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Old 05-31-2020, 04:57 AM
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Does Carfax ding affect BMWFS buyout offer

Not sure this has been addressed.


Does BMWFS take into account in determining buyout offer if there is Carfax reported body shop accident. Usually the trade value is worth less with a reported accident so you would think that the offer should be less than a clean Carfax

Any thoughts or experiences?
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Old 05-31-2020, 09:23 AM
1968BMW2800 1968BMW2800 is offline
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I certainly wouldn't raise the issue. You could end upon the hook for diminished value!

"Hey BMWFS, I wrecked the car so you should take the hit and sell it to me for less!!"
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Old 05-31-2020, 09:35 AM
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Interesting point.

I assume that if the car is repaired to an acceptable standard, would BMWFS have a hard time claiming diminished value. Nothing is being hidden as they have access to Carfax too.

One of several reasons for leasing is to have the "risk of ownership" rest with BMWFS. BTW, the accident was very minor single car situation. Too bad the wall was unwilling to move.
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Old 05-31-2020, 09:41 AM
1968BMW2800 1968BMW2800 is offline
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Originally Posted by mjsbmw View Post
Interesting point.

I assume that if the car is repaired to an acceptable standard, would BMWFS have a hard time claiming diminished value. Nothing is being hidden as they have access to Carfax too.

One of several reasons for leasing is to have the "risk of ownership" rest with BMWFS. BTW, the accident was very minor single car situation. Too bad the wall was unwilling to move.
Right. So if the car was repaired to an acceptable standard, you're whole and the BMWFS offer is what it is.

And I stand corrected; "Hey BMWFS, the wall wrecked the car so you should take the hit."

Either way, you are so right that one of the reasons for leasing is to have the risk rest with BMWFS. Only reason to take the BMWFS buyout offer is because it works for you as things stand.
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Old 05-31-2020, 09:41 AM
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The buyout is determined by the residual. Right now there is a discount based on the year and model you have. Nothing to do with accident history or Carfax.
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Old 05-31-2020, 10:15 AM
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I certainly wouldn't raise the issue. You could end upon the hook for diminished value!

"Hey BMWFS, I wrecked the car so you should take the hit and sell it to me for less!!"
Thats the interesting point!

Diminished Value (DV) claims on trade in are in BMWs best interest, so dealers do so.

But if BMWFS would- as a matter of broad national policy- begin to recognize DV exists, it would open up massive liability on the part of insurers. Again this would be in BMWs direct (immeicdate) interest, but would be just a morass legally and in the insurance industry.


Insurers have waged a MASSIVE campaign to control DV claims for many years
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Old 05-31-2020, 11:21 AM
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I have not traded in a vehicle in 30 plus years. Always leased and walked away at end of lease.

But for those who have traded in a vehicle, the used car manager determines his trade value based on condition and if it has a Carfax ding.

I think most of us here would pay more for a clean Carfax vehicle and correspondingly, pay less if there is a Carfax ding, even if the repairs are perfect, without flaws.

At the end, the value of the vehicle to me is based on what is the value of similar cars on various sites at the time of the BMWFS offer. A clean Carfax is always a better thing.

Every time my lease comes to an end, I go through the analysis of walk vs buy and after crunching all the numbers, including BMWCCA rebate, expected maintenance/tires and what it will be worth another 3 years down the road, getting a new one is not really that much more expensive. The offer by BMWNA needs to be attractive to make it all worth while.
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Old 05-31-2020, 11:29 AM
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Originally Posted by alex2364 View Post
The buyout is determined by the residual. Right now there is a discount based on the year and model you have. Nothing to do with accident history or Carfax.

Thanks for your comment. I guess there is no correlation to what the vehicle will bring at auction. When cars go down the lane, the board for all bidders to see shows if there is a Carfax ding. BMW will get less.

Does BMWFS make DV claims? BTW, when the vehicle is repaired, the insurance company does send info to the lien holder so this is not a secret.


Has anyone been charged back for a dv claim? A poorly done repair .sure. Curious what is happening out there.
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Old 05-31-2020, 11:44 AM
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Originally Posted by mjsbmw View Post
Thanks for your comment. I guess there is no correlation to what the vehicle will bring at auction. When cars go down the lane, the board for all bidders to see shows if there is a Carfax ding. BMW will get less.

Does BMWFS make DV claims? BTW, when the vehicle is repaired, the insurance company does send info to the lien holder so this is not a secret.


Has anyone been charged back for a dv claim? A poorly done repair .sure. Curious what is happening out there.
Download and read the lease end inspection form.

If your car passes the inspection and is signed back to BMWFS, you're done. Only potential liability is for anything noted in the lease end inspection -- tires, dings, windshield chips, missing parts, etc.

It is the responsibility of the insurance carrier and the collision repair facility to ensure repairs are done correctly and to spec. Your insurance should indemnify you from any liability related to the collision.

