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Discussion Starter #1 (Edited)
Hello,

I have had the privilege of owning multiple BMWs and leasing many of them and utilizing the MSD program. My most recent lease was a ED with the max MSDs allowed. In this case about $5200. I have done this several times and am very familiar with the process. I have read many threads about transferring msds as part of a lease, and done research about what happens when a car gets bought out by a dealer or a carmax situation or otherwise sold at lease end. In short, I've done my homework.

At lease end, because the car was so well maintained and under miles, a Porsche dealer offered me an amount that was appealing to buy the car. At the time of the purchase, they called BMW and obtained a payoff of approx 39k from BMW and offered me a trade in of about 43k. This seemed like a great deal as I would earn 3-4K of equity plus be entitled to my deposits.

I had questions about the deposits and wanted to ensure I would be entitled to them. As such, prior to signing the paperwork, I had the Porsche dealer confirm that the payoff amount did not contemplate the deposits and that I would be entitled to those deposits direct from BMW. To be extra safe, I delayed signing the paper work and called BMWFS the following business day: they informed me that the Porsche dealer would be provided a payoff that did not contemplate the deposits and had "safeguards in place" to make sure this wasn't a problem.

Having secured all the necessary affirmation i needed, I consummated the deal and traded the car in. When I called BMW today to inquire as to the status of my deposit refund, my worst nightmare was realized: they informed me that they had applied those deposits towards the payoff they provided the dealer, and so I would not be receiving any deposits back. This was in direct contradiction to what they had promised days before... so much for safeguards in place!

Upon further investigation, BMW admitted to providing the WRONG payoff to the dealer. They admitted fault and the gentleman I spoke to seemed genuinely shocked this would happen and said it had to go "one or two levels above" him to obtain a resolution. The Porsche dealer, being none the wiser, and I consummated our deal and has already paid BMW. BMW however, has not released the title because I never signed a deposit release authorization form (which they never provided to Porsche) and so they are holding the title. Had they provided that form, we would have caught the mistake and not moved forward. Obviously, I am not inclined to sign the form and so we are now in no mans land.

The Porsche dealer, of course, has already started marketing the car and doesn't want to undo the deal. BMW admits fault but hasn't proposed a solution yet. And I'm stuck in the middle. If the deal doesn't get undone (which looks increasingly likely) then I am out the entire $5200 deposit. Why would anyone pay for the privilege of trading their car in upon lease end? If I don't sign the form, then BMW will tell Porsche they are short and Porsche will obviously either have to pay (and charge me the difference) or undo the deal. This would also totally blow up my relationship with the new dealer and cause everyone a giant headache as for all I know they've already sold the BMW or committed it to another party.

I don't want to blow the deal up with the Porsche dealer as 1.) it's not their fault and they are correct to be equally outraged as I am and 2.) I can't afford to because they are offering me an allocation on a new, rare car which I've already set a date for European delivery on. I've already purchased tickets and booked the trip.

BMW needs to make this right as their error has damaged the dealer and looks to damage me.. what do you think my recourse is? I am awaiting a reply from BMWFS...

Thoughts?
 

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Appears that the Porsche dealership paid BMWFS 33.8K (39k less 5.2k MSD).

To get BMWFS attention and skip to the top level, file a complaint with the Ohio Attorney Generals Office.

Otherwise, the Porsche dealership should refund you $5.2K. I suggest that you use e-mail to communicate so there is a paper trail, and obtain names of whom you have talked with in the past.

What does the Lease Agreement stimulate regarding MSDs?

Good luck and please keep us posted.

EDIT:

Found this interesting post from the late @Nining "all security deposits will be credited against the payoff in other circumstances that do not involve GAP insurance."

I understand the MSD internal rate of return between 10%-13%, but MSD's have significant downside risk when the lease exit is not 'clean', such as returning to a non-BMW Center or using swap-a-lease.
 

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If you are a BMWCCA member, the Club Ombudsman can help you with this. A lot. (You ARE a BMWCCA member, right?)
 

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It all comes down to what's in writing....somewhere....the lease agreement, the payoff paperwork sent to Porsche, an email. Something promised or assured over the phone probably won't mean much now.

You shouldn't have to rely on BMWFS to give you your payoff if you're at the end of your lease. The payoff should be the residual shown in your lease paperwork. What's that amount? If it's $44k (so $39K net of MSDs), then this would be BMWs fault for sloppy communication. If it's really $39K, then you have an issue with the Porsche dealer. (or there's some miscommunication on that end)

Good luck. Let us know what you find out.
 

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Discussion Starter #5
It all comes down to what's in writing....somewhere....the lease agreement, the payoff paperwork sent to Porsche, an email. Something promised or assured over the phone probably won't mean much now.

You shouldn't have to rely on BMWFS to give you your payoff if you're at the end of your lease. The payoff should be the residual shown in your lease paperwork. What's that amount? If it's $44k (so $39K net of MSDs), then this would be BMWs fault for sloppy communication. If it's really $39K, then you have an issue with the Porsche dealer. (or there's some miscommunication on that end)

Good luck. Let us know what you find out.
Thanks for all the replies. To be clear, the payoff is 39k net of deposits, or 44k as TX
Pearl correctly points out. BMW was sloppy in their communication. It’s really not the Porsche dealer’s fault.

The online payoff quote I received was in that range so no red flags were raised- the bmw rep I called before the transaction also gave me the wrong info. Bottom line is that BMW provided. The wrong payoff to the dealer. Also note that BMW mentioned that when they provide payoffs to third parties including deposits they include a deposit release authorization form (refer back to safeguards in place from original note) to avoid this exact issue. They failed to do so here so we all consummated the deal.

