BMW cracks down on broker discounts

Friday, November 30, 2007

Huge online BMW discounts could be over
BMW remind its dealers of obligations
Dealers face having franchise terminated

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Bargain BMWs could be harder to find from next year as the German brand clamps down on dealers selling through online brokers.

This year, we’ve seen prices slashed by up to 18% on new 3 and 5 Series at online brokers.

However, now BMW is reminding dealers of their obligations, which include not selling cars through online brokers.

Our broker sources have been told supply will soon dry up, and that dealers who continue to sell through brokers could have their franchises terminated.

A spokesperson from BMW said: 'It could get to a stage where the only person who makes any money is the broker – not the car dealer. This clause in the dealer’s contract is their to protect the dealer.' Big discounts could also adversely affect the premium brand's residual values.

Whatever the reason, it should mean bargain-hunters will end up paying more for their BMWs. That might seem unfair, but under current the current 'Block Exemption' Regulation – which governs the sales and servicing of cars across Europe – BMW is perfectly entitled to take such action.

What Car? mystery shoppers will carry on haggling with BMW dealers across the country to find out if our Target Price will be affected, as it's possible dealers being prevented from selling their cars through online brokers will seek to recoup broker sales by offering bigger discounts to customers buying direct.