
Not knowing what I would say or how the conversation would go, I nervously dialed the dealer that had my top-scoring Bimmer. After I made every mistake that a novice buyer can make in the first five minutes (including naming my price), the salesman told me the car was still on the lot but appeared to have been sold the previous Saturday. WHAT?! Impossible. I was certain he was blowing me off because I had asked for a pre-purchase inspection (PPI). I had a friend with a cell phone in a different area code call and ask about the car. Sold. Damn.
I got a little desperate, calling three dealerships, naming my price, confirming that the options listed in the ad were correct. I focused on cars that had been on the lot for a while, thinking maybe I could negotiate thousands off the price as the dealer would be glad to be rid of it. Not so. A particularly fetching Monaco Blue Metallic w/Natural Brown leather was firm at $32,000 even though it had been available for more than four months. It can’t go any lower, I was told, that’s what we have in the car. What a shame. Oh well, on to the next one.
After another near miss where I ended up perhaps being a bit too eager to buy what was, in retrospect, the wrong car, I cooled it on the phone calls for a few days. All incoming calls from the circling sharks were put off with lame excuses, just enough to get them off the phone. I’m sure I was labeled “luke-warm” on Post-It notes in New Jersey, Michigan, North Carolina, and New York. I deleted my initial grid analysis and started over.
I scrutinized my weightings; asking questions like, do I really care more about the cold-weather package than the CPO warranty end date, and do I care about Nav at all? Also, in this interval I dug into the 535, learning about the HPFP problems, the gremlins in the electronics, warrantied items, and perhaps more important, those items that are not warrantied; like the batteries (foreshadowing). I investigated independent BMW shops, locally and near dealerships I might call. I began reading articles on the psychology employed by salesmen. I learned the techniques that supposedly counter these tactics (silence is big). I compared Fair Market Value (FMV) on KBB’s and NADA’s websites to the Dealer trade-in price. I decided I would be myself; honest and direct. This may seem idiotic, but I have always been uncomfortable when I stray from the truth (though I still sometimes do). I simply refused to believe that I had to lie to succeed.
Now I was ready, renewed, and excited to start again. Maybe I was just a little wiser…maybe. At the top of the list were two; one a 2008, the other a 2009, both blue, both with brown leather, both with sport, cold-weather, and premium packages. The differences were small and/or inconsequential; the 2009 had fewer miles and a longer CPO warranty, and the 2008 had the 18″ wheels. The asking prices were just $200 apart. What swayed me toward the 2008 initially was BMW Financial’s incentives; first two payments and 1.9% APR for 48 months. The 2009 had a respectable offer of 2.9% APR for 48 months. At this point it was February 21st.
I called on the 2008. In my confusion, I had forgotten it was one I had already called on. The price had come down $900 to $32,000 and Bob, the salesman, was emphatic that they needed to get that out of the car just to break even. I was skeptical, and I was armed with some pretty good (as it turned out) estimates of what they paid, and what they put into the car to recondition it for CPO status. I knew how long the car had been on the lot. Finally, I knew that there were other cars. This last bit of knowledge proved to be the most crucial.
I was working against a clock, as well. Due to the impending expiration of the incentives and the 400-mile distance between me and the dealership, the upcoming Saturday, February 29, was the only day I could buy this car.
I explained to Bob that I would not buy the car without a PPI. He responded with details about the CPO program, and the singular excellence of this car. His sales manager was more direct: no PPI, period. I called on the other car, and was told that a PPI would be no problem. The next day, Wednesday, Bob called back. The CFO is involved, he said, and a PPI can be done if I’ll put down a deposit. Refundable? Yes. Done. Paperwork was faxed, signed, and returned. Interestingly, the paperwork I was asked to sign included the $32,000 price tag. I suppose they wanted me to think I had agreed to the price by signing. I was also asked to apply for the BMW financing. I guess they wanted to know if they would be able to sell me a car. (I think asking for the financing worked against them as you’ll see later on.) The inspection was scheduled for Friday morning, February 24th.
Thanks to a busy morning at work, I didn’t see the results of the inspection until 11:30 AM. Codes pulled from the computer showed 11 separate items. Uh oh. “Not to worry,” said the inspector, “I think it is all due to a dying battery. Ask them to replace it.”
Now I’ve got a problem. Maybe all of those codes are battery-related, but what if they aren’t? The timeframe is too short to replace the battery, recalibrate the ECU, and pull the codes again. I decided to ask for battery replacement and $1000 off the car. I was convinced the price was too high, and now I had a solid reason. Bob, who had repeatedly told me that he stood to make nothing off this car, stated that they wouldn’t give that much. Maybe the battery, but a grand on top was too much. “I will buy the car if you’ll do it,” I stated. The answer: No deal. End of the adventure.
I didn’t bother to call on the 2009. That could wait until the following week. The pressure that had built all week evaporated in an instant. I was disappointed, but I felt confident I had done the right thing. I’m pretty sure they were banking on using my desire for the car and my commitment to the process against me. I’m still not sorry I expressed how much I wanted the car. A month of research had tempered my enthusiasm. They just didn’t know that. Then the phone rang. I felt the anger start to build the moment I saw the number of the dealership come up on the caller ID. Didn’t they know that this was over, at least as far as I was concerned? Three rings went by, and I almost let it go to voice mail. Almost.
“It’s Bob. You’re not going to believe this (correct, I won’t), but the CFO and the sales manager are arguing over your offer.”
“I don’t have an offer. You turned it down. I have no interest in playing games.”
“No games. We’ll do 31k and the new battery if the offer is still valid.” You’d think I would have been happy to hear this, but I wasn’t. I said almost nothing. I didn’t trust myself to speak.
“Let me get back to you Bob. I’m not pleased.” This is where my friends and my wife were crucial. It took a while for me to calm down. Honestly, I’m not completely sure why I was so angry, but I finally realized that I was getting what I wanted. I accepted. The breakneck pace then accelerated. I raced home, making calls the whole way to address the logistics of driving to St. Louis on short notice (which I had canceled when my initial offer was refused). Then to the airport to pick up the rental car. Back to the house to pick up the wife and an overnight bag, and we were off.
As if to drive home the logic of buying German, the Malibu LTZ we rented would not let us take the key out of the ignition once inserted. Calls to the rental car company and a Chevy dealership service department were not helpful. Of course, this problem is probably an isolated incident. I have no idea if this is a common problem (Google didn’t think so), but it made me feel better about my decision.
When I finally arrived at the dealership, the car was right out front. I looked right past it because I thought it couldn’t look that good. Then I drove it. Wow! How could this car have sat for five months? I hope there is not an unhappy answer to that question somewhere in my future. The car is now mine. I own a 2008 BMW 535xi. Still can’t believe it!
Did my friend make the right decision, or was he blinded by the allure of the Roundel? You could get out your slide rule and make the argument either way, but let’s face it: new cars aren’t dishwashers. Emotion plays a role. No matter what happens in the years to come, my friend will walk out to the driveway knowing that he has the car he wants. That’s worth a little bit of money, hassle, and time, if you ask me.