# ED Pricing



## philcollison (Jul 15, 2009)

Here is why Audi ED is not so popular: 
When I bought my A4 Avant back in 2006, there was no "financial crisis" and I was still able to have my car factory ordered for $1000 over invoice. These days, I think you can easily get a non-ED car at invoice. Invoice is 7% below MSRP, but the standard discount is 5% on most cars, which puts you 2% above invoice ($800 on a $40K car. Dealer's invoice is 3% below normal invoice (10% below MSRP), so, assuming the dealer will sell at invoice on an ED car, you basically have the same deal on an ED car that you would on a normal purchase. I am pretty sure that the same delivery charges apply (i.e. no deferral on the ED vehicle). 
BMW's price to the dealer is 15.5% below MSRP, not 10% - $2000 cheaper on an ED car. It is not that BMW is cheaper than Audi so you should buy a BMW, it is that the ED option is 5% more attractive as a delivery option so if you are planning on buying the BMW, the ED option is pretty easy to justify. With Audi, there is virtually no discount over the standard delivery option, so unless you (a) plan to be in Germany anyway (b) are really into a free hotel room and a plant tour and (c) think this would be a fun alternative to a rental car, then there are arguably more cons than pros. 
Having said that, I still think that you should get the car you want regardless of price, but once you have settled on the car you want, you should make the smartest deal possible.


----------



## SAAdFlyer (Jun 15, 2009)

*Re: ED Pricing (philcollison)*

I think you are missing something here. For Audi ED, you negotiate the sale price with the dealer. I did this last month, and was able to negotiate a sale price for a 2010 Q5 at a few hundred over invoice. On top of this Audi will give a discount of 5% of MSRP. Together, this works out to double digits over MSRP and significantly below invoice - a much better deal than what I could do without ED.


----------



## philcollison (Jul 15, 2009)

*Re: ED Pricing (SAAdFlyer)*

Thanks for the feedback SF. You've nailed it on the head. 5% sounds like a decent cut if everyone's paying MSRP, but these days, everyone is paying a few hundred dollars above invoice less any factory incentives (currently $1500 on the A4 Avant if I am not mistaken). People expect ED to be less - 5% less than a US-negotiated deal sounds about right.
However, my understanding of the Audi ED was that the dealer's buy price was 3% below invoice, which meant that if they keep the 3% for their processing fee, the ED buy price would be invoice, which is about on par with what folks are paying for standard-allocation cars these days (before incentives).
If you are suggesting that you can go in and negotiate a good deal on a factory-order car for delivery to the dealership and then switch gears to ED and get a further 5% discount, then this would be a good arrangement and closer to the BMW price model, but I am pretty sure this is NOT how it works.


----------



## Lucien (Jan 23, 2008)

*Re: ED Pricing (philcollison)*

Looking at BMW program then it does sound bit better:
- 2 flight tickets free (I've heard earlier they would pay only 1 ticket but according to their site 'companion flies free')
- about 7% discount from MSRP.
If you're undecided between the 2 I can see this is more attractive. But price is negotiable so it's difficult to compare which is better. 
Seems to me that it would be very difficult to get price down to invoice and then get in addition the 5% discount. Unless they have a very hard time to sell this car. Well you can always try...
PS even if you wouldn't get a better deal with euro delivery, you still save in addition the rental car which in Europe would definitely be more than $1000 for 2 weeks for an Audi. Provided you wanted to go in vacation which by itself will cost you...

