[knight427]

I am curious about how "incentives" work for the dealer. For example, I have two dealers in my area. Dealer A is offering "Dealer Cost" on some of their X1 models, which is a $3,000 discount from MSRP, but other X1 models only have a $1,000 discount. Meanwhile, Dealer B is offering "Sale Prices" anywhere from $500 off to $5,000 off MSRP of their X1 inventory.

Are these just sale prices, or is the dealer being reimbursed for these discounts from BMW? From reading posts here, it seams like sometimes these incentives can be applied after negotiating a price (say $500-$1,000 over invoice, then take off $X from an incentive and end under invoice), but other times they are part of the negotiated price (and you end up over invoice).

I'm trying to figure out how to negotiate with these incentives. Ideally I would find the invoice price, offer $500-$700 over that as the price before applying incentives. This seems reasonable if the dealer is getting that incentive from BMW. But if the incentive is coming from the dealer, I'd expect that you couldn't use it to go under invoice. Is this about right, or am I missing something?

EDIT: Also, I just found out that Dealer A offers a buy down on the money factor rate by placing up t 7 security deposits (each deposit of $450 reduced the money factor). Does anyone know if this is buying down BMW's rate, or the dealers markup rate?