# Why BMWFS is paying you to keep it



## 1968BMW2800 (Aug 13, 2016)

As reports of offers of increased discounts from residual trickle in, we understand that BMWFS doesn't want these cars back and, apparently, dealers don't want them either.

This is from USA Today:

_Pablo XXXXX, a software engineer San Jose, Calif., said the lease on his BMW expires later this month and he was told a free one-month lease extension was his only option when he spoke by phone last month to a BMW dealership employee. XXXXX said he asked if BMW would reimburse him for car registration and insurance, typical costs associated with a lease extension.

The dealership employee "said BMW has nothing to do with the registration and insurance,'' recalled XXXXX, 38. "I told her in this case I didn't want an extension. She replied to me: 'Do you know we are in a pandemic? You should be less selfish and think about what's going on in the country!' "

XXXXX also provided copies of phone messages showing a BMW dealership employee asking if XXXXX would like to come to the dealership and pick out a new vehicle but later said the dealership could not take back his 2017 BMW X3 sDrive.

"There's a reason they'll take your phone call if you want to extend your lease,'' said David Bentson, who is founder and principal of Precision Automotive Group in the Chicago area and has worked in the auto industry for more than 20 years. "It's because it's in their best interest for you to hold onto that car and continue to pay for it.''

As of the first week of April, new vehicle sales were down 67% from a year ago and used-vehicle sales were down 64% from a year ago, according to Cox Automotive, the parent company of Kelley Blue Book. Plummeting sales have coincided with a drop in the value of off-lease cars, vehicles that have reached the end of their lease contract, according to industry experts.

Anthony Basich, who is managing director at carlease.com and began working in the car industry more than 20 years ago, said lease extensions give automakers and lenders time for the economy to rebound and for the leased cars to regain value before they are returned and resold.

Basich said the lease extensions are "an empty gesture because you're still paying for registration, you're still paying for your insurance and your (monthly) payment hasn't changed." (Some lenders have offered deferred payments on the leases.)

"The reality is car dealers are always just pulling crap on people and trying to get away with what they can,'' said Hal Rosner, an attorney in San Diego who represents consumers against the car industry. "It's just the nature of the business.''_

Some will find opportunities in the current circumstances. Hopefully, 'Festers will not be poorly treated or intimidated. Tragic as this all is, one person's crisis is another person's opportunity.


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## Jon Shafer (Dec 15, 2001)

There is a very simple answer as to WHY:

*The Manheim Auto Auctions are CLOSED...*

They have no way to "remarket" off-lease vehicles at the present moment, those that the dealer who takes the lease return in doesn't want to purchase.


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## namelessman (Dec 23, 2004)

1968BMW2800 said:


> As reports of offers of increased discounts from residual trickle in, we understand that BMWFS doesn't want these cars back and, apparently, dealers don't want them either.


Insurance can be non-issue as policy holder can call insurer to suspend insurance if the car is not operated.

Registration can also be done as PNO. There is still cost but much reduced.

If the car is operated(for essential stuff?), then the lessee's complaint will be groundless.


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## 1968BMW2800 (Aug 13, 2016)

Jon Shafer said:


> There is a very simple answer as to WHY:
> 
> *The Manheim Auto Auctions are CLOSED...*
> 
> They have no way to "remarket" off-lease vehicles at the present moment, those that the dealer who takes the lease return in doesn't want to purchase.


Yup. Plus there is a ton of inventory sitting on auction lots and in the pipeline. Better to give compelling offers to existing customers than to wrangle the logistics of lease returns of vehicles that are going down in value.

Of course, where does this leave reputable dealers? BMWFS starts doing what they promised not to do, selling directly to leasees at deep discounts.

Meanwhile, franchised dealers can't get new inventory and can't deliver sold cars currently in transit.

Feelin' for ya, Jon. This too shall pass.


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## 1968BMW2800 (Aug 13, 2016)

namelessman said:


> Insurance can be non-issue as policy holder can call insurer to suspend insurance if the car is not operated.
> 
> Registration can also be done as PNO. There is still cost but much reduced.
> 
> If the car is operated(for essential stuff?), then the lessee's complaint will be groundless.


But is that really the point? Would you park an uninsured leased vehicle in your garage? And how would you feel if the friendly dealer who leased you a Bimmer three years ago basically told you they can't help you now and you should be ashamed of yourself for asking to return the car?

Think of the millions BMWNA and dealers have invested in customer satisfaction initiatives...

Not good to give the customer the problem. Ever.


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## Squeak (Sep 13, 2014)

Why did you censor out his last name? The publicly published article has it front and center.


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## 1968BMW2800 (Aug 13, 2016)

Squeak said:


> Why did you censor out his last name? The publicly published article has it front and center.


Not my place. Can't help it -- the way I was raised.


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## Squeak (Sep 13, 2014)

1968BMW2800 said:


> Not my place. Can't help it -- the way I was raised.


Sorry, what does that mean? I am asking a serious question.


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## 1968BMW2800 (Aug 13, 2016)

Squeak said:


> Sorry, what does that mean? I am asking a serious question.


Sorry if I was unclear. I don't feel it's for me to reprint the individual's name as it really isn't relevant to the issues raised, whereas the professionals named in the article are adding there "expert/professional" views and, thus, I felt comfortable reprinting their names.

For some it may be a difference without a distinction, but it just seemed the right thing to do.


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## Squeak (Sep 13, 2014)

1968BMW2800 said:


> Sorry if I was unclear. I don't feel it's for me to reprint the individual's name as it really isn't relevant to the issues raised, whereas the professionals named in the article are adding there "expert/professional" views and, thus, I felt comfortable reprinting their names.
> 
> For some it may be a difference without a distinction, but it just seemed the right thing to do.


Got it. Never seen someone pull quote half an article directly, but then block out a persons name. Honestly, I thought the USA Today had done that, and I thought it was odd.


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## Jon Shafer (Dec 15, 2001)

1968BMW2800 said:


> Yup. Plus there is a ton of inventory sitting on auction lots and in the pipeline. Better to give compelling offers to existing customers than to wrangle the logistics of lease returns of vehicles that are going down in value.
> 
> Of course, where does this leave reputable dealers? BMWFS starts doing what they promised not to do, selling directly to leasees at deep discounts.
> 
> ...


Thanks. I wake up every morning now wondering if I still have a job.

We cut half the staff 3 or 4 weeks ago. Rumor has it being halved again any day now.


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## 1968BMW2800 (Aug 13, 2016)

Jon Shafer said:


> Thanks. I wake up every morning now wondering if I still have a job.
> 
> We cut half the staff 3 or 4 weeks ago. Rumor has it being halved again any day now.


We take this as it comes. Fast moving events.

As an independent broker you could still offer more compelling deals and service than most dealers, so, there's always that option.

Or go surfing for a few months and then make a triumphant return, once again. You know the drill.

Early days.


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## Ibiza (Jun 15, 2007)

1968BMW2800 said:


> "The reality is car dealers are always just pulling crap on people and trying to get away with what they can,'' said Hal Rosner, an attorney in San Diego who represents consumers against the car industry. "It's just the nature of the business.''[/I]
> .


