E90Post
 


European Auto Source
 
BMW 3-Series (E90 E92) Forum > BMW E90/E92/E93 3-series General Forums > New & Preowned BMW Ordering / Pricing / Tracking Information Forum (including European Delivery) > Dealership's deceptive practices - Is this legal?



Reply
 
Thread Tools Search this Thread
      06-07-2009, 11:34 AM   #1
dvn
Lieutenant
 
dvn's Avatar
 
Drives: 2010 BMW M3 Coupe
Join Date: May 2007
Location: Seattle, WA

Posts: 409
iTrader: (4)

Dealership's deceptive practices - Is this legal?

I've been in contact with a local BMW Dealership for a couple of months trying to work out the specifics on selling my 335i and buying an M3. I've been in to the dealership several times and I have all of our conversations logged in email. We've comed to agree on pricing and dates for the sale and the order of each car.

The deal was that I find a buyer, bring him in when he was ready to buy, and sell my car to the buyer "through" the dealership. They call this a pass-through and doing this would save me from paying tax on the sale price of my old car when I place an order for my new car. Sounds good so far.

So the pricing for the car is as follows: I would pay a $500 fee for the pass-through service and I would order the M3 for $1400 over invoice.

I get there last Friday, and after standing around for over an hour I am taken into my CA's office and he tells me "Well, I talked to my manager and he said we couldn't do the pass-through for $500. But we will do the pass through for $1000 and sell the car to you for $900 over invoice". He even admitted that this was to in hopes to guarantee that I would buy from them.

So after all is said and done the amount I pay will be the same but what bothers me is now, if for any reason, I decide against ordering through them I've lost another $500 which I shouldn't have to sacrifice as that was not part of the original agreement.

My question is, they offered me a deal at set prices and modify the arrangement when it comes to signing papers. Is this legal? Is there anything that I can do about this after the fact?
dvn is offline  
0
Reply With Quote
      06-07-2009, 03:04 PM   #2
nukezero
Major
 
Drives: '09 335I Cpe
Join Date: Sep 2008
Location: Sunny Socal

Posts: 1,176
iTrader: (4)

bait and switch. technically, they didn't sign an agreement yet.
__________________
2009 335i 6MT - M-Sport - All stock
nukezero is offline   United_States
0
Reply With Quote
      06-07-2009, 03:06 PM   #3
kgb1637
Lieutenant Colonel
 
kgb1637's Avatar
 
Drives: F30 (on its way)
Join Date: Sep 2008
Location: Baltimore, MD

Posts: 1,519
iTrader: (0)

Ahhhh stealerships.
__________________
Retired - '08 E90 335i Sparkling Graphite/Gray Dakota Leather, ZSP, ZCW, ZPP, Navi, ipod, Sat
kgb1637 is offline   United Kingdom
0
Reply With Quote
      06-07-2009, 03:27 PM   #4
iAerodynamic
Colonel
 
iAerodynamic's Avatar
 
Drives: 325i
Join Date: Oct 2008
Location: San Marino, CA

Posts: 2,182
iTrader: (31)

Garage List
2006 325i  [0.00]
stealership.
iAerodynamic is offline   Taiwan
0
Reply With Quote
      06-07-2009, 05:12 PM   #5
jpsum
Major
 
jpsum's Avatar
 
Drives: 2010 TSX
Join Date: Dec 2008
Location: New Haven area

Posts: 1,089
iTrader: (4)

I thought verbal agreement is considered a binding agreement. If you can prove it with your emails or have witnesses, you might have a case. But then again, that Yomama guy might prove me wrong.
jpsum is offline   United_States
0
Reply With Quote
      06-07-2009, 05:59 PM   #6
dvn
Lieutenant
 
dvn's Avatar
 
Drives: 2010 BMW M3 Coupe
Join Date: May 2007
Location: Seattle, WA

Posts: 409
iTrader: (4)

Quote:
Originally Posted by jpsum View Post
I thought verbal agreement is considered a binding agreement. If you can prove it with your emails or have witnesses, you might have a case. But then again, that Yomama guy might prove me wrong.
That's what I thought...

