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      01-14-2022, 09:06 PM   #1
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I think we knew this was coming. Will be interesting to see how this plays out. BMW has done a lot of irritating things with the warranties over the years. For the greater good I hope this guy wins.

Wrong forum I think. Apologies
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      01-15-2022, 06:50 AM   #2
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This is interesting because in this market lots of lessees are looking to have Carvana and Driveway etc buy out their leases and BMW has cracked down on this. But in this suit the Toyota dealer was buying out the lease and giving equity to the buyer. I thought a lease was just a rental from a bank and you had no ownership interests in the car. So I don’t know how successful this suit would be. Buyer should have bought out the X3 for 27k then it’s his car to sell. Interesting follow though
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      01-15-2022, 07:43 AM   #3
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It was my understanding from the one lease I have done that if the residual value and current market value differ the dealership can sometimes cut you a check for the difference. It's not very often that the overbearing laws of California actually work for someone, lol.
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      01-15-2022, 07:51 AM   #4
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I think that was the good old days. When the residual and market value didn’t differ by ten thousand dollars. Manufacturers want these cars back to sell at an obscene mark up so they changed the rules
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      01-15-2022, 07:56 AM   #5
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I think that is true. Luckily the lease is due up next month for my wife's 18' Durango. Residual value listed as $23k, right now worth about $35k. Used cars are so insane right now.
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      01-15-2022, 08:26 AM   #6
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Originally Posted by STi from DSM View Post
I think that is true. Luckily the lease is due up next month for my wife's 18' Durango. Residual value listed as $23k, right now worth about $35k. Used cars are so insane right now.
My friend was in same situation with his wifeís Durango. They bought out the lease and sold car at a ridiculous profit. Moral of the story is if your residual is reasonable and you plan on taking advantage of the market, buy out your lease. That way itís your car to sell
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      01-15-2022, 10:04 AM   #7
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Interesting case that will likely get deep into contractual law. From BMW's perspective I see the angle - they desperately need those cars off lease for their inventory right now.
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      01-15-2022, 10:46 AM   #8
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Good luck to the customer suing the legal team at BMW, likely going to spend way more money on legal costs than would recover on their lease, so not sure I see the point...
Much better to buy out the lease and sell it on your own.

BMW is not the only manufacturer doing this by the way, most are including Honda, Toyota and GM, so no real legal advantage to chase after BMW...
https://cars.usnews.com/cars-trucks/...s-restrictions

Crazy times.
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      01-15-2022, 11:53 AM   #9
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I did this recently. He can just sell his car to a BMW dealership, problem solved. Yes, BMWFS has instituted a new rule and will no longer accept third party payoffs from non-BMW dealerships. AutoNation dealerships can still pay off the car because they own some BMW dealerships. As for those that are saying he should buy it out himself and then sell it: he would incur sales tax which might wipe out some or all of the potential profit. California allows sales tax to be waived if you sell the car within 10 days, but you first need to wait to receive the title, and then apply for a fresh title with BMWFS removed, and wait about a month for it to arrive in the mail.
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      01-15-2022, 11:58 AM   #10
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Quote:
Originally Posted by allinon72 View Post
Interesting case that will likely get deep into contractual law. From BMW's perspective I see the angle - they desperately need those cars off lease for their inventory right now.
Probably a losing battle for the customer. However I feel BMW is trying to have their cake and eat it too here. Dealers are openly trying to take advantage of customers due to short supply with bloated MFs and mark ups. I know BMWFS and dealers are different entities but it's not a good look for BMW.
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      01-15-2022, 11:58 AM   #11
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Originally Posted by Brendan///M View Post
I did this recently. He can just sell his car to a BMW dealership, problem solved. Yes, BMWFS has instituted a new rule and will no longer accept third party payoffs from non-BMW dealerships. AutoNation dealerships can still pay off the car because they own some BMW dealerships. As for those that are saying he should buy it out himself and then sell it: he would incur sales tax which might wipe out some or all of the potential profit. California allows sales tax to be waived if you sell the car within 10 days, but you first need to wait to receive the title, and then apply for a fresh title with BMWFS removed, and wait about a month for it to arrive in the mail.
Yes, he can sell it to a BMW affiliated dealer network, but the issue is value. In this case the Toyota dealership is offering max value.
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      01-15-2022, 12:35 PM   #12
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Originally Posted by allinon72 View Post
Yes, he can sell it to a BMW affiliated dealer network, but the issue is value. In this case the Toyota dealership is offering max value.
Theoretically I can goto a BMW dealer with my lease expiring and negotiate a profit on my leased vehicle if the market value is higher than my residual? Even though itís not my car - itís BMWFS? Never tried that angle. I just did a lease return. All my cars have been pristine and under miles at lease turn in. Didnít know this was an option. Of course these are strange times and who knows what values will be in 5 years and what sorcery manufacturers will do with residuals in lease deals down the road
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      01-15-2022, 12:48 PM   #13
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Quote:
Originally Posted by Gsavarese View Post
Quote:
Originally Posted by allinon72 View Post
Yes, he can sell it to a BMW affiliated dealer network, but the issue is value. In this case the Toyota dealership is offering max value.
Theoretically I can goto a BMW dealer with my lease expiring and negotiate a profit on my leased vehicle if the market value is higher than my residual? Even though it’s not my car - it’s BMWFS? Never tried that angle. I just did a lease return. All my cars have been pristine and under miles at lease turn in. Didn’t know this was an option. Of course these are strange times and who knows what values will be in 5 years and what sorcery manufacturers will do with residuals in lease deals down the road
That's correct. A local bmw dealership offered me thousands over my payoff amount despite about 20 months left on my lease.
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      01-15-2022, 01:54 PM   #14
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Quote:
Originally Posted by Gsavarese View Post
Quote:
Originally Posted by allinon72 View Post
Yes, he can sell it to a BMW affiliated dealer network, but the issue is value. In this case the Toyota dealership is offering max value.
Theoretically I can goto a BMW dealer with my lease expiring and negotiate a profit on my leased vehicle if the market value is higher than my residual? Even though it’s not my car - it’s BMWFS? Never tried that angle. I just did a lease return. All my cars have been pristine and under miles at lease turn in. Didn’t know this was an option. Of course these are strange times and who knows what values will be in 5 years and what sorcery manufacturers will do with residuals in lease deals down the road
I did this 3 weeks ago with my 2018 Audi SQ5. Was under miles, but car had minor accident damage that had been repaired (still showed up on the Carfax though) and a cracked windshield. Lease was up end of January, but had already received my '22 X3MC so didn't need the Audi anymore.