No love loss from the litigators even during the Great Lockdown.

Thanks for sharing :thumbup:.


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## namelessman (Dec 23, 2004)

1968BMW2800 said:


> But is that really the point? Would you park an uninsured leased vehicle in your garage?


My garage has no leased vehicle, but a friend has 2(one being leased) of his 3 cars now with suspended insurance, as their household only needs one car amidst lock-down.

Under the circumstances, the request from BMWNA is not too outrageous, yes/no?


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## Jon Shafer (Dec 15, 2001)

1968BMW2800 said:


> We take this as it comes. Fast moving events.
> 
> As an independent broker you could still offer more compelling deals and service than most dealers, so, there's always that option.
> 
> ...


That's true but I am not an independent broker. I have a beautiful executive office on the 2nd floor of the dealership.
Although I am responsible for generating my own business, I punch a time clock, same as the n00bs.

.


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## 1968BMW2800 (Aug 13, 2016)

namelessman said:


> My garage has no leased vehicle, but a friend has 2(one being leased) of his 3 cars now with suspended insurance, as their household only needs one car amidst lock-down.
> 
> Under the circumstances, the request from BMWNA is not too outrageous, yes/no?


My original post was intended to point out the outrageous behavior from the BMW dealer who apparently attempted to shame the customer into being "less selfish."

Life is all about managing risk -- I would never be uninsured. I am unclear how the lease contract language regarding insurance requirements applies if the customer has not been permitted to return the vehicle at lease end. But if a car with my name on the registration is in my possession, it's insured.

I'm reminded of what my homeowners agent said to me years ago when earthquake insurance was added to our coverage. He said, "You don't have to have it. And it's not great coverage. But if the Big One hits, and you don't have coverage, you can always tell your wife, 'Okay, honey, the front of the house is gone, but the good news is I saved a few hundred bucks by not getting coverage.'"

We all manage risk differently.


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## 1968BMW2800 (Aug 13, 2016)

Jon Shafer said:


> That's true but I am not an independent broker.
> 
> .


Push comes to shove, it's an option that hopefully you won't need to exercise.

I read an article a couple of years ago about a top sales guy in the midwest who was let go during the 2008 recession. He took his large customer list with him and built an independent brokerage business and increased his income, reduced his hours, and only worked with grateful and appreciative clients who told him what they wanted to drive and, he did the rest. Apparently sales managers at dealerships of various brands were willing to pay him instead of their own sales team whenever he brought in a deal.

But, hopefully, it won't come to that for you.


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## Shiner21 (Mar 15, 2015)

So, the article in a nutshell: 

Customer: Ill bring my lease back in a month

Dealer: Keep paying another month

Customer: I don't want to extend the lease

Dealer: You are selfish

Salesperson: Come on down and pick out your next car. Wait, we can't take back your lease.

Attorney: This ain't right


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## 1968BMW2800 (Aug 13, 2016)

Shiner21 said:


> So, the article in a nutshell:
> 
> Customer: Ill bring my lease back in a month
> 
> ...


:thumbup:


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## namelessman (Dec 23, 2004)

Shiner21 said:


> So, the article in a nutshell:
> 
> Customer: Ill bring my lease back in a month
> 
> ...


The quoted text says "he was told a *free* one-month lease extension".


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## bottlecap (Jan 18, 2020)

namelessman said:


> Well given US prepares for war and famine and tornado and tsunami and earthquake but not pandemic of this scale, that says a lot about the current predicament.


We've been regularly dealing with war, famine, and natural disasters for the past 100 years, that's why we're prepared.

I hope the USA learns a lesson from this, when greed leads you to push aside your values to get in bed with something like China, this is what you get.


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## BobsM3Coupe (Nov 30, 2009)

Jon Shafer said:


> I have a beautiful executive office on the 2nd floor of the dealership.
> 
> .


Jon, did you get Pangy's office?


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## 1968BMW2800 (Aug 13, 2016)

namelessman said:


> Well given US prepares for war and famine and tornado and tsunami and earthquake but not pandemic of this scale, that says a lot about the current predicament.


I believe it was around 2005 when then President George W. Bush gave a speech asking for several billion dollars to stand up a readiness program in anticipation of pandemic. In that speech, as I recall, he described much of the circumstance we are in today.

The experts knew, preparedness steps, including recent drills and exercises, and a "playbook" were all there, as were intelligence reports many months ago alerting the administration.

The information was there, the expertise was in place.

Just as customer service awareness has been taught and advocated throughout BMW-world.

We can teach, but will they learn?


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## namelessman (Dec 23, 2004)

1968BMW2800 said:


> I believe it was around 2005 when then President George W. Bush gave a speech asking for several billion dollars to stand up a readiness program in anticipation of pandemic. In that speech, as I recall, he described much of the circumstance we are in today.
> 
> The experts knew, preparedness steps, including recent drills and exercises, and a "playbook" were all there, as were intelligence reports many months ago alerting the administration.
> 
> ...


If interested, there is an active covid19 thread in off topic sub-forum that is discussing many of the issues mentioned in your post.


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## BenF12400 (Sep 2, 2009)

I have never leased a vehicle, so I apologize if this is a naive question (I ordered a new 2020 X5 to replace my 2013 over the winter and got it just as the pandemic started). If you lease a car for, say 36 months, and you don't intend to keep it, doesn't a contract say you have to return it? Or is there some clause in the contract about natural disasters, pandemics, recessions, etc. Would like to be educated "just in case". Thanks


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## 1968BMW2800 (Aug 13, 2016)

BenF12400 said:


> ...doesn't a contract say you have to return it? Or is there some clause in the contract about natural disasters, pandemics, recessions, etc. Would like to be educated "just in case". Thanks


One of the great things about BMWFS contracts is the language, for the most part, is plain and easy to understand. I would suggest you _*take a few moments to read the contract, *_which explains in great detail insurance requirements and the various ways you can dispose of a leased vehicle.

GAP coverage is included in every BMWFS lease so any difference between actual cash value and outstanding lease balance that isn't covered by your auto insurance is covered by GAP. All covered perils in your auto policy are also covered by GAP.

Up until this last week, transferring a lease to another qualified leasee was fairly simple. Perhaps that option will become available again after the DMV systems nationwide are back up and running and BMWFS is again fully staffed.

We are, of course, in uncharted waters these days -- there is the possibility of many defaults as the economic impact of current events hits those with leases they can no longer comfortably afford. Too early to know what relief there might be, but, as a general rule, most leasing advice sources, when discussing leasing pros and cons, mention that one should only enter into a car lease if the intent is to keep the car for the entire lease term.

Lease swapping web sites are full of BMWs that, for any number of reasons, folks want to unload. Up until recent days,the system has seemed to work well.


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## 1968BMW2800 (Aug 13, 2016)

namelessman said:


> If interested, there is an active covid19 thread in off topic sub-forum that is discussing many of the issues mentioned in your post.


Thanks. I've lurked a few times. Couldn't get past the posts claiming this is overblown.


