Recall preventing purchase at end of lease

ccyippy · March 2016

Hi all,

First time posting here as I just got a bombshell bad news dropped on me yesterday. My lease on my 2013 X1 is coming due in a week and I've been leaning toward purchasing it since I negotiated a pretty good deal and my mileage is quite low that it's almost a like-new car.

I spoke with a BMW Financial Services rep near end of last month (February) about what I'd need to do if I want to return vs. if I want to purchase and they said that they haven't heard from BMW if my car would be for sale yet so we need to wait until March to see what the news is and he also said I don't have to make a decision on whether to return or buy until literally the day of lease end. I guess in my naive mind when I did a lease, I always thought the option to purchase is mine and is automatic so I didn't think this would be a problem, especially since they also said that they would extend my lease a courtesy if the decision on sale can't be made until later.

Then yesterday morning I got a call from BMW FS reminding me that my car lease is ending and I need to return my car to the dealership where I bought the car. I asked if they have a decision yet on whether I can buy and he told me that I need to turn in my car and that sale is not an option for me because BMW has issued a recall on my model. I told the rep I didn't hear about the recall at all and he said it's only just been issued and that he would send me a link that explains it. I told the rep that it's unfair they would tell me so late when I only have less than a week and that's not enough time for me to purchase a new car or drive my car to return at the original dealership. The rep said that as a courtesy they could extend my lease for two months to give me time. I asked if BMW's decision refusing to sell to me would change during those two months, he said most likely not. I researched it online and found out about the airbags. However, I think this is easily something they can just switch as opposed to take the entire car.

I am rather distraught that I now must think about purchasing a new car (and I am not hot about the new X1 model and I don't like that it's taller when I saw it at a dealer's not to long ago) and potentially have to pay wear and tear fines and disposition fees if I don't buy a BMW next. I checked my lease agreement, nowhere in it says that BMW has the option to decide whether to sell, but rather that the option to purchase is mine and I would need to notify them "in advance" to prepare paperwork but it doesn't say how early in advance.

Can someone please advise on what should be my next steps? Thanks so much in advance!

Michaell · March 2016

ccyippy said:
Hi all,

First time posting here as I just got a bombshell bad news dropped on me yesterday. My lease on my 2013 X1 is coming due in a week and I've been leaning toward purchasing it since I negotiated a pretty good deal and my mileage is quite low that it's almost a like-new car.

I spoke with a BMW Financial Services rep near end of last month (February) about what I'd need to do if I want to return vs. if I want to purchase and they said that they haven't heard from BMW if my car would be for sale yet so we need to wait until March to see what the news is and he also said I don't have to make a decision on whether to return or buy until literally the day of lease end. I guess in my naive mind when I did a lease, I always thought the option to purchase is mine and is automatic so I didn't think this would be a problem, especially since they also said that they would extend my lease a courtesy if the decision on sale can't be made until later.

Then yesterday morning I got a call from BMW FS reminding me that my car lease is ending and I need to return my car to the dealership where I bought the car. I asked if they have a decision yet on whether I can buy and he told me that I need to turn in my car and that sale is not an option for me because BMW has issued a recall on my model. I told the rep I didn't hear about the recall at all and he said it's only just been issued and that he would send me a link that explains it. I told the rep that it's unfair they would tell me so late when I only have less than a week and that's not enough time for me to purchase a new car or drive my car to return at the original dealership. The rep said that as a courtesy they could extend my lease for two months to give me time. I asked if BMW's decision refusing to sell to me would change during those two months, he said most likely not. I researched it online and found out about the airbags. However, I think this is easily something they can just switch as opposed to take the entire car.

I am rather distraught that I now must think about purchasing a new car (and I am not hot about the new X1 model and I don't like that it's taller when I saw it at a dealer's not to long ago) and potentially have to pay wear and tear fines and disposition fees if I don't buy a BMW next. I checked my lease agreement, nowhere in it says that BMW has the option to decide whether to sell, but rather that the option to purchase is mine and I would need to notify them "in advance" to prepare paperwork but it doesn't say how early in advance.

Can someone please advise on what should be my next steps? Thanks so much in advance!

This is the first time I've heard of a manufacturer refusing to sell a car to the customer at the end of the lease due to an open recall. What are the details? Is this a safety issue? Can you research on the web to see if there has been any discussion of the potential recall in the past few months?

I don't know what recourse you have, if any. It takes two parties to consummate a transaction; if one party refuses to participate, I simply don't know what the other party (you, in this case) can do about it.