I thought about buying it and then reselling it (no sales tax issues in Oregon), but the Audi dealership made me a great offer that avoided all the purchasing and waiting for title hassle.

If I would have done a straight lease return I might have had to pay the lease disposition fee (audi sometimes waives this) and they might have charged me for the windshield. Instead I walked out of the dealership with the lease closed out at no cost and a check made out to me for $4900.
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      01-17-2022, 02:22 AM   #15
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This is an interesting topic here as I may have an early lease return as well.
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      01-17-2022, 07:22 AM   #16
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Here is my example from last month, knew that BMW had started locking down leases and that companies like carmax could not buy directly but my buyout was pretty low and no way I was just giving it back. I priced with carmax and carvana, both were close to 50k and my buyout was 41k and dealer was selling similar models for 60+. Max profit would be to just buy it and either private sale or sell to carmax, carvana but you have to pay it off, wait for the title to show up, in my state I would have also had to pay 2500 in tax, so now I am out a bunch of time dealing with it and have to give the state 2500 for nothing, so went down the negotiating with the dealer path. Of course they know it is a pain in the ass and that you have to pay tax so no way they will give what carmax would but got them close. So ended up being within 500 bucks of the carmax offer after your deduct the 2500 from their offer that I would need to pay in tax, so was the easiest route.

I watched it and dealer listed for 62000 and probably got most of that. Also saved disposition fee and car did need brakes and tires (M sport brakes) but it saved me any lease fees they may have got me for also, but dealer maybe had to put 3k into the car to sell it. so they made an easy 12k I would guess on it.

But long story short, for anyone returning a lease when you get your new car, if you just give it back and especially if they charge you any wear and tear on your lease return, you are leaving a lot of money on the table. Trade it in instead and let dealer buy it out for market value as it will at least make you a little money and it is better for you and the dealer as even though the lease may go back to that dealer, they don't just get to keep it for your your lease return cost, BMWFS will dealer auction it to the highest bidder and they would pay a bunch more for the car buying it from the auction than if you trade it.
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      01-17-2022, 08:55 AM   #17
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Originally Posted by roadkillrob View Post
Here is my example from last month, knew that BMW had started locking down leases and that companies like carmax could not buy directly but my buyout was pretty low and no way I was just giving it back. I priced with carmax and carvana, both were close to 50k and my buyout was 41k and dealer was selling similar models for 60+. Max profit would be to just buy it and either private sale or sell to carmax, carvana but you have to pay it off, wait for the title to show up, in my state I would have also had to pay 2500 in tax, so now I am out a bunch of time dealing with it and have to give the state 2500 for nothing, so went down the negotiating with the dealer path. Of course they know it is a pain in the ass and that you have to pay tax so no way they will give what carmax would but got them close. So ended up being within 500 bucks of the carmax offer after your deduct the 2500 from their offer that I would need to pay in tax, so was the easiest route.