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## BenF12400 (Sep 2, 2009)

1968BMW2800 said:


> One of the great things about BMWFS contracts is the language, for the most part, is plain and easy to understand. I would suggest you _*take a few moments to read the contract, *_which explains in great detail insurance requirements and the various ways you can dispose of a leased vehicle.
> 
> GAP coverage is included in every BMWFS lease so any difference between actual cash value and outstanding lease balance that isn't covered by your auto insurance is covered by GAP. All covered perils in your auto policy are also covered by GAP.
> 
> ...


Thanks - I don't have a contract (no lease); I was just wondering if the whole purpose of the lease was that once the lease months are over, you no longer keep possession of the car because you don't really own it - it goes back to BMWFS unless you want to purchase it.


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## 1968BMW2800 (Aug 13, 2016)

​


BenF12400 said:


> Thanks - I don't have a contract (no lease); I was just wondering if the whole purpose of the lease was that once the lease months are over, you no longer keep possession of the car because you don't really own it - it goes back to BMWFS unless you want to purchase it.


Correct. You don't "own" a leased vehicle.


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## Ibiza (Jun 15, 2007)

1968BMW2800 said:


> And this from Bloomberg, though we heard it from Jon first:
> 
> "Used-vehicle auctions are for now virtually paralyzed, much like the rest of the economy. The grave concern market watchers have is that vehicles already are starting to pile up at places where buyers and sellers make and take bids on cars and trucks -- and that this imbalance will last for months.
> 
> If that fear is realized and prices plummet, it will be detrimental to automakers and their in-house lending units, which likely will have to write down the value of lease contracts that had assumed vehicles would retain greater value. Rental-car companies also will get less money from selling down their fleet of vehicles, which are sitting idle amid a global pandemic that's been catastrophic for travel."Six months from now, there will be huge, if not unprecedented, levels of wholesale supply in the market," Dale Pollak, an executive vice president of *** Automotive, which owns North America's largest auto-auction company, wrote in an open letter to auto dealers last week. "Cars are coming in, but they aren't selling. Today's huge supply of wholesale inventory suggests supplies will be even larger in the months ahead."


This is the entire Open Letter that was referred to in the Bloomberg article, which was published on April 10, 2020:

*An Open Letter to Dealers: Honest Perspective Amid the COVID-19 Crisis - Dale Pollak*

*Author's note from Dale Pollak, Executive Vice President, Cox Automotive and Founder, vAuto*: We are in a crisis that challenges everyone in the automotive ecosystem. OEMs. Financial institutions. Dealers. Suppliers. We are all in uncharted waters where there are more questions than answers. In the weeks ahead, I'll be writing and speaking about the challenges and opportunities the current crisis brings to all parts of the car business. This letter, however, focuses on the challenges and concerns franchise and independent dealers are facing as the crisis disrupts their businesses.

My heart goes out to dealers and their families during the current COVID-19 crisis.

I cannot imagine the loss, pain and uncertainty that every dealer is feeling at this time.

In my time as a dealer, we saw recessions and other disruptions that caused tough retailing conditions.

But none comes even close to what dealers are experiencing right now.

Like many of you, the Cox Automotive leadership team and I have been on the phones virtually non-stop as authorities have implemented shelter-in-place and social-distancing mandates.

We are all asking and thinking about what we should do right now to help dealers survive the current crisis and remain viable when the market returns to normal.

That's the motivation behind this letter.

As a member of the Cox Automotive leadership team, I have the advantage of access to a lot of smart people and perspectives.

We are all fully aware of our responsibility as industry leaders to do everything we can to help our dealer clients, and the car business itself, survive the current crisis.

We believe that the current crisis will bring opportunity-provided we all do the right things today to ensure we are able to take advantage of the opportunity that will arise when the market normalizes.

We also understand our limits.

If you think about the most significant dealership investments, they fall into three categories-people, inventory and facilities.

At Cox Automotive, while our solutions touch each of these investment categories, we are most directly linked to a dealer's inventory investments, and the processes that dealers employ to acquire, manage, price and market their inventories, and serve the customers who ultimately purchase this inventory from dealers.

As such, I'd like to share some perspective and guidance to help dealers better manage their inventory investments and related retail processes today to ensure a brighter tomorrow.

*It's Tough Today, But the Future Will Be Better *

Cox Automotive data suggest that, across the industry, retail sales and service volume has essentially come to a standstill in recent weeks.

Dealers certainly know it.

Across the industry, showroom traffic is down upwards of 80 percent on a year-over-year basis, the number of scheduled service appointments is off more than 50 percent, and the show rate on service appointments has dropped nearly 90 percent.

It's incredible to think of where dealers were just a few short weeks ago compared to right now.

The sheer scale and size of the business lost in recent days is scary to think about.

But there are some bright spots.

Some dealers' sales and service departments remain open, and they are selling and servicing cars in the safe and socially distant manner today's times require.

Meanwhile, other dealers can only operate "essential" sales and service functions. Other dealerships are fully shuttered.

None of us thought we'd be in this place in the second quarter of 2020.

Yet, here we are.

Thousands of dealers are already furloughing or laying off employees. Others are reducing compensation and capacity to reflect the current conditions.

It's a trying, challenging time.

But we must remember: This is the car business, and it's a cyclical business. Historically, every downturn has been followed by an upturn.

We might debate the extent to which the next upturn resembles anything like the business we all seem to have left behind just a few short weeks ago.

But such debates can be an empty exercise.

Right now, it's important for all of us to know that things will eventually get better and, if we believe this to be true, we must do everything in our power today to take advantage of the opportunity that will arrive when things do get better.

*A Persistent Question: What Do I do with My Used Inventory? *

Perhaps the most common and persistent question I hear from dealers is this: "What do I do with my used car inventory?"

Dealers arrive at this question as they weigh whether the current situation offers them an opportunity to hang on to inventory, and perhaps even acquire more, in anticipation of the time when the market improves.

When this question comes up on dealer calls, I share Cox Automotive's informed viewpoint: The market isn't likely to improve significantly in 30, 60 or even 90 days.

Some dealers are more optimistic, but the majority of those I've engaged all believe that the market's return to normal, whatever that looks like, will take some time.

To help dealers answer questions about how they should handle their used vehicle inventories, I offer three facts:

*Fact 1*: In six months, as the 2021 models arrive at dealerships from the factory, every vehicle in your inventory will be one model year older.

The model year change-over this year will likely put pressure on one- to three-year-old used vehicles as factories help dealers clear out unsold 2020 new vehicles.

*Fact 2*: Six months from now, there will be huge, if not unprecedented, levels of wholesale supply in the market.

One of Manheim's biggest tasks today is determining where and how to park the incoming streams of off-lease, rental fleet and dealer-owned used vehicles.

The pace of incoming supply exponentially exceeds the rate of sales. Physical auctions are closed and there are fewer buyers at the select online auctions that remain open.

In short, cars are coming in, but they aren't selling.

Today's huge supply of wholesale inventory suggests supplies will be even larger in the months ahead.

