Driving a Bargain Special Programs Help Diplomats Save on World-Class Cars by Alan B. Nichols There are cars, and then there are luxury carsóand diplomats know the difference. While a diplomatic parent might be driving a Ford station wagon to take the children to soccer practice, chances are the spouse is driving to the embassy in a Mercedes-Benz, BMW or other world-class European-made luxury car. Washington-area car dealers specializing in Mercedes-Benz, Volvo, BMW and other models are rolling out the red carpet for diplomats interested in taking a look at their luxurious product lines, from large four-door sedans to sportier models. Many of these brand-name models are available to diplomats under a special diplomatic and tourist purchase program that can save foreign nationals working in the United States a large amount of money. In the greater Washington area, one of the dealerships offering Mercedes-Benz is American Service Center (ASC). First opened in 1937 as a Studebaker dealership, ASC switched to selling Mercedes-Benz in 1957. In 2002, the company added a second dealership, Mercedes-Benz of Alexandria. According to company Chairman Morton J. "Morty" Zetlin, Mercedes-Benz of Europe offers a special diplomatic discount program for those working abroad. And for employees of foreign embassies in Washington and others with diplomatic status, the savings on the purchase of a new Mercedes-Benz in the United States can be dramatic. Under the Mercedes program, the buyer in effect purchases the vehicle directly from the manufacturer, with the local dealer acting as broker in the transaction. Cars purchased in the United States must conform to U.S. specifications for such features as make and tint of glass, headlamp candlepower, power steering and brakes, steering wheel on the left-hand side and air conditioning. Zetlin gave two examples of the savings available under the special purchase program. Diplomats buying from American Service Center can purchase a Mercedes E320 four-door sedanówhose manufacturerís suggested retail price (MSRP) including freight is $48,170ófor $42,705, or a savings of nearly $5,500. The MSRP with freight of a C240 four-door sedan is $32,280, which a diplomat can buy for $28,404. "As you can see, the savings are significant," said Zetlin, who noted that extras, however, are priced at MSRP value and that some models, such as the SL500, CLK Cabriolet and AMG models, are not included in the discount. "Over the years, we have sold to many diplomats including ambassadors," Zetlin said. "We regularly call on the embassies, the development banks and the IMF [International Monetary Fund], providing them with up-to-date information on our inventory. Some of our sales staff has been with the company for 20 to 30 years. "We get a lot of repeat business," Zetlin added. "The wife of one Foreign Service officer was an opera singer back home. We are now selling cars to her children too." Zetlin also mentioned an Egyptian diplomat who buys a new car from his company every year. ASC Mercedes representative Chuck Albert recalled the son of a Middle Eastern royal family who bought a new $138,000 Mercedes from ASC each of the four years he attended college in Boston. Another repeat customer, Albert said, is a diplomat who buys a new S500 model every December. He has his security team completely strip down the car before he will drive it off the lot, said Albert. The ASC salesman added that since 9/11, Customs and U.S. State Department documentation requirements for diplomatic buyers have become very strict. Albert also pointed out that there are some 17,000 people in the greater Washington area who carry A-1, A-2, G1-4 and NATO-4 visas who qualify for the special diplomatic program, many of whom are not aware that it can save them a significant amount of money. Financing for diplomats, however, can be more difficult than with American citizens, Albert explained. Without a credit history, foreign buyers may have to pay in cash or wait for their money at home to come through a U.S. bank. Albert said he attended protocol school through the State Department to avoid making mistakes that could arise from cultural differences and misunderstandings. "I want to avoid even inadvertently offending any of my customers," he said, noting that he occasionally receives gifts from buyers as tokens of their appreciation. The Potomac Exchange was founded a few years ago by a German national to educate foreign nationals on the American way of business. Private luncheons are held in Washingtonís upscale hotels, where diplomats and other foreign dignitaries discuss their needs and interests with representatives