Originally Posted by MegaMatt3
Alright, so I think I'm beginning to get it. Now you say that dealers are only allocated a certain number of units, and they may or may not be allowed to sell above their allocation. Does that mean, hypothetically, one could walk into a dealer and be turned down because the dealer has reached their limit with allocations and isn't being permitted to go above? That seems next to impossible...
And to clarify, you said that if they're not selling out of their allocations, they're less likely to sell for a small profit since they'll be using up one of their spots. I'm not sure I'm following this part. If a dealer is selling outside of allocations, why is that using up a spot?
It is not impossible. It is very possible. That's why nobody will sell you a car like that at invoice or near invoice. For example, with the M235i, dealers are currently getting only a few a month max. That's why they wouldn't sell it at invoice since they wouldn't have more than those they can sell. I'm talking about special orders. They can do dealer trades and get them from other dealers all they want. But you wouldn't get that at the rock bottom pricing.
I'm confused with the last paragraph so let me try to clarify. If a car is not coming from their allocation, some dealers will sell for a small profit since it doesn't affect their guaranteed spots. If it is coming from their allocation, unless the car is not selling very well, you'll be hard pressed to find someone to sell at only a tiny profit.
Think of it this way. Let's say BMW has planned to produce 1000 M235i's in the first production run to see what the demand is. If one dealer sells 1000 of them in the first month because they are giving crazy deals, then everyone is in trouble because BMW can't meet the demand and other dealers are left with nothing.