*Fact 3*: In six months, many of the record numbers of people who have filed for unemployment benefits in recent weeks will still be out of work. 

Even worse, it seems inevitable that more furloughs, layoffs and pay cuts are likely to come as businesses find it difficult to make payroll, even as they pursue federal and state aid programs.

Before the pandemic, industry analysts questioned how much retail demand would soften this year. We still don't know the answer, but the job losses suggest future retail demand will be weaker than previously thought.

When presented with these facts, many dealers arrive at a clear conclusion of what they should do with their current used vehicle inventory: "Sell it quickly and keep the cash."

I believe the sell-down strategy should start with the most risk-prone vehicles. Across used vehicle inventories, the late-model (2018, 2019 and 2020) vehicles represent every dealer's highest-cost, most- risky inventory investments.

The value of these vehicles today will more than likely be less tomorrow, and it'll only get worse over time.

The sell-now strategy also makes sense given another business-in-crisis reality. That is, cash is king.

It's critical for dealers to recognize what may be an unpleasant truth: It might take all the cash you can gather to sustain your business today and put it in a position to be viable when the market comes back.

*A Cautionary Note for Dealers in New Cars*

I'm watching OEMs as closely as everyone else in these trying times.

So far, it seems that factories recognize the unprecedented nature of today's COVID-19 crisis.

The factories are already taking steps to help dealers manage the costs of unsold new vehicle inventory.

Dealers also appreciate factory efforts to keep new vehicle sales moving. The rise of 0% financing for 84 months and other incentives seem about as good as they can get. 

But as we know, factories tend to offer even richer incentives as summer and fall approach.

The good news is that it appears the factory incentive programs are capturing the interest of buyers.

At Cox Automotive, we're seeing strong interest from consumers using Autotrader and Kelley Blue Book to research and shop for new vehicles compared to the traffic in dealer showrooms.

To be sure, the volume of new vehicle sales is smaller than any one of us would like to see, but there are still people interested in new cars-and some dealers who are fortunate (and safe enough) to be able to sell them.

But the problem arrives when dealers appraise a customer's trade-in as they work a new vehicle deal.

It's standard for dealers to appraise vehicles using valuation references, like vAuto's Market Days Supply, the Manheim Market Report (MMR) average, Kelley Blue Book values or some other third-party guide, to determine an appraisal amount or offer for a customer's trade-in.

In more normal circumstances, these references are reliable.

But there's a critical hitch in today's COVID-19-disrupted market.

Retail and wholesale sales have effectively fallen off a cliff in recent weeks.

The sudden shift in sales makes these valuation references less useful.

At Manheim, for example, dealers are asking why there's a large difference between MMR values and real-time auction sales prices.

Dr. Ben Flusberg, associate vice president for Manheim M LOGIC, says the gap owes to three factors:

Wholesale transaction prices have plummeted faster than ever before due to the sudden drop in retail demand.
Auction sales volumes declined, which lightens the weight the MMR gives to recent transaction activity.
The current downturn occurred in the middle of the spring season, which sent mixed trending signals to MMR.
Flusberg notes that MMR is "intentionally designed not to have a knee-jerk reaction to extremely unusual events like we're experiencing now."

He adds that MMR will normalize as the market stabilizes.

In dealerships, the valuation references can lead appraisers to value vehicles considerably higher than the true actual cash value today-a problem that will only get worse as supplies of wholesale vehicles continue to grow in the weeks and months ahead.

I've cautioned dealers that, in today's turbulent market, they are likely booking a profit on their new car transactions that will "wash out" to a loss when they eventually retail the trade-in vehicle.

To help, Manheim is now publishing a daily index adjustment, which is called MMR Retention.

Manheim is encouraging dealers to use this reference in conjunction with MMR itself to appraise vehicles and arrive at values better suited for current market conditions.

vAuto will soon release a system that alerts dealers when vehicle sales rates suddenly change, for better or worse, in the last two weeks. Such shifts indicate that a change to a vehicle's Market Days Supply is imminent. With these alerts, dealers can know the degree to which a vehicle's MDS is stable, improving, sliding or in free-fall.

In this environment, the question is whether it's wise for dealers to be doing everything they can to make a new car deal work.

My thinking is that the answer is "no."

Unless you can make the deal with a proper trade-in value, you're better off passing on the transaction.

My position flows from the fact that factories are and will continue to provide dealers financial assistance on new vehicles in the form of interest credits and ever-more incentive dollars. But, in contrast, dealers will receive no financial assistance from anyone on over-valued used vehicle inventory.

I'm not suggesting dealers should stop selling new vehicles. Rather, I'm offering a cautionary note that's meant to help dealers institute appropriate appraisal practice and review procedures that will help ensure every trade they take in reflects a realistic expectation of the vehicle's retail performance.

Today's new vehicle market conditions also call for continued vigilance on the inventory investment fundamentals dealers should be practicing every day.

It's important that dealers are able, when the factory comes calling, to offer data-informed, rational reasons why their current inventory and the local market may/may not support the introduction of more new vehicles.

Further, dealers should know the exact vehicles, down to color and trim combinations, that make the most sense to add to your inventory and those that should be retailed faster than others-a principle that applies to dealer trades, as well.

A Digital Path to Safe, Socially Distant Vehicle Sales and Service 

COVID-19 has challenged one of the fundamental beliefs about the car business-that it's a people business where in-person engagements are the only way you do business.

If you think of all the processes that underlie variable and fixed operations at dealerships, most are built on what could be called a "people business principle"-that you do business one-on-one, with the customer and the car.

For the past several years, Cox Automotive and other companies have urged dealers to redefine the concept of our people business from being one that is primarily physical and in-person, to one that includes more personalized, digitally driven engagements.

Our position has long been that, in an environment where profitability has reached a tipping point in new and used vehicles, digital technologies and tools offer a way for dealers to achieve operational efficiencies that lead to more profitable vehicle sales and service visits, and a healthier bottom line.

But you could say digital tool adoption has been split. It's far more profound in the wholesale marketplace than the retail marketplace.

At Manheim, the percentage of online auction purchases has been climbing by double-digit percentages in recent years as dealers look for more cost- and time-efficient methods to acquire inventory.

More recently, digital tools are transforming the way consignors and dealers wholesale inventory. Today, you can wholesale cars without paying to send them, and drivers or trucks, to run at auctions.

Meanwhile, on the retail side, digital technologies and tools have seen an understandably slower rate of dealer adoption.

The adoption lag owes, in part, to the pace of technology development.

My Cox Automotive colleagues and I would be the first to acknowledge that it takes more time than expected to develop the correct set of digital retailing tools and make sure they work across all the disparate systems that support a dealer's business.

Market conditions have also slowed dealer adoption of digital retail technology and tools.

I've had dozens of conversations with dealers about digital retailing.

Dealers will often stop me in mid-sentence. "That's all great, Dale, but we're selling record numbers of new and used vehicles without them."

I get it.

But I also know that while dealers have been blessed with the ability to retail record numbers of new and used vehicles in recent years, the additional volume often hasn't translated into additional profits.