I suppose you can contact an attorney to see what options they suggest. And, I'll get others who are regulars here to weigh in with their opinions, as well.

abacomike · March 2016

Michaell said:

Hi all, First time posting here as I just got a bombshell bad news dropped on me yesterday. My lease on my 2013 X1 is coming due in a week and I've been leaning toward purchasing it since I negotiated a pretty good deal and my mileage is quite low that it's almost a like-new car. I spoke with a BMW Financial Services rep near end of last month (February) about what I'd need to do if I want to return vs. if I want to purchase and they said that they haven't heard from BMW if my car would be for sale yet so we need to wait until March to see what the news is and he also said I don't have to make a decision on whether to return or buy until literally the day of lease end. I guess in my naive mind when I did a lease, I always thought the option to purchase is mine and is automatic so I didn't think this would be a problem, especially since they also said that they would extend my lease a courtesy if the decision on sale can't be made until later. Then yesterday morning I got a call from BMW FS reminding me that my car lease is ending and I need to return my car to the dealership where I bought the car. I asked if they have a decision yet on whether I can buy and he told me that I need to turn in my car and that sale is not an option for me because BMW has issued a recall on my model. I told the rep I didn't hear about the recall at all and he said it's only just been issued and that he would send me a link that explains it. I told the rep that it's unfair they would tell me so late when I only have less than a week and that's not enough time for me to purchase a new car or drive my car to return at the original dealership. The rep said that as a courtesy they could extend my lease for two months to give me time. I asked if BMW's decision refusing to sell to me would change during those two months, he said most likely not. I researched it online and found out about the airbags. However, I think this is easily something they can just switch as opposed to take the entire car. I am rather distraught that I now must think about purchasing a new car (and I am not hot about the new X1 model and I don't like that it's taller when I saw it at a dealer's not to long ago) and potentially have to pay wear and tear fines and disposition fees if I don't buy a BMW next. I checked my lease agreement, nowhere in it says that BMW has the option to decide whether to sell, but rather that the option to purchase is mine and I would need to notify them "in advance" to prepare paperwork but it doesn't say how early in advance. Can someone please advise on what should be my next steps? Thanks so much in advance!
This is the first time I've heard of a manufacturer refusing to sell a car to the customer at the end of the lease due to an open recall. What are the details? Is this a safety issue? Can you research on the web to see if there has been any discussion of the potential recall in the past few months? I don't know what recourse you have, if any. It takes two parties to consummate a transaction; if one party refuses to participate, I simply don't know what the other party (you, in this case) can do about it. I suppose you can contact an attorney to see what options they suggest. And, I'll get others who are regulars here to weigh in with their opinions, as well.

BMW FS owns the car. They reserve the right to not sell the car to you if there is a defect inherent in the recall. Even though your lease states that you have the right to purchase the car for the residual value, there are exceptions such as the one they described. You can offer to sign a "hold harmless" agreement with them to relieve BMW of any liability should the airbags fail or if they are activated improperly. But my guess is if they reject your offer to sign a hold harmless agreement, you are probably SOL!

houdini1 · March 2016

Is there some reason that you can't just have the air bags replaced during the next two months? I would think that would negate the recall on your car. I would also check around and see if any dealer is selling your particular model to the public, if they are, have them explain how.

ccyippy · March 2016

The recall is related to the Takada airbag on the driver side, they only just announced that my model is included in the recall back in February, however, because BMW has not gotten around to sending out the notification yet, I was not aware of this until the BMW FS rep told me. I researched it and this is the same defect that has affected the air bags in not just BMW but Honda and many other manufacturers for the past couple of years and they remedied the problem with replacement part, so I would assume that the airbag in my car can also be replaced, certainly something they can do in 2 months if they can extend my lease.

What also makes this interesting here is that when I went to the BMW recall website the rep gave me yesterday to confirm that my car is in the recall, the website said that recall was updated on Feb 11th, which is a good 2 weeks before my first call with BMW FS and that rep neglected to tell me that such recall could affect my purchase option! I feel like that rep misled me in thinking that my option would still be open and I wish that they had told me sooner so I'd have more time to make a decision.

I know that BMW FS owns my car but nothing in the lease agreement says they can decide to NOT sell me the car, it's not their option to exercise but rather that I have the option to purchase. It really doesn't make any sense for why a manufacturer would ever NOT want to sell a car after a lease. I think they know my mileage and car condition from my last checkup and probably figure that they can sell it for more than my residual value. If that is the case, then it's really bad that they are gaming the system to screw over a customer for some petty gain.

I already checked online and BMW USA website has several certified pre-owned 2013 X1 listed for sale by dealers, so this probably means they do have the part available for replacement.

kyfdx · March 2016

Heard about a similar problem from another BMW lessee. They couldn't take advantage of a BMWFS pull-ahead program, because the car they would be turning in couldn't be sold.

It can take a long time for Takata to replace all of those airbags. I waited a year for the passenger airbag in my '06 model, and the day it was done, they told me that the driver airbag is also on recall. It's been 9 months and no word on that one, yet.