Note that I have done 7 plus EDs with this structure for me or my direct family members, never had this issue. The problem is that I feel that I have zero leverage because I currently don’t personally have another BMW in my stable. Ugh.

Here’s hoping they step up.
 

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So the problem now is that you decided to trade the vehicle (vs. simply turn it back in to BMW) based on misinformation (arguably, you should've verified the payoff details yourself, but understandable to go with what BMWFS tells you).

Is there any sales tax (or other) benefit to trading a vehicle in Florida? In TX, you pay sales tax on the net cost (less trade value), so the sales tax savings would still favor trading in at the $1K payoff deficit you mention above. Otherwise, it wouldn't have made any sense to trade the vehicle.

The other angle here is this: BMWFS clearly benefited from their miscommunication. They received a $44K payoff on a vehicle that's apparently worth only $39K if turned back to them. Seems at a minimum they need to allow you to unwind the payoff and turn the vehicle in (if that would've been the route you took having been provided accurate information). That would require Porsche rewriting the deal as a straight sale with no trade. Gets messy.
 

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What a mess. Remember, in the end both BMWNA and PCNA don't give a crap about you. Just a hint of how this will likely turn out:

P dealer gives you the car back, you turn it back to BMW, BMW doesn't even say 'sorry'.

You are incredibly lucky there is a required document involved....
 

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Discussion Starter #8
What a mess. Remember, in the end both BMWNA and PCNA don't give a crap about you. Just a hint of how this will likely turn out:

P dealer gives you the car back, you turn it back to BMW, BMW doesn't even say 'sorry'.

You are incredibly lucky there is a required document involved....
Just wanted to provide an update here. The Porsche dealer graciously agreed to return the vehicle to me, therefore allowing me to return it to BMWFS.

What a relief!
 

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What happened to your allocation? dd you just go and make a deal on the car again? Did the Porsche dealer honor prior pricing or you ended up paying a premium?

Seems like at least half the issue got resolved to your favor.
 

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Just wanted to provide an update here. The Porsche dealer graciously agreed to return the vehicle to me, therefore allowing me to return it to BMWFS.

What a relief!
'graciously'?!? Legally they had absolutely no other choice!
 

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Good to see ard still calling it like it is.

I have been away from this place to long. Some things don't change.

Sent from my SAMSUNG-SM-G920A using Tapatalk
 

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'graciously'?!? Legally they had absolutely no other choice!
Maybe I'm missing something, but I don't see how the Porsche dealer is legally obligated to do anything. They took a trade, made the required payoff and sold a car. They did everything they promised in writing. Maybe there's some sort of 3- or 10- day rescission period in FL, but otherwise, seems this was all BMWFS' fault.

But I'm not a lawyer.
 

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Lease Payoff

Some one at BMWFS screwed up, this is how my payoff letter was issued
 

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Maybe I'm missing something, but I don't see how the Porsche dealer is legally obligated to do anything. They took a trade, made the required payoff and sold a car. They did everything they promised in writing. Maybe there's some sort of 3- or 10- day rescission period in FL, but otherwise, seems this was all BMWFS' fault.

But I'm not a lawyer.
Im guessing (from reading this thread) that the main thing ard is pointing out is the porsche dealer could not obtain title. They paid for the car, but could not obtain title because OP had not signed the document that allows the use of his MSDs as part of the payoff.

That "deposit release authorization form" OP mentioned. Since that was not signed, there was no proof that OP released the deposits, and if OP wouldnt sign it, BMW would not release title to the porsche dealer... so the porsche dealer was "stuck" with the physical car in their possession, but no title.

OP obviously was not going to sign that form without getting the money from somewhere.. either the porsche dealer, or BMW. BMW realized they had not followed their own practices so would not release title...

Only thing the porsche dealer could do was either unwind the deal, or cut OP a check for the difference to get OP to sign the form... at least thats how I am reading it.

I also am not a lawyer however, no where near that.
 

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JJ's is a GREAT summary.

Legalities aside, Porsche took action because they know they cannot sell the BMW without the title.

The client can always agree to signing off on the deposit authorization and get the title released, but then it's agreed to use the MSDs.

BMW isn't going to lose $5,200 for an error like this. Ultimately, it's Porsche's responsibility to ensure they have the right payoff. It would seem unlikely that an error in presenting the payoff was wrong twice, with you and Porsche. That's why dealer's shouldn't shortcut the process and get a printout of the payoff.

The one who loses is the client, who now doesn't have the equity they thought they had. But the deal is the way it should have been.
 

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Maybe I'm missing something, but I don't see how the Porsche dealer is legally obligated to do anything. They took a trade, made the required payoff and sold a car. They did everything they promised in writing. Maybe there's some sort of 3- or 10- day rescission period in FL, but otherwise, seems this was all BMWFS' fault.

But I'm not a lawyer.
On thing to consider: car dealers have a different set of responsibilities than us civilians (or even non car sale businesses)- most states have rules that dictate how they MUST process deals and ensure that at the end of the day, the rules have been followed. (This is why people generally allow a dealer to act as the escrow agent, and make sure documents are properly signed, money is transferred, etc, etc. Dealers screw this up and the state can come down hard on their license.)

Agree it was BMWs fault, but as JJ pointed out, once they realized they could not provide all the elements the state required under their states new car sales rules, they had to unwind it.
 
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