BimmerFest BMW Forum banner

BMW Selling Laundered Titles

16K views 42 replies 23 participants last post by  timthepug 
#1 ·
Is BMW Selling Bought-Back Lemons as 'Certified Pre-Owned'?

ABC News reported on Oct. 26 that it had an 'exclusive' report on problems with BMW (BAMXY) vehicles that could suddenly lose power due to defective high-pressure fuel pumps (HPFP). That's a story I broke over three months ago on DailyFinance. But no matter, at least the ABC story appears to have sparked BMW into announcing it would recall 151,000 vehicles affected by the HPFP problem and replace their fuel pumps and add new software.

(I hope that solves the problem, but two BMW owners I spoke with for my original reporting on this problem in July had their fuel pumps replaced, and it didn't fix the issue. Both owners eventually sold their vehicles back to the manufacturer. Perhaps BMW has a solution now that will work.)

While BMW has finally admitted the need for a recall (earlier, it had not done so despite numerous customers' complaints about the fuel-pump problem), the ultimate-driving-machine-maker now also faces a related charge: that it's buying back these vehicles from owners and reselling them without disclosing their sordid history. That's according to Robert Silverman, founding partner of law firm Kimmel & Silverman in Ambler, Pa., who's representing many current and former BMW owners.

Silverman alleges that BMW has been buying back these vehicles and reselling them with titles that don't reveal to the new buyers that the cars were bought back and the specific reason why they were bought back. Silverman says that results in a so-called laundered title.

Read full article - :irate:http://www.dailyfinance.com/story/is-bmw-selling-bought-back-lemons-as-certified-pre-owned/19669684/
 
See less See more
#5 ·
What BMWNA is doing is buying the cars back before they qualify for a state's Lemon Law. State laws vary but BMW NA most likely isn't laundering titles.
 
#6 · (Edited)
Personally, I'm not surprised by this report. Unfortunately, this is a far more common practice in the auto industry than is generally thought. I know for a fact (and have the evidence to prove it) that GM re-sold a 1996 GMC Jimmy that they had initially bought back from me under the Pennsylvania Lemon Law. The truck had less than 5,000 miles on it when they bought it back, it sat on the dealer's lot for several months with a "Not For Sale" sign prominently displayed on it, then it was quietly wisked off to the dealer-only auction in DuBois, PA. It was purchased by a second dealer and then re-sold to another hapless customer somewhere out there... :thumbdwn:

On a somewhat related topic, be wary of reporting services like CarFax, etc. They only report what was reported to them. In the case of this particular vehicle, there was no record of a Lemon-Law buyback in their report. When I informed them that their records were inaccurate -- incomplete at best -- they effectively shrugged their shoulders and told me, "Eh, well, we only report what the states/manufacturers report to us." Now that's dedicated and comprehensive investigation of these vehicles, huh? Money for nothing... :thumbdwn:

This is a practice that, while clearly unethical, is unfortunately not illegal... And as long as there are no legal repercussions, all auto manufacturers will continue to do it. :mad:

Always remember the old addage when purchasing used from a dealer (including CPO): "Caveat emptor" ("Let the Buyer Beware").
 
#7 · (Edited)
BMW will not CPO a car that was repurchased under a state lemon law. Once it is repurchased under the lemon law, it is also "branded" in BMW's system which makes it ineligible to be enrolled in the CPO program.

They can CPO a car that has been traded in under the "trade assist" program, which is not the lemon law.

So your next question... do they sneak cars into the "trade assist" program to avoid branding them as lemons? The answer is definitely NO. I know that the first thing they check on every trade assist package (and they tell every dealer to check this before even thinking about doing a trade assist) is that the car does not meet state lemon law requirements. If it does, they will not approve the trade assist and will require the dealer to go through the lemon law.
 
#28 ·
This is consistent with an experience I had last year. I visited a dealership near Baltimore that had a low mileage M3 for sale at a very attractive price. I asked if the car was a CPO. The salesman said no and that they would not CPO it. He then said BMW bought the car back from the original owner because he claimed the adjustable suspension did not work. The salesman claimed that BMW could not find anything wrong with the vehicle.

At the time I didn't think much about it but now I think the car was repurchased as a lemon, which would explain why they would not CPO it.
 
#9 · (Edited)
I did. If there is a link showing lemon law buybacks being resold as CPO, please point it out to me. I've missed it.