They can't sell you a car that has a safety recall. Not sure you can do anything about it. If you really want the car, extend the lease and see what happens.

houdini1 · March 2016

It seems that if they deem the car unsafe to sell, it should also be deemed unsafe to drive, and they are aware that you are having to drive a car that is unsafe. They should be supplying you with a loaner of like kind until your car is repaired.

With your lease coming up, they should put you at the front of the line to get the repair. I also wonder how some of the other mfgs. are handling cases like this.

qbrozen · March 2016

Seems strange to me, but I can't say I know all the ins and outs of lease agreements. That said, I would certainly be of the strong opinion that if they refuse to sell it to me, then I have the right to refuse to pay the disposal fee.

I also wonder if, since you feel the residual is so great, you don't have equity in the vehicle. If you were to trade it, you could use that equity toward another vehicle. So what happens in that situation? Does BMW owe you that money?

ccyippy · March 2016

you brought up a good point, on another forum people are wondering about how does this affect the market value of their cars since they can't trade in at BMW or non-BMW dealers. I am not currently thinking about the potential gain I could make if I were to purchase and then sell since it's all moot if they won't sell it to me...but more importantly is that I've been paying for this car in the past 3 years while saving to pay for the residual. By returning and getting a new car, I'd need to re-start that process, i.e., try a car for a while and see if I like it and then get the chance to own it outright.

isellhondas · March 2016

This is a horrible, widespread situation. Last July we bought a 2004 Toyota Avalon from our next door neighbors as an extra car. They informed me that it had an open airbag recall and Toyota was waiting for parts.

I'm still waiting and repeated calls to Toyota Corporate have not accomplished anything. Unlike Honda, they refuse to provide us with a car to drive. My wife is afraid to drive it.

Now, had our neighbors elected to trade it in, it will have sat now unsold for almost a year while it rots in some storage lot and depreciates by the month.

Our 2003 CRV also got recalled for the same thing and it was fixed ion three days and Honda handed me the keys to a new Civic to drive.

I understand that some very old BMWS have been recalled and those inflators haven't been produced in many years. This is one recall that is no joke!

isellhondas · March 2016

qbrozen said:
Seems strange to me, but I can't say I know all the ins and outs of lease agreements. That said, I would certainly be of the strong opinion that if they refuse to sell it to me, then I have the right to refuse to pay the disposal fee.

I also wonder if, since you feel the residual is so great, you don't have equity in the vehicle. If you were to trade it, you could use that equity toward another vehicle. So what happens in that situation? Does BMW owe you that money?

BMW doesn't owe than that money and they probably don't want another used car on their lot that they can't sell for who knows how long. Just a bad situation for everyone involved. I would sure hate to own stock in Takata!

iamthestig · March 2016

I'm in the same situation with my 2013 Volkswagen Passat. The lease is ending at the end of this month, and I decided to purchase the car. I had financing lined up and everything all set at the VW dealer where I initially leased the car, but on the day I was scheduled to sign the papers the dealer called to tell me they could not sell me the car. (!)

Apparently VW corporate issued a bulletin to all dealers stating that they cannot sell any vehicles with an open recall on Takata airbags. My Passat was recalled last month, but no parts are available and there is no timeline for the repair. As the dealer explained to me, when a VW dealer facilitates a lease purchase, the car is briefly in their inventory, and that prohibits them from selling it. VW's main concern is the liability they take on when selling me a recalled vehicle. The dealer then showed me 10 used Passats sitting on their back lot that they could not sell.

My next step was to call VW Credit, as they hold my lease and own my car. The people at VW Credit had no problem selling me the car as long as I purchased it independently and not through a VW dealership. I ended up financing it through my bank and buying it from VW Credit directly, sending the paperwork back and forth through the mail. It was a much slower process and more inconvenient than doing everything in one step at the dealer, but in the end I now own the car that I want, the car that I've taken care of and maintained over the past three years, the car that I had an excellent pre-negotiated lease-end price for.

Personally, I find this *very* frustrating. This is a complete CYA move for both VW and their dealers, and they are clearly only interested in protecting themselves. The way I see it, either the car is completely unsafe to drive and they should take it off the road and give me a loaner until the airbag is resolved, extend my lease until a fix is available, and then allow me to purchase the car after it is fixed. Or, they should just be OK with me driving the car and allow me to buy it through a dealer, perhaps with an added waiver where I agree not to hold the dealer liable for any damages that may come from the recalled airbag.

I got what I wanted in the end, but I've lost respect for VW in the process (if that's even possible these days).

kyfdx · March 2016

@imathestig Congrats on figuring a way around it. Glad it all worked out in the end.

