What is European Delivery?
Information gathered from Bimmerfest's ED Wiki.
European Delivery (ED) is a program offered by BMW that allows you to pick up your car in Munich, Germany and enjoy driving it throughout Europe while on vacation or a business trip (BMW European Delivery Website). One of the biggest advantages to doing European Delivery is that there is a significant cost savings to purchasing in the United States that allows you to pay for your trip and potentially save even more.
BMW created the European Delivery program to promote sales of its cars in the 1960s. Although all of BMW's reasons are proprietary corporate matters, one of the principal benefits it brings the company is customer loyalty. Many people who take delivery of a BMW in Europe won´t consider the purchase of a car in any other way.
Many people ask why cars have a lower price when purchased through ED. The reason is that BMW and BMWNA (BMW North America) sell cars through ED outside of the usual dealer incentive programs offered by BMWNA to its dealers. US BMW dealers receive incentive payments from BMW NA based on customer satisfaction, or "CSI" scores. Those scores, in conjunction with the number of cars sold, result in incentive payments. BMWs sold through the ED program do not increase a dealer's unit sales and are not subject to the CSI program. Because BMW NA does not pay out this incentive money, they are able to pass along those savings to you in the form of a reduced price on an ED car. The amount of the discount is approximately equal to the potential CSI money a dealer would receive on the sale of the same car through US delivery.
The savings are not a result of different taxes or duties, as many people speculate. The duty on an imported car, whether new or used, is 2.5% of the declared value. In other words, duty makes up about $1000-$1500 of the price a 3-series BMW. Any reduction in value because it is used would not significantly change the amount of duty. Even a full exemption would not fully account for the price savings of ED.
You also can save money through ED because the price is more negotiable with many dealers. Most BMWs sold through US delivery are sold at or around MSRP because demand is so high. Cars sold through European Delivery do not come out of the dealer's allocation. As a result, the dealer is selling an extra car, rather than one of his allocated cars that he could sell to someone else at MSRP, as is the case with US delivery. Not all dealers realize that ED cars are basically bonus sales. They may refuse to negotiate off of the ED MSRP price, or explain that there are extra costs associated with ED for the dealer. Generally speaking, if your dealer says this, you should look for another dealer.
Many think there is a catch with taxes and/or shipping charges. There is none. The tax you pay is same as the tax you would pay on any car purchased in your state. The shipping price is included in the price as is any BMW purchases in the US. If you look on the sticker of a BMW, there is a fee that says "Destination and Handling". Think of it as buying a car predetermined to come to the US, and all you are doing driving it around Europe before it gets on the boat to come to the states.
Once you have decided that you want to take part in the European Delivery experience, the first step (after researching pricing) is to contact a BMW dealer no less than three months prior to your preferred travel date. The three month period is required as your car will be "made to order" once you chosen all the options for your new BMW. BMW will work to produce your car well within time for your preferred travel dates.
The price that you should pay is invoice price plus the dealer's profit. The invoice price of the car and each of the options can be found here. Dealer profit is usually around 700-1500; this price can be negotiated, the invoice cannot.
I am personaly working with John Wolff from East Bay BMW in Pleasaton. He's given me a great deal and has been there at every step in the process and has made my first purchase for a car one of the easiests things to do.