In fact, we know that many dealers lose money in their new and used vehicle departments despite selling more cars.

Therein lies what may be a silver lining with COVID-19.

The crisis offers dealers an opportunity to take a hard look at their businesses that may be long overdue.

The hard look encompasses two phases:

Identifying the retail processes that have always been less efficient than you'd like and probably rub customers the wrong way.
Reinventing those processes with an eye toward using digital retailing technologies and tools to make each process more efficient, customer-friendly and profit-productive.
Some dealers made the change overnight as COVID-19 mandates made it impossible for them to sell or service vehicles in the more traditional, one-on-one manner they'd followed for years.

In the blink of an eye, these dealers took digital retailing more seriously, and continued to sell and service cars and take care of customers in a safe, socially distant manner. Autotrader notes that more than 5,000 dealers signed up for its Dealer Home Services in the first two days of their offering.

Such is the way of the car dealer in America. Put them in a corner, and they'll find a way to get out.

But it's also worth noting that digital retailing technologies and tools have come a long way.

Today, as some dealers are quickly learning, the elemental aspects of making new and used car deals can now be done digitally.

Appraising vehicles. Making trade-in offers. Knowing who's on your website and whether they're close to buying. Negotiating vehicle purchase prices and payment terms. Offering and selling F&I products and services. Digital contracting.

It's a similar story in dealer service departments, which largely remain "essential" under current state and local mandates and serve customers who really need help.

With digital tools, dealership service customers can schedule a visit, check in, review/approve work and pay without any direct, person-to-person engagement. Dealers can even use third-party services to handle vehicle pick-up and delivery for customers. (For more information on the digital and home-based services Cox Automotive provides, visit this page.)

In the heat of the COVID-19 crisis, dealers are telling me that digital tools help them manage more sales and service customers with fewer employees, and at safer distances, than they could without them.

Such anecdotes lead me to believe the current crisis may be teaching us lessons about new ways to do business that benefit both dealers and their customers.

My colleagues at Cox Automotive share this belief. That's why our companies are offering dealers access to digital retailing technologies and tools for no charge or at significantly reduced fees.

Our goal is to help you chart a better path forward, one that will help you retail and service vehicles in the more profitable, customer-focused manner that will be necessary once the market returns to normal.

*A Positive Perspective on the Future *

I realize that this letter only touches the surface of the many concerns and questions that keep dealers awake at night as the COVID-19 crisis continues.

But rather than simply losing sleep, I would encourage every dealer to reach out to your Cox Automotive partner, whether it's a performance manager, account executive or sales representative, to help you map the best next steps for your business.

As a company, we are here to help. Throughout our more than 120-year history, we have always been guided by a principle that if you take care of your customers, they will take care of you.

Our mission is no different in the current crisis than it's been since Cox Enterprises founder James M. Cox bought his first newspaper in 1898.

As you consider the next critical steps for your business, remember what the current COVID-19 crisis has already taught us-that we can and will change the way we do things once we understand the necessity of making a change.

Look around.

We are finding ways to be social even when we must remain distant.

We are discovering how digital tools can help our children learn outside of the classroom, find a grocery store that has the staples and supplies we need, and keep in touch with our families. Dealers are learning how to sell and service vehicles with fewer physical customer interactions.

In other words, the current crisis proves that we can make significant changes in our lives and businesses when circumstances demand them.

This is no small achievement.

It's also a reality that gives us great optimism and hope about our ability to face what will ultimately be a much different future.

Take a moment. Recognize how quickly we've changed beliefs and behaviors in the current crisis.

Then, let's remember how far we've come, in such a short amount of time, as we face the changes life and business will bring us in the days and weeks ahead.


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## Ibiza (Jun 15, 2007)

namelessman said:


> This may be an opportunity to re-evaluate buy-and-hold vs. serial leasing, and committed cash flow versus expected cash flow, right?


I'm still serial leasing, as my current 2018 M4 vert had a spun crank hub, and I don't want to be out of warranty come September. I expect that the lease payment for the 2020 M4 vert will be lower than 2018 M4 due to: 1) No ED modifier; 2) Recent reduction of interest rates; 3) Incentives will be greater by taking US delivery than the 5% ED discount; 4) Recent BMW FS residuals are higher than 2017.

Ordered vehicle has same options except $1900 individual paint drops to $550 metallic paint, and adding PIA M performance exhaust that is residualized in the lease payment.


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## 1968BMW2800 (Aug 13, 2016)

Very informative Ibiza. Thank you for posting it.


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## quackbury (Dec 17, 2005)

Yes, very informative. Though I wish the author's 10th grade English teacher had encouraged him to write in paragraphs more than one sentence in length...

Regarding the never ending lease vs. buy debate: Maybe it's colored by confirmation bias, but the letter reminds me of why I am a leaser. Imagine needing a new car today, and trying to trace in your current whip? And being offered a trade in value that may be "real world" but is thousands and thousands less than what you'be been anticipating from Blue Book, Black Book, etc.? Instead of a 2020 or 2021, that buyer may be forced into a pre-owned 2018 or 2019 instead. As a serial leaser, I don't have to worry about the value of my trade, and I am in a far better negotiating position as a result.

Crazy times.


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## 1968BMW2800 (Aug 13, 2016)

quackbury said:


> Yes, very informative. Though I wish the author's 10th grade English teacher had encouraged him to write in paragraphs more than one sentence in length...
> 
> Regarding the never ending lease vs. buy debate: Maybe it's colored by confirmation bias, but the letter reminds me of why I am a leaser. Imagine needing a new car today, and trying to trace in your current whip? And being offered a trade in value that may be "real world" but is thousands and thousands less than what you'be been anticipating from Blue Book, Black Book, etc.? Instead of a 2020 or 2021, that buyer may be forced into a pre-owned 2018 or 2019 instead. As a serial leaser, I don't have to worry about the value of my trade, and I am in a far better negotiating position as a result.
> 
> Crazy times.


:thumbup:

Quack gets a call around May 1 telling him his shiny new 2020 5 series is finally at the dealer and ready to be delivered.

Quack says, "Cool......... let's talk numbers."

Dealer says, "Good news. Despite the delivery delay, the numbers haven't changed, except the incentive increased and the money factor dropped so we'll be pleased to adjust your lease to reflect those changes."

Quack, "Thanks. That's great..... for starters."

And out comes the grinder, courteously applied, without mercy!!

We assume that in a few months there will be more incentives -- maybe even cash for clunkers on steroids.

The cool thing about paying the opportunity cost to lease is, well, it's just cool to sniff that New Car Smell.

Do the deal, Quack. Or buy a CPO 2019 in about 3 months for peanuts. But it won't smell as good and you won't be happy.

And you're sooo much more courteous when you're happy.