_Modified by Lucien at 6:04 PM 7/22/2009_


_Modified by Lucien at 6:05 PM 7/22/2009_


----------



## SAAdFlyer (Jun 15, 2009)

*Re: ED Pricing (philcollison)*

Hi Phil, I can only speak to the Q5 as I didn't research any other Audis. I don't know if there is any Audi to dealer incentive like the 3% you mention for the A4. This could be possible as the 09 A4s are being cleared out. The Q5 though, has been a different story as it has been in a demand>supply state this year. AFAIK, no Audi to dealer incentives exist. Despite this, people have been able to negotiate deals closer to invoice for standard US delivery.
Switching to ED, if a dealer does an ED sale, s/he will receive a 3% of MSRP commission from Audi for the sale - but only for an ED sale, and AFAIK this is not true for US sales. The buyer receives a 5% of MSRP discount from Audi. The sales price is whatever the buyer negotiates with the dealer. So, the dealer will always make a profit of 3% of MSRP even if you buy at invoice. If you paid over invoice, it is a little more. Hope this makes sense


----------



## philcollison (Jul 15, 2009)

*Re: ED Pricing (SAAdFlyer)*

I am an Audi guy and want to do my next Audi via ED, but the deal NEEDS to be more attractive by a grand or two over standard US delivery to be competitive with other programs, benchmarked by BMW. 1 night hotel and "free" rental car does not cut it. 
The BMW ED price (to the dealer) is 15% below MSRP (about 7% below invoice). The deal needs to carry $1000+ for the US dealer (about 3% depending), making the deal about $1800 under invoice on a $40,000 car with $1000 to the dealer. This is EXACTLY the deal I negotiated back in 3/08 on my wife's 328xi Coupe BEFORE the recession hit. 
Audi's deal has a back-door 3% to the dealer (1% on A3?), which should cover the administrative cost, but a comparable ED deal should sell 3-4% BELOW invoice to be on par. 
SF, I think you are correct that a reasonable person could negotiate an at-invoice deal with a reasonable dealer any time on a normal car. Since these are all factory build-to-order, I'm not sure if clearance or supply / demand considerations apply. However, you can buy a car at invoice (or a few hundred over) on a standard US-deliver car these days, so where's the incentive?


----------



## philcollison (Jul 15, 2009)

*Re: ED Pricing (SAAdFlyer)*

Lucien, the "free" ticket deal with the BMW ED package (through Lufthansa only) is no big deal. I used it and save a couple hundred bucks, but you pay full price for one Q-lass ticket (about $1600 in my case) and taxes on the second (about $200). Cheap tickets would have been $2100 total for the pair, so I saved $300. If this was during the winter, when cheap tickets are cheaper, there would have been no real discount.


----------



## Lucien (Jan 23, 2008)

*Re: ED Pricing (philcollison)*

Thanks for the info! Seems they mislead me with this sentence:
"Fly Lufthansa round-trip from the U.S. to Munich, and your companion flies free."
It sounds like 2 free tickets but looking at fine print:
"Companion must travel on the same flight itinerary as the full fare-paying passenger."
Also it says indeed excl. taxes. Plus pretty sure you get stopovers from most locations and currently I could get a direct flight ticket in shoulder season for about $700. So no big deal indeed.
Then difference is only 2% extra discount but I'm sure you can negotiate more than that with Audi.
Looking at Edmunds they list these incentives for 2009 A4:
Consumer: $1500 for existing Audi owners (2003 or newer model)
Consumer: Financing : 1.9% - 2.9%
Manufacturer to dealer: $2000 A4, $2500 A4 Avant (marketing support)
Then according to Edmunds the TMV price is $1000 below invoice for a 2009 A4. So you could try that plus the 5%. I'm sure they will give you a hard time but doesn't hurt to try.
I'd wish you could get that deal for the A5 which still sells close to MSRP.


_Modified by Lucien at 7:53 AM 7/23/2009_


----------



## k2allroad (Aug 7, 2005)

*Re: ED Pricing (Lucien)*

You will be able to get a better deal on a car if you just buy one off the lot from a dealer. By experiencing Audi ED, you get to experience your new car in a way you will never be able to here in the States. 
We had an absolute wonderful experience doing ED with our Audi, and when I am ready for a new car, we will definetely be picking up our Audi in Ingolstadt again.
http://****************.com/smile/emthup.gif


----------