(still waiting on a driver-side airbag, myself)

isellhondas · March 2016

iamthestig said:
I'm in the same situation with my 2013 Volkswagen Passat. The lease is ending at the end of this month, and I decided to purchase the car. I had financing lined up and everything all set at the VW dealer where I initially leased the car, but on the day I was scheduled to sign the papers the dealer called to tell me they could not sell me the car. (!)

Apparently VW corporate issued a bulletin to all dealers stating that they cannot sell any vehicles with an open recall on Takata airbags. My Passat was recalled last month, but no parts are available and there is no timeline for the repair. As the dealer explained to me, when a VW dealer facilitates a lease purchase, the car is briefly in their inventory, and that prohibits them from selling it. VW's main concern is the liability they take on when selling me a recalled vehicle. The dealer then showed me 10 used Passats sitting on their back lot that they could not sell.

My next step was to call VW Credit, as they hold my lease and own my car. The people at VW Credit had no problem selling me the car as long as I purchased it independently and not through a VW dealership. I ended up financing it through my bank and buying it from VW Credit directly, sending the paperwork back and forth through the mail. It was a much slower process and more inconvenient than doing everything in one step at the dealer, but in the end I now own the car that I want, the car that I've taken care of and maintained over the past three years, the car that I had an excellent pre-negotiated lease-end price for.

Personally, I find this *very* frustrating. This is a complete CYA move for both VW and their dealers, and they are clearly only interested in protecting themselves. The way I see it, either the car is completely unsafe to drive and they should take it off the road and give me a loaner until the airbag is resolved, extend my lease until a fix is available, and then allow me to purchase the car after it is fixed. Or, they should just be OK with me driving the car and allow me to buy it through a dealer, perhaps with an added waiver where I agree not to hold the dealer liable for any damages that may come from the recalled airbag.

I got what I wanted in the end, but I've lost respect for VW in the process (if that's even possible these days).

Why would you lose respect for Volkswagen over this? This time, they have done nothing wrong. They HAVE to cover themselves. If someone got hurt or killed some nasty trial lawyer would tear them apart.

For that matter, I continue to drive our Avalon as I wait for parts to arrive. It's been a year now.

Just a NASTY situation for everyone involved.

cmhj2000 · March 2016

When car companies deploy a CYA theme, I'm out car shopping.

mspie8212 · March 2016

My X1 has 11 months left on the lease, less than 12k miles on it. I'm looking for bmw to just let me out of my lease since its recalled on the driver side airbag. Any tips?

kyfdx · March 2016

mspie8212 said:
My X1 has 11 months left on the lease, less than 12k miles on it. I'm looking for bmw to just let me out of my lease since its recalled on the driver side airbag. Any tips?

Tip: Put that idea out of your head. Won't happen.

stever · March 2016

"You may have breach of warranty claim or Lemon Law claim if your car's been sitting at the dealership for a significant period of time waiting for a part," Ginsburg said. (6ABC.com)

Trouble is, if you dump it at the dealer and tell them to fix it, they don't have any obligation to give you a loaner.

Guess you could sue for your rental fees too though.

kyfdx · March 2016

stever said:
"You may have breach of warranty claim or Lemon Law claim if your car's been sitting at the dealership for a significant period of time waiting for a part," Ginsburg said. (6ABC.com)

Trouble is, if you dump it at the dealer and tell them to fix it, they don't have any obligation to give you a loaner.

Guess you could sue for your rental fees too though.

It's a recall, and parts aren't available. Don't think the lessee can just decide that it can't be driven, then expect BMW to pay him for it.

stever · March 2016

Interesting recent comment over at Automotive News:

"Just saw some pictures of airbag victims. Nobody in their right mind would drive one of these recalled vehicles until the issue is resolved."

Not only are parts hard to come by, some of the replacement parts from a different manufacturer don't work either.

kyfdx · March 2016

stever said:
Interesting recent comment over at Automotive News:

"Just saw some pictures of airbag victims. Nobody in their right mind would drive one of these recalled vehicles until the issue is resolved."

Not only are parts hard to come by, some of the replacement parts from a different manufacturer don't work either.

Pray for me, then.. I've been driving mine for six years, and it's ten years old. Of course, I've only been on pins and needles for 9 months, since I found out about it..

stever · March 2016

Yikes!

(Best not look at the internet photos....)

bmwx1recall · July 2016

My 2104 X1 has a recall and my lease is up in Oct. I have low mileage and had planned to buy the car. Now BMW says I can't buy it, but I can get a loner car until my lease is up OR terminate my lease without paying any fees. They said they will not replace the airbags - it is a long ways off. I would have taken the 2016 model and a new contract, but the monthly payment is 50% HIGHER, yet the car value is basically the same. Just wondering if anyone has any new updates to this recall situation or more advice about what do to.

Recall preventing purchase at end of lease

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