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## ard (Jul 1, 2009)

quackbury said:


> Yes, very informative. Though I wish the author's 10th grade English teacher had encouraged him to write in paragraphs more than one sentence in length...
> 
> Regarding the never ending lease vs. buy debate: Maybe it's colored by confirmation bias, but the letter reminds me of why I am a leaser. Imagine needing a new car today, and trying to trace in your current whip? And being offered a trade in value that may be "real world" but is thousands and thousands less than what you'be been anticipating from Blue Book, Black Book, etc.? Instead of a 2020 or 2021, that buyer may be forced into a pre-owned 2018 or 2019 instead. As a serial leaser, I don't have to worry about the value of my trade, and I am in a far better negotiating position as a result.
> 
> Crazy times.


If you are not a leaser- but rather a ***8216;buyer***8217;, why would you ***8220;need***8221; a new car today? Or this month? Or before December?

When you lease, the lease itself creates this ***8216;need***8217;. When you buy, such a need is under your control.

I mean it *is* the reason manufactures love, need, push, subsidize leases.

:angel:
(Speaking of the never ending debate...)

I***8217;d also point out that it is only still-employed leasees that enjoy that position of power.... picking up a new lease while unemployed has its own challenges. Although come to think of it, buying a lease end car w a 4K, 6k discount is a good way to jump off the lease-train


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## Doug Huffman (Apr 25, 2015)

Good to see you ARD.

One *leases* an appliance, like a chichi Zero Degree refrigerator, always there, ready to go, not ***8216;my***8217; responsibility. One *buys* an investment in expected value appreciation, intrinsic (me) or extrinsic (the collector).


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## 1968BMW2800 (Aug 13, 2016)

ard said:


> If you are not a leaser- but rather a 'buyer', why would you "need" a new car today? Or this month? Or before December?
> 
> When you lease, the lease itself creates this 'need'.


Correct. "Need" that New Car Smell fix. Never have denied it. It's why I never tried heroin. Knew I'd like it.

But I'm tellin' ya this.... in a few months those who are smart and buy the gently used/near new vehicles us lease junkies have burned the depreciation off of will do very very well, IMHO. Too many seats chasing too few but$s.

I consider my sacrifice a service to humanity.


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## 1968BMW2800 (Aug 13, 2016)

Doug Huffman said:


> Good to see you ARD.
> 
> One *leases* an appliance, like a chichi Zero Degree refrigerator...


You mean I coulda been leasing my fridge all these years??? Who knew?


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## Doug Huffman (Apr 25, 2015)

1968BMW2800 said:


> You mean I coulda been leasing my fridge all these years??? Who knew?


No Aarons Rent To Buy in your area?

My commodity refrigerator - I have no idea of the brand - is over 30 years old and I haven***8217;t touched it. I have repaired my stove-oven, dishwasher (x3) and dryer. I restored my Water conditioner from junk.


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## ard (Jul 1, 2009)

1968BMW2800 said:


> Correct. "Need" that New Car Smell fix. Never have denied it. It's why I never tried heroin. Knew I'd like it.
> 
> But I'm tellin' ya this.... in a few months those who are smart and buy the gently used/near new vehicles us lease junkies have burned the depreciation off of will do very very well, IMHO. Too many seats chasing too few but$s.
> 
> I consider my sacrifice a service to humanity.


More heroin bashing????


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## quackbury (Dec 17, 2005)

ard said:


> If you are not a leaser- but rather a 'buyer', why would you "need" a new car today? Or this month? Or before December?


Because a texting millennial ran a stop sign and T-boned you?

Because your car was stolen, flooded, of had a tree land on it?

Because your indy just told you that your F10 550 is going to need a new motor and the CCP program no longer applies?

Because your wife is 8 months pregnant and you need to get out of your Z4? Or she refuses to wrestle the car seat in and out of the back seat in your 430 Coupe? Or you just found out she's having twins, you have 2 other kids, and now you need that 3rd row?

There could be lots of reasons. Capice?


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## ard (Jul 1, 2009)

quackbury said:


> Because a texting millennial ran a stop sign and T-boned you?
> 
> Because your car was stolen, flooded, of had a tree land on it?
> 
> ...


capish.

I thought your example was in the context of trade in values....


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## namelessman (Dec 23, 2004)

quackbury said:


> Because a texting millennial ran a stop sign and T-boned you?
> 
> Because your car was stolen, flooded, of had a tree land on it?
> 
> ...


Of course not capiche, these are all made-up reasons with varying probability that forces a purchase, while lease end at 3-year mark(or earlier if lease assumed,pulled ahead, or later if lease extended, etc etc) is 100% certainty.


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## SteveinArizona (Sep 12, 2016)

quackbury said:


> Yes, very informative. Though I wish the author's 10th grade English teacher had encouraged him to write in paragraphs more than one sentence in length...
> 
> Regarding the never ending lease vs. buy debate: Maybe it's colored by confirmation bias, but the letter reminds me of why I am a leaser. Imagine needing a new car today, and trying to trace in your current whip? And being offered a trade in value that may be "real world" but is thousands and thousands less than what you'be been anticipating from Blue Book, Black Book, etc.? Instead of a 2020 or 2021, that buyer may be forced into a pre-owned 2018 or 2019 instead. As a serial leaser, I don't have to worry about the value of my trade, and I am in a far better negotiating position as a result.
> 
> Crazy times.


Je n'ai fait celle-ci plus longue que parce que je n'ai pas eu le loisir de la faire plus courte.


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## gkr778 (Feb 8, 2013)

1968BMW2800 said:


> Correct. "Need" that New Car Smell fix. Never have denied it. It's why I never tried heroin. Knew I'd like it.
> 
> But I'm tellin' ya this.... in a few months those who are smart and buy the gently used/near new vehicles us lease junkies have burned the depreciation off of will do very very well, IMHO. Too many seats chasing too few but$s.
> 
> I consider my sacrifice a service to humanity.


Thank you for your sacrifice, 1968BMW2800. I am planning to get a 2-5 year old used car for my wife in the next few months. :thumbup:

Expensive as it is, the long term cost of leasing new cars is probably much lower than that associated with a heroin addiction.


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## 1968BMW2800 (Aug 13, 2016)

SteveinArizona said:


> Je n'ai fait celle-ci plus longue que parce que je n'ai pas eu le loisir de la faire plus courte.


La brièveté est l'essence de l'esprit


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## SteveinArizona (Sep 12, 2016)

1968BMW2800 said:


> La brièveté est l'essence de l'esprit


exactly


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## 1968BMW2800 (Aug 13, 2016)

gkr778 said:


> Thank you for your sacrifice, 1968BMW2800. I am planning to get a 2-5 year old used car for my wife in the next few months. :thumbup:


My pleasure. We salute the other thousands who lease so others may purchase our well-loved lease returns at what will soon be very low prices.

The BEST deal I ever got was a custom built brass hat with 3Kmiles on the clock-- never registered and eligible for lease. Tons of factory cash loaded into the deal, signed the papers on the last day of the month, last day of the quarter, last day of the dealer's fiscal year. $90+K Jag coupe, zero driveoffs, 18K miles/year, 2 years, and the CPO I had purchased a few years prior at a great price was turned in with sufficient equity to cover the 2 years of lease payments. So, in my junkie mind, that Jag lease was FREE That's how New Car Smell addicts rationalize everything. It's a beautiful way to live. All rainbows and lollipops in an otherwise very broken world.

