BMW Selling Laundered Titles

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 - http://www.dailyfinance.com/story/is...wned/19669684/

http://www.dailyfinance.com/story/au...wned/19669684/


I hope not

Originally Posted by Jah Rastafari

http://www.dailyfinance.com/story/au...wned/19669684/


I hope not

Believe it. And it's not just cars with the HPFP problem.

I know first hand that they sold my friend's X3 (which they bought back due to the never-ending transmission problems) as a CPO car.

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.

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...

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...

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.

Always remember the old addage when purchasing used from a dealer (including CPO): "Caveat emptor" ("Let the Buyer Beware").

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.

Please look at the links in the Daily Finance Article.

Originally Posted by maof2girls

Please look at the links in the Daily Finance Article.

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.

Originally Posted by Andrew*Debbie

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.

this may be technically correct, if BMW is buying back problem cars before they become lemons, but then selling them as CPOs.

The real question is what, if anything, is being disclosed to the consumer?

Of course not many people would knowingly buy a used car that had such a bad history of failures/repairs that the manufacturer deemed it to be unrepairable and repurchased it from the consumer...

§ 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).

Originally Posted by maof2girls

§ 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).

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.

Originally Posted by pilotman

Of course not many people would knowingly buy a used car that had such a bad history of failures/repairs that the manufacturer deemed it to be unrepairable and repurchased it from the consumer...

The trade assist program is not for cars that are "deemed unrepairable" -- that is what the lemon law and other buyback programs are for. The dealer has to fix the car in order to use the trade assist program -- if they can not fix it, it becomes a "buyback" (even if not through the lemon law), BMW takes the car back from the dealer and it also can not be enrolled in CPO.

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?

Thank you Sarafil. When BMW buys back a car it can not repair and sells it as a CPO that is among other things ILLEGAL

Originally Posted by SARAFIL

The trade assist program is not for cars that are "deemed unrepairable" -- that is what the lemon law and other buyback programs are for. The dealer has to fix the car in order to use the trade assist program -- if they can not fix it, it becomes a "buyback" (even if not through the lemon law), BMW takes the car back from the dealer and it also can not be enrolled in CPO.

ok, it sounds like the example given in the article was a buyback, not a trade assist, would you agree?

Is it fair to say that most vehicles handled under BMW's "buyback" program would also qualify as lemon law vehicles under a given state's law?

So basically BMW is buying the car back before it is formally declared by a court to be a lemon....and there is nothing wrong with that, per se.

(I'm a commercial litigator at a large law firm in Detroit, and I have defended a few dealerships over the years in lemon law claims although admittedly it is not my primary focus).

The question then becomes whether this practice violates state law. Difficult to say, since different states have different lemon laws. I think a court could find that the vehicle in the example was a lemon buyback and the title was not updated to reflect this fact.

In the example given, the 335 had a lot of recurring problems, was repurchased by BMW for $12,600, and then sold as a used car being in "excellent" condition, without any mention of it being certified as a lemon.

Wouldn't you agree that this car was a lemon under the NJ statute cited in the article, if the vehicle was returned (which it was) due a non-conformity which was not corrected within a reasonable amount of time? (we don't know about that second part, i.e. whether there were 4 (or whatever the number is in NJ) separate repair attempts for the same problem, or alternatively, whether the vehicle was out of service for 30 days).



Whether this particular vehicle was sold as CPO or not is irrelevant for this discussion...

Originally Posted by pilotman

ok, it sounds like the example given in the article was a buyback, not a trade assist, would you agree?

Is it fair to say that most vehicles handled under BMW's "buyback" program would also qualify as lemon law vehicles under a given state's law?

So basically BMW is buying the car back before it is formally declared by a court to be a lemon....and there is nothing wrong with that, per se.

(I'm a commercial litigator at a large law firm in Detroit, and I have defended a few dealerships over the years in lemon law claims although admittedly it is not my primary focus).

The question then becomes whether this practice violates state law. Difficult to say, since different states have different lemon laws. I think a court could find that the vehicle in the example was a lemon buyback and the title was not updated to reflect this fact.

In the example given, the 335 had a lot of recurring problems, was repurchased by BMW for $12,600, and then sold as a used car being in "excellent" condition, without any mention of it being certified as a lemon.

Wouldn't you agree that this car was a lemon under the NJ statute cited in the article, if the vehicle was returned (which it was) due a non-conformity which was not corrected within a reasonable amount of time? (we don't know about that second part, i.e. whether there were 4 (or whatever the number is in NJ) separate repair attempts for the same problem, or alternatively, whether the vehicle was out of service for 30 days).



Whether this particular vehicle was sold as CPO or not is irrelevant for this discussion...

The New Jersey Lemon Law applies to new cars, both purchased and leased, which suffer a nonconformity; a defect or condition, which substantially impairs the use, value or safety; that cannot be repaired after three attempts by an authorized manufacturer's dealership. This nonconformity must first occur within the first 24 months or 24,000 miles, whichever comes first. The New Jersey Lemon Law also applies to vehicles that are in the shop for repair twenty (20) or more calendar days during the first 24 months or 24,000 miles (whichever comes first), and those which have a serious defect which could cause bodily harm or death that is not fixed after one repair attempt.
Pilotman in my opinion you are correct.

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.

Originally Posted by maof2girls

The New Jersey Lemon Law applies to new cars, both purchased and leased, which suffer a nonconformity; a defect or condition, which substantially impairs the use, value or safety; that cannot be repaired after three attempts by an authorized manufacturer's dealership. This nonconformity must first occur within the first 24 months or 24,000 miles, whichever comes first. The New Jersey Lemon Law also applies to vehicles that are in the shop for repair twenty (20) or more calendar days during the first 24 months or 24,000 miles (whichever comes first), and those which have a serious defect which could cause bodily harm or death that is not fixed after one repair attempt.
Pilotman in my opinion you are correct.

Thanks for researching that statute....so if a court were to find that a failing fuel pump is a serious defect that could cause bodily harm (maybe, maybe not), or if the vehicle in the example was in the shop for more than 20 days...then it is a defined as a lemon.

Whether or not BMW sells it as a CPO is irrelevant....but if they fail to disclose the lemon status on the title, I think that is what the concern is.

Maybe this is happening and maybe it isn't, I don't know the facts and law well enough, but based upon this discussion it wouldn't shock me at all if this is a violation....

Sounds like there might be something to this....

nevermind

Originally Posted by maof2girls

§ 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

That is the key clause.

In many cases BMW NA buys the cars voluntarily (trade assist) and NOT under the provisions this act.

BMW isn't alone here. Other manufacturers do the same thing to reduce the number of 'lemons'.

So where does "Manufacturer Buyback" fall in this situation? Can they and should they be resold as CPO without customer disclosure?

Originally Posted by 1985mb

So where does "Manufacturer Buyback" fall in this situation? Can they and should they be resold as CPO without customer disclosure?

NO. A manufacturer buys back a car under the lemon law because they can't repair it.

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.

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!