Quote:
Originally Posted by GrussGott
I'd be surprised if BMWAG Finance thinks Individual paint is a big profit center.
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I agree, I'm sure it doesn't even raise a blip on their radar overall. However, this touches on the reason why the Individual paint is justified by the lessees of these cars. BMW's overall lease uptake rate is in the low 60% range (only one car maker leases a larger percentage, Infiniti, and only about 1% higher), but as the MSRP of a BMW increases the leased % goes up accordingly. In some markets, it even approaches 90% of "sales."
Hence the modern day lessee walking into a dealership doesn't pay any attention to the present value cost of Individual paint but is enticed by looking at the monthly payment and weighing whether it is "worth it" to them to pay the relatively minor looking extra each month. Every option is weighed by BMW as to whether it should be offered individually or forced to be part of a "package" all based on the expected uptake rate of lessee's, not purchasers of the car.
The emotions surrounding "monthly payments" are exploited to the maximum possible in the modern day dealership. With plenty of sheep just begging to be fleeced without even realizing it, BMW has designed the system to enable maximum exploitation...since of course that is what they are rewarded for doing over the short term.
When you look at the overall system as a function of leasing and how much product can be moved into lessee's hands per month, and forget looking at present value cost of each car/option, only then, through the eyes of pure financialization, can the modern day BMWNA process come to light.