Keep washing your hands everyone.


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## 1968BMW2800 (Aug 13, 2016)

SteveinArizona said:


> exactly


Touche!!


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## namelessman (Dec 23, 2004)

gkr778 said:


> Expensive as it is, the long term cost of leasing new cars is probably much lower than that associated with a heroin addiction.


Talking about expensive, the past month of shelter in place has unearthed seldomly discussed addiction.

E.g. haircuts andsalon visits now look expensive after our household discovered $20-$30 hair trimmers and prof scissor sets and free utube videos that can save $$$$$. :thumbup:


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## gkr778 (Feb 8, 2013)

namelessman said:


> E.g. haircuts andsalon visits now look expensive after our household discovered $20-$30 hair trimmers and prof scissor sets and free utube videos that can save $$$$$. :thumbup:


Excellent example namelessman! 19 years ago, I spent $17 to purchase a Wahl home haircutting kit similar to this:










With proper maintenance including blade sharpening, cleaning, and disinfecting, the Wahl clipper and accessories are still going strong today! That's nearly two decades in which I haven't visited a barbershop or salon. Maybe Autoputzer can get a spreadsheet ready to calculate the NPV on this investment. 

My wife, son, and daughter have been on board with the DIY approach to haircuts, too. :thumbup:

OK, back to our regularly scheduled discussion of BMWFS' lease return predicament.


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## Shiner21 (Mar 15, 2015)

Anybody been down to the local Manheim lot to see if they are stacking cars on top of each other?


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## 1968BMW2800 (Aug 13, 2016)

Shiner21 said:


> Anybody been down to the local Manheim lot to see if they are stacking cars on top of each other?


They solved the Manheim problem by having dealers shame their customers into not turning cars in at lease end. I'm sure there will be a Harvard Business School case study on it: "How to invest $50 billion on customer satisfaction and then nullify decade's worth of gains in two weeks" That should be worthy of an MBA.

As for hair cutting -- I'm thinkin' it's time to re-grow the ponytail I had back in the days when I was making out in Mom's 1968 BMW 2800. Don't have the car or the ponytail anymore, but at least I still have hair, silver though it is.


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## gkr778 (Feb 8, 2013)

Shiner21 said:


> Anybody been down to the local Manheim lot to see if they are stacking cars on top of each other?


The Manheim locations in Nashville and Hattiesburg are still accepting inbound inventory. Buy and sell transactions are being done via Simulcast. Same situation with the ADESA location in Memphis.


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## jjrandorin (May 8, 2013)

1968BMW2800 said:


> Very informative Ibiza. Thank you for posting it.


+100

Thanks @Ibiza for sharing that very informative letter.



quackbury said:


> Actually a little surprised at that. I'm guessing your store has under 500 employees - I wonder why the principal didn't just apply for a PPP loan?
> 
> *Whoa! After all these years we finally learn that normally mild-mannered jj (second in politeness only to 1968BMW2800) has a testy side? Who knew?*
> 
> ...


Lol!

In actuality, I go out of my way to be polite, both online, and in person. One reason for that is, there are still people on this planet (although much fewer) who still believe for some reason that a 6' 2" "African American Male" is not able to communicate effectively. In actuality though, I have as much of a temper as the next person... i am certainly no saint, and my wife always ends up saying "language!" when I am sitting there watching my favorite sports teams screw up... or talking about people doing stupid things (lmao)

I dont let myself get pushed around, but I believe that 1968 and I likely went to the same etiquette school (LMAO). On a side note, I am a throwback in a few different ways I think. I married my high school sweetheart at 18 years old (and moved out of the house then), while working 2 minimum wage jobs trying to "make it" with her and I. Tried to go to college while working both those jobs, and something had to give (it was college, because we needed money to live). Now, in my early 50s, we are still together (I feel lucky to have found my soulmate so young...she doesnt mind my desire for nice cars, and let me build the Home theater system of my dreams in our family room, complete with 85 inch TV and 7.3.4 Dolby Atmos, LOL). I work in IT, one of the few fields someone my age back then could get into without a degree and make decent money.... but I didnt start there, for sure.

Anyway, enough of my backstory, lol...

Back on thread topic,

The interesting (and scary for dealers) thing is, at least in my opinion, that Not only are there a ton of people out of work (and many of those jobs may not come back), but that even people who "can afford it" are either holding off, or considering holding off. @quack, I dont think you are alone in that thinking at all. This was the year we were going to redo the flooring in our home downstairs, and I am now not going to do it. Most things I pay in cash, except my mortgage, and of course the leased car (I bought the model 3 performance in 2018 though). So, there is both a glut of people who now can not afford to get new cars that were going to, AND many of the people who can afford to get new cars are now contemplating holding off, just because they want to see where all this is going. We are in for a bumpy 6-18 months or so, in my opinion.

Poor customer service like detailed in the opening post by @1968 is not going to help. Having spent most of my working adult life either performing customer service, managing people who perform customer service, or both, it takes forever to build up good will with people but it gets destroyed VERY quickly. There was obviously a much better way for that customer service person to deliver the same message rather than "Stop being selfish, keep your BMW for an extra month and pay those registration fees, its for the country!"

I also dont get the whole "but you could file PNO on the vehicle" argument at all, because, even easier than going through paperwork to file PNO on a vehicle that you then legally couldnt drive, it would be more simple to simply, you know, turn the car back in, fulfilling ones obligation on it. Because of my working background, I am fairly sure how this happened, though. Whoever the customer service persons manager is, probably said something like "Team, we really need to do all we can to get people to hang onto those lease returns. I am authorizing you all to even give them a free month to extend. Do everything you can to get them to take it, we have to push this off as much as we can". Something like that can easily translate to "desperation" for front line phone support workers, which is what that quote sounds like (a desperate person).

Even the "deals" some are reporting right now on lease returns (6k off?) to get vehicles closer to auction pricing / actual value, are only getting them close to that actual value as it is right NOW. No telling what the car will be worth 6 months from now. With that being said, you really only realize the depreciation when you sell the car, so if a person is actually going to keep it, then it kind of doesnt matter in my book. Most cars depreciate to almost zero anyway, given enough time. Its expensive to get a new car every 3-4 years no matter how one does it, IF that is the goal (a new car every 3-4 years).

No matter what, however, the car business is going to look VERY different, likely forever, because of this. Car salespeople like Jon and Greg have been the outliers... most dealers still want you to "come down for our best deals, lets negotiate in person". Those days are GONE, likely forever (and good riddance). Very few "liked" them , and younger people dont like them so much that entire companies have sprung up so that people dont have to go through that process (Vroom, Carvana). Just like employers will no longer be able to easily argue why they need "buts in seats" when their workers start saying " I want to work 2 days a week from home" when this is all over, any car dealer who sticks with "come on into the dealership, lets discuss it in person to get my best price" will... not... last... in the aftermath of all this. People simply wont tolerate it for new car sales. Even used car sales will be more like "pick it up, you get 3-4 days to return it" like a pair of pants, rather than the high stakes "take it or leave it, there is no cooling off period" they are now.