Does anyone think that BMW N/A would do anything about it? Or would I just be shooting myself in the foot when it comes time to ordering?
dvn is offline  
0
Reply With Quote
      06-07-2009, 11:15 PM   #7
JoeyBananaz18
Brigadier General
 
JoeyBananaz18's Avatar
 
Drives: metrocard
Join Date: May 2009
Location: Whitestone, NY

Posts: 3,636
iTrader: (2)

is the pass through fee profit on their end or does that money go to BMWNA? also, if this didnt arise would you buy your car from some other dealer? beacuse if not, and the fee is not going to BMWNA, i dont really see how this would bother me. then again iv never gone through something like this before so i most likely dont know the ins and outs.
JoeyBananaz18 is offline  
0
Reply With Quote
      06-08-2009, 08:52 AM   #8
chumley
Captain
 
chumley's Avatar
 
Drives: 2009 335
Join Date: May 2009
Location: Naples, FL

Posts: 696
iTrader: (1)

I must just be stupid or something. I read this 3 times and I still don't "get it"!

You said - "They call this a pass-through and doing this would save me from paying tax on the sale price of my old car when I place an order for my new car." I assume you mean that they somehow are applying the sale price you arrange as a reduction of the new car's purchase price? If so, I would think the only legal way this would work is when it came down to it, for the purposes of the new car sale, it would show up as a trade-in or discount. I don't see how they can write up a bill of sale for $50k with no trade and you not have tax liability on the new car.

Assuming there's no issue there, what are you really doing? The dealer is charging you (now $1000) to prearrange a sale with someone. Is this because the person you are selling it to is willing to pay you > $1,000 more than the dealer would give you in trade?

Bottom line - The only way it should matter to you is if you realistically expect to sell your car through this "pass through" and NOT buy a new one from the dealer. If this is the case why would you want to involve the dealer in the first place and pay them anything? Just sell it to your buyer and keep the $1,000.

If the buyer of your old car is getting something out of it, like a warranty, I can understand why the dealer wouldn't want to bother for $500 unless they were sure you were buying a car. They could argue, just as you are, that the pass through was contingent on you buying a new car, not as a service to you.
chumley is offline  
0
Reply With Quote
      06-08-2009, 11:26 AM   #9
dvn
Lieutenant
 
dvn's Avatar
 
Drives: 2010 BMW M3 Coupe
Join Date: May 2007
Location: Seattle, WA

Posts: 409
iTrader: (4)

Joey and Chumley,

You are both correct.

I was responsible for finding a buyer, I would then sell the car to the dealership and they would sell it to the new owner for the same price minus the $500 fee. This would done as a trade-in so I would only have to pay tax on the difference of the new cars sale price. The $500 (now $1000) fee comes out of my pocket and I am confident they would keep the fee as profit.

I am planning on purchasing my M3 from them, otherwise I wouldn't have agreed to pay the $500 (now $1000) but what bothers me is that we had a written agreement that they changed at the last minute when I was ready to sell my car and the buyer was waiting to sign papers.

My biggest concern is what is to keep them from doing it again when it comes time to order my new car? This time around I don't have it in writing that they'll sell me the car for $500 less due to the change in the trade-in fee agreement...
dvn is offline  
0
Reply With Quote
      06-08-2009, 12:00 PM   #10
virtualbong
Major
 
virtualbong's Avatar
 
Drives: 2007 E92 328xi
Join Date: Jun 2009
Location: Boston, MA

Posts: 1,477
iTrader: (2)

I don't think you have any case here. Nothing was signed and no transaction occurred. Now, if you had sold the car first through the dealership and then they pulled the whole $1000 instead of $500 charge pass through fee...then you would have a valid argument.

*** UPDATE ***
Hold on, I just read your last post...you had a written agreement for the $500 pass through fee? If so, that is shady stuff and you should just walk right there. Go to another dealership and they will probably match that deal since they know it's a guaranteed deal.
__________________
2007 e92 328xi (Jet Black)
virtualbong is offline  
0
Reply With Quote
      06-08-2009, 04:08 PM   #11
chumley
Captain
 
chumley's Avatar
 
Drives: 2009 335
Join Date: May 2009
Location: Naples, FL

Posts: 696
iTrader: (1)

Quote:
Originally Posted by dvn View Post
Joey and Chumley,

You are both correct.