There is a legal difference between cars bought back voluntarily by BMWNA and cars bought back under a state lemon law. BMWNA is known to buy back cars under a Trade Assist program before they have had enough repairs to qualify for a Lemon Law buyback. Cars bought back under trade assist were never legal lemons and BMW is not laundering titles on those cars.

Reselling a trade assist car as a CPO is possibly dishonest depending on the issue. I'd recommend asking to see the service history for any used BMW. If there are multiple repairs for a single problem it will be on the service history. At that point the buyer can make an informed choice.
 
#11 ·
§ 56:12-35. Sale, leasing of returned motor vehicle

If a motor vehicle is returned to the manufacturer, or, in the case of an authorized emergency vehicle, to the manu-facturer, co-manufacturer, or post-manufacturing modifier, under the provisions of this act or a similar statute of another state or as the result of a legal action or an informal dispute settlement procedure, it shall not be resold or re-leased in New Jersey unless:
The manufacturer, co-manufacturer, or post-manufacturing modifier provides to the dealer, distributor, or lessor, and the dealer, distributor or lessor provides to the consumer, the following written statement on a separate piece of paper, in 10-point bold-face type: "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER OR OTHER RESPONSIBLE PARTY BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S OR OTHER PARTY'S WARRANTY FOR THE VEHICLE AND THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW;"
The dealer, distributor, or lessor obtains from the consumer a signed receipt certifying, in a conspicuous and understandable manner, that the written statement required under this subsection has been provided. The director shall prescribe the form of the receipt. The dealer, distributor, or lessor may fulfill his obligation to obtain a signed receipt under this paragraph by making such a notation, in a conspicuous and understandable manner, on the vehicle buyer or-der form accompanying the sale or lease of that vehicle; and
The dealer, distributor, or lessor, in accordance with the provisions of section 1 of P.L.1993, c.21 (C.39:10-9.3), notifies the Chief Administrator of the Motor Vehicle Commission of the sale or transfer of ownership of the motor vehicle.
Nothing in this section shall be construed as imposing an obligation on a dealer, distributor, or lessor to determine whether a manufacturer, co-manufacturer, or post-manufacturing modifier is in compliance with the terms of this section, nor shall it be construed as imposing liability on a dealer, distributor, or lessor for the failure of a manufacturer, co-manufacturer, or post-manufacturing modifier to comply with the terms of this section.
Failure to comply with the provisions of this section constitutes an unlawful practice pursuant to section 2 of P.L.1960, c.39 (C.56:8-2).
 
#12 ·
You conspiracy theorists don't get it... Find me a car that was acquired under a state lemon law (any state) and then resold as a CPO car. Just one. I'd bet you can't.

A trade assist **is not** the lemon law. A car that meets the requirements for the lemon law **can not** have a trade assist. Further, BMW does have a vehicle disclosure form that must be signed by the dealer and end retail customer for any car that goes through the trade assist program. If you buy one of these cars and don't see the form, that is because your dealer is hiding it-- not BMW.
 
#14 · (Edited)
I think it's a good thing that trade assist cars are sold with a CPO warranty... At least BMW is standing behind them..

Would you rather they go through the auto auction without the extended warranty?
 
#18 ·
this is kinda scary to me, because you know if the high class BMW dealers are doing such underhanded things to get money... what are the rest of the dealerships doing?! Just makes me thankful I usually bring prospective buys to my personal mechanic (or him to them) before buying to avoid this.
 
#24 ·
Why is everyone getting their knickers in a knot?

A CPO is a USED CAR that the manufacturer is warranting. If you are buying a USED CAR, you are taking the chance that it has a "story" - crash damage, repo, trade assist, whatever. Can you imagine anyone making a stink because the used Hyundai they bought at Swifty Soprano's Used Cars had a problem? At least the CPO comes with a warranty - good luck getting Swifty to stand behind the iron he's moving.

There is a problem if - and ONLY if - BMW is laundering titles and misrepresenting a car that under the relevant state statutes is deemed to be a "lemon". There is a lot of bluster here, but I have yet to see any EVIDENCE that BMWUSA wittingly or unwittingly laundered the title of even one vehicle.

Sounds to me like a bunch of sleazy lawyers trolling for business. And second-rate journalists hungry for a splashy headline.

Any mass-produced human-made product is going to have variations in quality (Google Edward Deming). It is inevitable that a sample of new cars will have problems that are challenging to fix; and regular 'Fest members have certainly seen examples of this, not just with the F10 but in vitrually every other BMW model. I give BMWUSA huge props for standing behind the product they distribute (not manufacture), via the trade assist program.
 