The car dealers who are going to survive are going to have to differentiate on something other than price, because there will be no difference on price... and people will be shopping for cars from home for the foreseeable future.

(posts like this is what happens when I wake up and cant sleep, lol)


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## BenF12400 (Sep 2, 2009)

Well, the letter from the Cox executive was very informative. We all understand the hardships in running any business, much, much worse now. But nothing in that letter seems to address the the customers' concerns or needs.


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## 1968BMW2800 (Aug 13, 2016)

BenF12400 said:


> Well, the letter from the Cox executive was very informative. We all understand the hardships in running any business, much, much worse now. But nothing in that letter seems to address the the customers' concerns or needs.


Yup. BIG MISTAKE, IMHO.

Decades ago my wife opened a small retail art gallery. One of my wealthiest relatives attended the grand opening. He pulled us aside, commented on the good turnout for the opening, and then gave us one piece of advice: "For the first year, don't worry about making any money. Just give the best customer service you can. Make every decision based on how it will improve your customers' experience and the money will follow." We did, and he was proved to be right.

In the Cox letter, we are all understanding how they're up against it. What I was looking for is an exploration of the opportunity this crisis presents to deliver the best possible customer experience to beleaguered customers -- both the wholesale customers and, ultimately, the retail buyers and lease returnees.

Anticipating and solving customer problems turns ugly circumstances into delightful experiences, and, in my experience, breeds customer loyalty and repeat business.

Sticking folks with 84 month interest-free loans on cars they can't afford and in which they will be upside down for almost the entire period is not good customer service. Yet many manufacturers are doing just this in the name of customer support.

Failing to have a network-wide, customer-friendly solution in place when dealers shut the door on lease returns is just...plain...stupid.

You know the Mothership was caught flatfooted when an exec from BMWNA starts his response with, "Our dealers are independent businesses..." Yeah, independent businesses who are required to get everything from the marble on the floors to the urinals approved by BMWNA. If that guy had been to my training, he would have said, "We have apologized to the valued customer who was given incorrect lease return guidance by one of our dealers. We have reached out to both the customer and the dealer and are confident things will be made right and we are taking steps system-wide to make sure all of our dealers have the resources required to meet the needs of all of our valued BMW owners and leasees. We're in this together..."

But, hey, as jj said, we went to etiquette school. :angel:

Maybe, as jj suggests, this mess will result in an improvement of the vehicle acquisition process for everyone. Maybe.


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## quackbury (Dec 17, 2005)

I expect we are in for a MASSIVE paradigm shift in a whole lot of areas. Many, many industries will be re-imagined.

I shivered in my dorm room during the 1973 oil crisis. In 1978, I thanked my lucky stars I was driving a 204Z instead of the Chryslers of my youth; yes, I waited in gas lines, but far less often than if I'd been in Detroit iron. Never in my wildest dreams did I EVER think I'd see oil futures go negative. And the timing couldn't be worse, coming into the summer when there will be no demand for home heating fuel to soak up production. That is going to have a massive impact on our economy, and probably also the political stability of the Middle East, Sunni and Shiite alike.

Speaking of the auto industry: I don't really NEED $140,000 of BMW's (leased or otherwise) sitting in my garage, hardly being driven. (I have bought gas ONCE in the last month, and you're probably all in the same boat). Will the current mobility system be upended by some brilliant entrepreneur who finds a way to send a driverless car to my home or office within 5 minutes of my pushing a button, to whisk me away to where ever I need to go, with less waste and less capital investment? If they can do it in Westworld, why not here? (There's a lot more traffic on the streets of Westworld right now than on the streets of Boston).

And will I even be commuting to work? If so, will mu private corner office that's been sitting empty for a month morph into a cube, that is "mine" one or two days a week, and "belongs" to co-workers on the other days? WFH is going to have a massive impact on commercial real estate firms. Even the Morgan Stanleys of the world are saying they won't need their FA's in the office daily when this is over. Cushman & Wakefield and their like are in for a very choppy ride.

Who's going back to Planet Fitness when this is over? Folks like my daughter are going to continue riding their newly-purchased Pelotons rather than going to SoulCycle.

Will Disney and fellow theme parks operators ever recover? Or will Orlando be a ghost town in 20 years?

Hopefully, the USA and other countries have learned their lesson, and will no longer be relying on a global supply chain for mission critical products. We'll have a new wave of American Manufacturing (led by robotics). EU nations will follow suit. All of which will put economic pressure on China, and maybe kill nascent industries in Vietnam and other Emerging Markets nations.

Geopolitical crises will increase. The collapse of the oil market will have a profound impact on Putin, the Ayatollahs, the House of Saud, and the Emirates. Modli's draconian measures may cause a Muslim revolt in India. What happens if Pakistan takes the opportunity to pile on? What is Xi's future? Will his mishandling of the pandemic, his crackdown on protesters and the end of China's economic growth see him replaced? Or will China become even more totalitarian? What will the cartels do? The pandemic has to be as bad for their business as it is for legitimate business. (And there's been eerie silence since POTUS announced he was sending the US Military after the cartels. How is that playing out while we're all distracted by the pandemic and the attendant constant Trump-bashing?)

Deflationary times are terra incognito for the US. (While I was sitting in those Carter-era gas lines, my dad was buying 14% muni's). This morning I saw a projection of a 0.4% inflation rate for the next 5 years. What are the ramifications of that? How does it affect the housing market? Will Millennials conclude that home ownership is no longer a viable way to build wealth? Or if I am spending more time in my home now because it's also my office, and I want to make some home improvements, will I do those now? Or figure that new roof will cost 25% less if I wait 6 months?

How fitting that it was the Chinese who derived the curse "May you live in interesting times."


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## Doug Huffman (Apr 25, 2015)

Hmm, thanks, I always thought it Amerindian. The nearest related Chinese expression is ***23527;***29234;***22826;***24179;***29356;,***33707;***20570;***20098;***38626;***20154;; which is usually translated as "Better to be a dog during peacetime, than a human in times of war."


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## SteveinArizona (Sep 12, 2016)

quackbury said:


> I expect we are in for a MASSIVE paradigm shift in a whole lot of areas. Many, many industries will be re-imagined.
> 
> I shivered in my dorm room during the 1973 oil crisis. In 1978, I thanked my lucky stars I was driving a 204Z instead of the Chryslers of my youth; yes, I waited in gas lines, but far less often than if I'd been in Detroit iron. Never in my wildest dreams did I EVER think I'd see oil futures go negative. And the timing couldn't be worse, coming into the summer when there will be no demand for home heating fuel to soak up production. That is going to have a massive impact on our economy, and probably also the political stability of the Middle East, Sunni and Shiite alike.
> 
> ...


You are so right. For further example, on a golf course I have always rode in a cart but walked a lot of holes while my partner drove. Now, we are one to a cart. So I ordered an electric remote control push cart. Now I will likely be using that, rather than a riding cart, i n the future.

I was already mostly virtual at work, now I will be even more so.


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