Quote:
Originally Posted by mtrack
When this thread started, I knew there would be those that would put a positive spin on BMW's reduction of the included CPO warranty. Stating things like, and I'm paraphrasing, "The dealer has to pay for those CPO warranties anyway, so this will lower prices of CPO vehicles" and " this just provides more options, you can always bargain for extended warranties" You are entitled to your opinions however, I would just say to counter that line of thought, make no mistake about it value has been removed from the buyer side of the equation at the start of the negotiation process. There is no guarantee that CPO prices will be reduced, in fact I think dealers will see this as an opportunity to increase their profit margin and not lower CPO vehicle prices at all. Anyone in sales or part of any price based negotiation knows that as the seller you want to start with the highest price possible. As a buyer, the converse is true, you want to start with the lowest selling price possible. By reducing the term of the CPO warranty, BMW has decreased the value of what it's selling putting the buyer in a weaker position at the beginning of the negotiation. In my opinion, there is no way to see this as a net positive. Also, arguing that other brands are not as good as BMWs so, why would you jump ship, is not really the issue. It's about the loss of value in purchasing a BMW. BMW corporate has made a business decision to remove value from the buyer side of the sales equation. They did this to increase the profit they make on their cars. If this strategy is successful, the buyer will ultimately pay more for their cars or have less warranty coverage.
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Well, following your line of thinking, ultimately if the strategy you outlined is effective and the buyers pay more, then it was worth more to the buyers.
I never understand why people think car companies (particularly premium luxury brands) are in business to maximize value or provide great deals to customers. If they have a great product at a price people find acceptable, it works. If they don't then it fails. Simple. I think most of the overreactions in this thread are comical.