of different U.S. industries. "The discussions are usually very open and frank," said Albert, who has attended many of these functions. Dana Martens of Martens Cars of Washington in Northwest Washington markets Volvos and Volkswagens. Volvo has a special tourist and diplomatic program, whereas Volkswagen does not. The family company began in 1904 when it delivered coal and ice to customers by mule. Today Martens Cars is one of the leading Volvo and Volkswagen dealerships in the area. Volvoís special program for diplomats is a direct sale program with a manufacturer in Europe whereby the American dealer is essentially an agent or broker for the manufacturer. Under the program, a diplomat can receive a discount of 10 percent. According to Martens, her company sold 106 Volvos under the special program in 2003. The most popular models among these sales were the Volvo XC70, a four-wheel-drive station wagon, and the XC90, Volvoís SUV equivalent, which has been out for slightly more than a year. Joern Esser is a sales representative at Passport BMW in Marlow Heights, Md. The most popular models for diplomats coming to his dealership, he said, include the BMW 3 series (sedans, coupes and convertibles) and the X5 or sports activity vehicle (SAV), which Esser said drives like a car not a truck. The SAVs come in either 17- or 19-inch wheel rims, and BMW is about to come out with an X5 4.8is, which will have 20-inch rims and a 4.8-liter fuel-injected engine. According to Esser, most of his diplomatic customers are German and employees at the International Monetary Fund (IMF). BMW has two diplomatic programs: BMW of North America, which sells cars directly from the dealer stock, and the BMW AG program, which sells from the manufacturerís stock. "Many of the 10,000 employees of the IMF and World Bank are here temporarily," said Esser. "They purchase the car here and take it back to their home countries when their tour in the States is up." Most foreign nations will allow the import of a private car tax- and duty-free if the car has been owned and registered abroad for a stipulated amount of time, Esser said, and "this can amount to tremendous savings." Last year more than 280 vehicles nationwide were sold through BMWís diplomatic sales program, which offers a 5 percent discount to qualified buyers. Esser added that under the program, most customers will buy a car with American specs. If they choose to purchase a car with spec standards of their home countries, however, they need to obtain special permits from the State Department. Cars with German specs bought in the United States, for example, cannot be resold here. Roger Wildermuth of Rockville Porsche Audi in Rockville, Md., said that under his dealershipís diplomatic discount program, a Porsche can be purchased at 5 percent under dealer invoice. The Porsche Boxster, a two-door coupe, is the most popular among diplomats, retailing for around $50,000. "We suggest diplomats lease the vehicle if they are going to be in the States for just a short time," Wildermuth said. "They get guaranteed value at the end of use, and there is no worry about having to resell the car." As with the other foreign brands, Porsche marketers stress the carís high performance over gimmicks. Standard equipment on a Porsche with U.S. specs includes air conditioning and heated seats, and global positioning system navigation is optional on most models. For foreign nationals in the United States who want extra value and savings, Mike Haji, president and founder of Select Auto Imports, suggests any one of his luxury used Mercedes, BMWs, Jaguars, Porsches and other European models in stock. Every vehicle in Hajiís extensive inventory is two years old or newer, and each has passed an exacting certification process that looks at every part of the car, from the chassis to the power train to the entire interior. Also, each vehicle comes with its original equipment. The cars are bought at manufacturersí auctions or are purchased from other dealers who acquire the vehicles in trades. For instance, a Mercedes-Benz dealer who has no use for a Porsche, which he receiv ed in a trade from a new Mercedes buyer, will sell that vehicle to dealers such as Haji. "Many diplomats who first come to the States donít realize they can get tremendous value in a pre-owned car," said Haji. "On some of our models, a buyer can save as much as $8,000 to $10,000, and the vehicle drives virtually like a new car. Buyers who come to us feel comfortable with our business because the most important quality of our business is our integrity." Alan B. Nichols is a freelance writer for The Washington Diplomat.