#34 ·
Why is everyone getting their knickers in a knot?

A CPO is a USED CAR that the manufacturer is warranting. If you are buying a USED CAR, you are taking the chance that it has a "story" - crash damage, repo, trade assist, whatever. Can you imagine anyone making a stink because the used Hyundai they bought at Swifty Soprano's Used Cars had a problem? At least the CPO comes with a warranty - good luck getting Swifty to stand behind the iron he's moving.

There is a problem if - and ONLY if - BMW is laundering titles and misrepresenting a car that under the relevant state statutes is deemed to be a "lemon". There is a lot of bluster here, but I have yet to see any EVIDENCE that BMWUSA wittingly or unwittingly laundered the title of even one vehicle.

Sounds to me like a bunch of sleazy lawyers trolling for business. And second-rate journalists hungry for a splashy headline.

Any mass-produced human-made product is going to have variations in quality (Google Edward Deming). It is inevitable that a sample of new cars will have problems that are challenging to fix; and regular 'Fest members have certainly seen examples of this, not just with the F10 but in vitrually every other BMW model. I give BMWUSA huge props for standing behind the product they distribute (not manufacture), via the trade assist program.
+1

I will add that a car becomes a "lemon" when settlement under the terms of the statute has been completed. It does not automatically become a lemon when the requirement of the individual state statute or Magnuson-Moss Act has been reached. In Illinois, for example, the statute requires that the owner first has to go through an "informal" settlement procedure with the manufacturer. Only when the owner is dissatisfied with the outcome of the informal procedure can they then initiate a civil action to enforce their rights under the statute.

So at anytime the manufacturer can buy back or trade assist the defective vehicle and circumvent the car being branded a "lemon". There is nothing illegal or imoral about this. A buyer of any pre-owned vehicle should do their due diligence to determine the history of the car. Caveat emptor.
 
#25 ·
BTW I just clicked on the OP's name and the "read all posts" feature. Surprise, surprise: all 32 posts she has made (I'm assuming from the sig the OP is a she) concern her problems with her vehicle, and her over-arching vendetta against BMW.

Oh, the drama!
 
#26 ·
Time to let this thread die then. OP will never admit to or understand the legal difference between a lemon law buyback and a voluntary "trade assist" buyback.
 
#30 ·
This is extremely common in the 135i's. In fact, i've heard they're so common in the 135's that BMW will replace the HPFP no questions asked. Seems like you're better off getting the 128i due to the fact that they have no HPFP.
 
#36 ·
Curious- what is the proper way for manufacturers to handle lemons? Are they meant to be "destroyed"? Or just disclosed to the buyer?

Have a feeling that its not "BMW" that is involved in some of these sleazy stories but individual dealers. Car gets lemoned, sent to a large dealer auction, dealer from another state purchases and knowingly or not "launders" the title.
 
#38 ·
... Car gets lemoned, sent to a large dealer auction, dealer from another state purchases and knowingly or not "launders" the title.
... The cars are often resold to other buyers, who may not be aware that the car is a lemon.

Manufacturers say that when they buy back a lemon, they fix the problem before sending it to a dealer auction and that paperwork is done to identify the vehicle as a "lemon buyback," much the way vehicles decaled total losses by insurance companies are supposed to be branded as "salvage."

But fewer than half the states require that lemon buybacks be designated as such on their titles. And even when a car is labeled a lemon, that designation can conveniently be lost if a car is sold in a state other than the one where a lemon law case was pursued.
I can say with some authority that this is almost assuredly what happens. Some years ago, I owned a 9-month-old GMC Jimmy that was bought back under PA lemon law; I later learned that the vehicle was held by the buyback dealer for a period of time, sold at a dealer-only auction, then subsequently bought by a likely unsuspecting consumer.

Like the old saying goes: caveat emptor...
 
#37 ·
It might be reasonable to assume that they are disassembled and crushed by the manufacturer, since they've already been determined to be unrepairable. But that isn't what usually happens.

The cars are often resold to other buyers, who may not be aware that the car is a lemon.

Manufacturers say that when they buy back a lemon, they fix the problem before sending it to a dealer auction and that paperwork is done to identify the vehicle as a "lemon buyback," much the way vehicles decaled total losses by insurance companies are supposed to be branded as "salvage."

But fewer than half the states require that lemon buybacks be designated as such on their titles. And even when a car is labeled a lemon, that designation can conveniently be lost if a car is sold in a state other than the one where a lemon law case was pursued.
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top