If the repair was done correctly, and the car is returned to a BMW dealer to be grounded at lease end, and the lease end inspection is signed off, there should be no ongoing liability. There is nothing in your lease contract referencing a requirement for a spotless Carfax report. Carfax isn't mentioned at all.
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Old 05-31-2020, 12:10 PM
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In general on automobile Diminishec Value, this was interesting.

https://www.mwl-law.com/wp-content/u...-50-STATES.pdf
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Old 05-31-2020, 05:11 PM
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I very much appreciate all your comments. Thank you!
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Old 05-31-2020, 05:27 PM
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Interesting summary Doug.


BMWNA/AG/FS has purchased large insurance policies that pay them when cars they lease come back in and do not achieve the expected values. These are business/commercial polices what may cover 10s of millions of dollars in exposure. There are many reasons any given car might not sell for the expected value: The leasee chooses to return it and not buy it. BMWFS was wrong when they set the residual value for a particular car... there are too many of that model... A car might have been poorly repaired. Or a car might have been expertly repaired but still has a car fax report.

All these factors can result in lower-than-expected lease end return values. BMW has policies that protect them against unexpected variances. (I am guessing but it isn't 'if the residual is 40k and they sell it for 38k, someone cuts them a 2k check'....more likely "if the loss in value exceeds 20%, the policy will cover such excess". Something like that.). The important point is that all of this becomes one big pot of money, not a car-by-car thing.

In OPs example, it doesn't make sense for BMW to increase their loss in the lease end buyout process to protect the owner from BMWs own Diminished Value.

Think about it. it is BMWs loss. BMW doesn't actually 'realize' this loss until they sell it. (Likely not until they sell it TO AN AUCTION HOUSE.). Why would BMW lower the value (likely then not qualified under their policy) for this loss value and pass it to the entity that created the loss.


Anyway, sure I know what OP is getting at. It sort of makes sense if you are looking at this as if it should be consistent and in favor of a buyer/owner. And yes, everything BMW does it does for its owners and all that,,,,

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OEM is not what BMW sells


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Old 06-03-2020, 11:10 PM
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I can see it now....

someone calls up BMW FS and asks "whats the buyout for my car"?, gets a number, then takes a hammer and hits a panel, sends them a picture, and says "how about now?". :-p
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Old 06-08-2020, 12:38 PM
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I can see it now....

someone calls up BMW FS and asks "whats the buyout for my car"?, gets a number, then takes a hammer and hits a panel, sends them a picture, and says "how about now?". :-p
What a clever thought

Only difference is that the damaged panel will be charged back at time of inspection.

At the end, relationship of buyout offered and market value is what I will be looking at as we approach end of lease. My goal is not to subsidize BMW FS if their value (maybe insured by a 3rd party risk carrier) is upside down.
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Old 06-08-2020, 01:03 PM
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At the end, relationship of buyout offered and market value is what I will be looking at as we approach end of lease. My goal is not to subsidize BMW FS if their value (maybe insured by a 3rd party risk carrier) is upside down.
Well, while I agree the market value proposition needs to make some kind of sense, I hope we have all seen that this really isn't a very good arbitrage play in most instances. It's a possible unanticipated opportunity because three years ago nobody expected BMWFS to start offering below residual discounts directly to leasees. But, at this moment, for obvious reasons, they are.

We cannot know what used car prices will look like in six months, so there is no way to know how a BMWFS buy-out offer stacks up against the future marketplace. The available data suggests there will be a lot of lease return vehicles chasing a limited number of customers so, absent careful market manipulation by the auction houses, manufacturers and/or dealers (as in holding inventory back from the retail marketplace), the laws of supply and demand suggest falling resale pricing ahead.

Thus, the reasons to buy a car at lease end seem to center around liking the car more than a new alternative vehicle, plus a reasonable opportunity cost to move from renting to ownership of a three year old depreciating BMW that will soon be out of warranty and will not have that wonderful full-on New Car Smell.

When all is said and done, these schemes benefit BMW first and, if we're lucky, we benefit as well, a little bit. For some, that little bit of benefit may be worth it. YMMV.
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Old 06-08-2020, 02:46 PM
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Originally Posted by 1968BMW2800 View Post
I certainly wouldn't raise the issue. You could end upon the hook for diminished value!

"Hey BMWFS, I wrecked the car so you should take the hit and sell it to me for less!!"
That happened to a coworker whose leased car was not repaired right, and the lease return inspection ended with charge back.

Luckily the repair was done at insurer's network repair shop(non-CCRC), so the lessee complained and got approved to redo at CCRC, and BMWFS OK'ed the redo.

The lessee eventually changed mind and purchased the car with buyout discount.

He was told for buyout BMWFS did not care about redo, just pay RV minus discount and be done.
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