I watched it and dealer listed for 62000 and probably got most of that. Also saved disposition fee and car did need brakes and tires (M sport brakes) but it saved me any lease fees they may have got me for also, but dealer maybe had to put 3k into the car to sell it. so they made an easy 12k I would guess on it.

But long story short, for anyone returning a lease when you get your new car, if you just give it back and especially if they charge you any wear and tear on your lease return, you are leaving a lot of money on the table. Trade it in instead and let dealer buy it out for market value as it will at least make you a little money and it is better for you and the dealer as even though the lease may go back to that dealer, they don't just get to keep it for your your lease return cost, BMWFS will dealer auction it to the highest bidder and they would pay a bunch more for the car buying it from the auction than if you trade it.
Just to clarify - this all assumes youíre getting another BMW or turning in your leased BMW to a BMW dealer. Thatís the whole point of the court case that started this thread - BMW wonít pay a Toyota dealer for one of its off lease cars
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      01-17-2022, 09:58 AM   #18
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Isn't leasing basically just renting the car? I'm a little confused why someone would take BMWFS to court over this?
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      01-17-2022, 10:11 AM   #19
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Quote:
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Isn't leasing basically just renting the car? I'm a little confused why someone would take BMWFS to court over this?
Because you're free to purchase the vehicle at any point during the lease. As mentioned above, some people are confused by this as they don't realize that only you or a first party dealer can make that purchase under most manufacturer's lease agreements . Normally, this wouldn't matter but as leases come up that were written prior to the current market the residuals are drastically higher than they should be.

So you have an individual like in the article that wants to trade in a lease but not purchase it themselves. Maybe they don't have the money for the full purchase or they don't want to get hit with the remaining tax. Now they're mad that they're getting short changed and it's not benefiting them.
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      01-17-2022, 11:11 AM   #20
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Quote:
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Quote:
Originally Posted by Bestle View Post
Isn't leasing basically just renting the car? I'm a little confused why someone would take BMWFS to court over this?
Because you're free to purchase the vehicle at any point during the lease. As mentioned above, some people are confused by this as they don't realize that only you or a first party dealer can make that purchase under most manufacturer's lease agreements . Normally, this wouldn't matter but as leases come up that were written prior to the current market the residuals are drastically higher than they should be.

So you have an individual like in the article that wants to trade in a lease but not purchase it themselves. Maybe they don't have the money for the full purchase or they don't want to get hit with the remaining tax. Now they're mad that they're getting short changed and it's not benefiting them.
On the contrary, I feel as if BMW is changing the rules mid game to take advantage of unprecedented times. While they may have the contractual right, this doesn't go a long way to building customer loyalty. They can have the "if you don't like it, then don't lease attitude" and the market is definitely in their favor. But what goes around, comes around. This combined with the way dealers are opening bloating MFs and marking up cars just reeks of greed to me. But you could call it capitalism. Though when they are flooded with cars that aren't moving, I won't feed Bad
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      01-17-2022, 11:48 AM   #21
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On the contrary, I feel as if BMW is changing the rules mid game to take advantage of unprecedented times.
I guess I disagree. You're renting a vehicle from them that YOU can also chose to purchase. Now you want to turn around and be the 3rd party in a transaction to make a profit while completely isolating yourself from the costs of doing so.

So basically, you know that technically only you or a first party dealer can purchase the lease. It doesn't matter 99.99% of the time because BMW lease residuals are basically too optimistic anyway. Now, in a completely odd scenario the quoted residuals are actually way too low. So you want to take advantage of this but are upset because you have to actually follow the contract(which didn't matter before) and use your own funds to first secure the vehicle. So you call foul on BMW because they're stopping you from getting what's yours.

Lets say we had a reverse scenario where the used car market somehow crashed hard and the quoted residuals where way too good and now are 10 points too high. I wonder if these same people would be OK with BMW asking for compensation for the huge losses they'd face on every turned in car? No, they wouldn't and they would say sucks to be you and here's the keys.

Feels a bit like the customer is the one that's being greedy right now, not BMW. They're giving you an option to get the car but you don't like it.


*Note - The "you" above isn't actually you - it's just a hypothetical person
*Note 2 - I'm ignoring selling to a first party dealer and talking directly about the type of transaction in the OP.
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      01-17-2022, 01:56 PM   #22
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Right I think I understand it now then and I agree with your point of view.

If the lease contract stipulates that the leasee has the option to buy and BMWFS is still accepting buy outs from the leasee directly, then I don't see the issue here at all.

If you wanted complete control over your car, you should buy it.
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