I was responsible for finding a buyer, I would then sell the car to the dealership and they would sell it to the new owner for the same price minus the $500 fee. This would done as a trade-in so I would only have to pay tax on the difference of the new cars sale price. The $500 (now $1000) fee comes out of my pocket and I am confident they would keep the fee as profit.

I am planning on purchasing my M3 from them, otherwise I wouldn't have agreed to pay the $500 (now $1000) but what bothers me is that we had a written agreement that they changed at the last minute when I was ready to sell my car and the buyer was waiting to sign papers.

My biggest concern is what is to keep them from doing it again when it comes time to order my new car? This time around I don't have it in writing that they'll sell me the car for $500 less due to the change in the trade-in fee agreement...
Ya, I would be concerned too. I would get something in writing or something signed by a sales manager. Better yet, since I would assume this would all have to happen together or nearly at the same time, just do the deal, have them write it up and be done with it.

If you arrange the sale, pay them, then wait instead of buying/ordering your car without a deposit or something written up they could screw you. Kinda back to my point though - I don't see how you even have the option of waiting or not doing some deal with them. I would think you can't take the money from the sale or the whole tax avoidance is ruined. If you wait, what happens to the money?

Also - I don't know the specifics of your car, but what are you really saving? If you car is worth 30K and tax rate is 6%, you're talking about saving 1800 in taxes that will cost you 1000. You're adding alot of variables and complexity to save maybe 1000? 1200? whatever the number is. What if your buyer wigs out? What if he needs to be financed and can't get financed? Unless you really know the buyer, I wouldn't complicate the purchase of a 60-70k car with this.
chumley is offline  
0
Reply With Quote
      06-08-2009, 04:51 PM   #12
dvn
Lieutenant
 
dvn's Avatar
 
Drives: 2010 BMW M3 Coupe
Join Date: May 2007
Location: Seattle, WA

Posts: 409
iTrader: (4)

The sale of my 335i already went through. We originally agreed on the $500 trade-in fee and a price of $1400 over invoice when I order an M3 (July 25th). As long as you complete both transactions in the same calendar year, you will get the trade-in tax break.

I met the buyer at the dealership and waited around for an hour. Right before I went to go sign for the sale of my car the client advisor says "So my manager and I had a miscommunication and we will not be able to do the trade-in for $500 over but we will sell you the M3 for $900 over invoice instead of $1400." I agreed at the time but I told him on the spot that changing the deal at the last moment was deceptive, etc. He wouldn't even look me in the eye.

I sold the car for $31,300 (minus the $1000) and my tax rate is 9.8% so I would avoid paying $2920.40 on tax when I order my new car which is a pretty significant amount.

Anyway, I sent an email to my client adviser this morning letting him know how my experience just went from being positive to negative and that I probably won't rate him very well when it comes time to it; suggesting that he find some way to fix the problem. If, for some reason, they decide not to honor the sale agreement then I'll definitely be looking at small claims for at the very least. I guess only time will tell.
dvn is offline  
0
Reply With Quote
      06-12-2009, 12:17 PM   #13
AJ 335TT
Lieutenant
 
Drives: 2008 e92 335Xi
Join Date: Sep 2006
Location: Seattle WA

Posts: 452
iTrader: (0)

Did you already sell the car? I tried to do the same thing last year and BMW Bellevue pissed me off so bad that I picked up my car and traded it in at BMW of Yakima instead. If you havent sold the car yet shoot me a PM, Yakima BMW will give you a great deal on the new M3 and do the pass through for 500.
__________________
2008 e92 335xi 6mt, Montego Blue, Jade Grey, Grey Poplar, Sport, Cold Weather, Comfort Access, KW V3s, M3 spoiler, 35% tint, 3M clear bra, GP Thunder H8
2007 E92 335i*
2003 E46 330Ci*
1994 Ford Probe SE* *Retired
AJ 335TT is offline  
0
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -5. The time now is 04:45 PM.




e90post
Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST