[downstrung]

I have been having a most bizarre experience with purchasing a BMW. I went to dealership A two weeks ago, inquiring about a 335i. We talked for a while, drove the car, ran some numbers, then I headed out. The following week I went to dealership B, also inquiring about a 335i and checking their availability and pricing. Later that week I went back to dealership B because they found a car that I wanted, optioned as I wanted it; you all know these cars aren't sitting around at dealers like toyotas, they move. So I spent all day working the numbers and getting financing in order, which for some reason was difficult because I don't have established credit for big money cars. Fine, I got a co-signer.

Now the interesting stuff starts to happen. After I'm approved, I am immediately told I need to make a $3000 deposit to initiate the trade. Mind you we have not set final numbers and I felt like we still had a ways to go. I said I would not make a deposit on a car until they did the trade, and also would not make a deposit until our numbers were firmed up. The finance manager then told me he wouldn't trade the car unless I made a deposit. Now, maybe I should have made a deposit to secure the car, but I would like to think that a dealer should do so in good faith to earn my business. It turns out the car they were trading was the only 335i they had, and it had $6000+ more options on it, and therefore more profit. That's when I realized that ::SHOCK:: the dealership didn't care about MY business, they cared about MONEY and nothing else.

So the next day I went back to dealership A. They had a similar car, $3k more, but a better color and the added options were options I wanted. I worked the numbers, was very happy with them ($500 over invoice) and put down $10,000. Then I am told that the financing does not go through at BMW financial because my application has been red-flagged as fraudulent. Why? Because BMW dealership B (whose name I am struggling to not mention) called BMWFS and claimed a 'straw' transaction. I'm really not crystal clear about what a 'straw' deal is right now. BMWFS said that dealer B made a call and said I was buying this car for my brother, who is not on the contract. Well, I don't have a brother to be buying a car for. My mother doesn't know about this brother either. And, I was working with dealer A for two weeks so they knew that my intent was MY intent. I was with my grandfather for christ sake!

Now I'm waiting to go in tomorrow morning to get it straightened out. My feeling is that dealership B is saying to me: 'You waste our time, we'll waste yours', and this is completely unethical. I'm frankly very surprised that somebody would act this way. My CA at dealership A is appalled and just as surprised as me about this; he has never seen this in 15 years as a salesman. I am upset to say the least, and I have work to do tomorrow and this is getting in the way BIG TIME.

How strange is this? Has anybody here heard of anything like this? Has anybody even heard of a straw deal??? Well, I hadn't, but this is certainly going to be the last straw for me.

I'll keep this post updated as I get more info.

Oh, and BTW, this deal is for a SWEET 335i in space grey, with sports, upgraded 19" wheels, auto & paddles, and BMW assist. Nice and basic, just how I wanted it. I'll be posting pictures soon!

[Houman21]

If you're really pissed and have a friend who is a lawyer or a lawyer you may have on retainer - have them write a letter and send it certified to the owner of the dealership. In the letter, make sure you state that these individuals that you dealt with have made fraudulent claims that may adversely affect your credit - politely state that you are willing to take action. Have your lawyer sign it and send it from the Law Firm.

[darkphantom]

damn dude, that sucks. they're not called "stealerships" for nothing.....please notify us of this stealership and we'll make sure to tell others NOT to go there....

Also, the whole, "15 years of my working never seen this.....bla bla bla...." - i'm sure he'll tell you that, unless it was his time you wasted and he pulled something of that sort...most are all the same, they care about making money. It's a business....

*sigh*

Good luck with everything and +1000 to the lawyer w/ letter

[EZ_TUR90]

thats fucked up. by any chance was it Pacific BMW in Glendale?

[Chuckles]

I don't agree with whatever happened that flagged your application as fraud. I understand you'r upset with the situation, but here are my thoughts...

My deal was a dealer-to-dealer trade so I did quite a bit of reading on the subject. I can't promise it's all factual but here's what I read from various forums.

When a dealer has cars on the lot, they're sort of on-loan from BMWNA. The dealer pays fairly low cost each month (roughly interest on the loan). Because of the complexity of the paperwork, a trade requires your dealer to "floor" the car (they pay the full invoice price for the car out of pocket).

Additionally, your dealer will also have to offer a car to the other dealer. Often times this will be a car that's either in-route from the factory, or a future allocation. At this point, all future allocations are for 2009 cars which will quickly be the more desireable model.

So, depending on how your negotiations have gone so far your CA has to guess whether you'll go forward with the deal.

Your asking them to:
1) Invest ~$40k (invoice price) into a depreciating assest
2) Give up a car they might be able to sell for more profit
3) Spend time/effort negotiating with the other dealer
4) Take the risk that your co-signer might change their mind
5) Take the risk that might change your mind
6) Take a risk that the car gets scratched in transit and they have to fix
7) Take a risk that if you don't buy the car, who will?

The first dealer I went to actually told me they weren't really interested in doing a trade because a similar car was available across town. They actually told me to go to the other dealer because it would be less trouble.

The second dealer I delt with avoided the topic of a trade until I assured them that I was ready to buy a car, and they didn't have one in stock that I wanted. I finished all negotiations before offering to do a $1000 credit-card deposit to trade for the car.

Nick

[positiveions]

Originally Posted by Houman21

If you're really pissed and have a friend who is a lawyer or a lawyer you may have on retainer - have them write a letter and send it certified to the owner of the dealership. In the letter, make sure you state that these individuals that you dealt with have made fraudulent claims that may adversely affect your credit - politely state that you are willing to take action. Have your lawyer sign it and send it from the Law Firm.

+1

[downstrung]

Originally Posted by Chuckles

I don't agree with whatever happened that flagged your application as fraud. I understand you'r upset with the situation, but here are my thoughts...


Your asking them to:
1) Invest ~$40k (invoice price) into a depreciating assest
2) Give up a car they might be able to sell for more profit
3) Spend time/effort negotiating with the other dealer
4) Take the risk that your co-signer might change their mind
5) Take the risk that might change your mind
6) Take a risk that the car gets scratched in transit and they have to fix
7) Take a risk that if you don't buy the car, who will?

Nick

So I get this. It's OBVIOUS to me that the dealer wants to make money. They have plenty of reasons to be afraid of doing the trade, as you listed. However, my issue is that I don't agree with this business model. This is a classic case of corporate greed, not business. I totally understand that businesses need to make money, but as I see it, they only actually make money because of their customer. I explicitly said this to the CA and financial guy at the dealership. They didn't care. If they had brought the car over, I would have respected their dedication to my service and I would have bought the car. As it is, I went to another dealer and completed the transaction. Indeed they did not need to do a dealer trade, but the point is that I was ready to buy and they lost my business. They lost my business and kept a car with a LITTLE more profit built in. Consequently, they also pissed me off because they didn't care about me at all, and if I am in the market for a new BMW, this will steer me clear of them at all costs! They have no idea how much money I have, nor how many BMWs I will purchase in my life! As it is, I bought a 50k car from another dealer and every subsequent purchase will be made elsewhere, all because of the fact that they didn't take the risk for me. Maybe I'm a dreamer, but I feel as if ethical businesses need to make a comeback, fast!

I can see how both of us have valid perspectives about what the right thing to do was. My family has been in the automotive business for some time and I have exceptionally high expectations. At this point, I'm becoming quite disenchanted with BMW, though I bet no car company is going to be that much better.

At any rate, your response still doesn't answer my question: Would they have maliciously called BMWFS and stated that I was attempting to make a straw purchase? That's the main reason I'm upset. Would the new dealer have made that whole things up?

[downstrung]

In a more general response, I feel like I should follow up about my first post.

I do have a new 335i coupe as described earlier.

However, it is now in the shop for an engine malfunction. Day 2, 400 miles. More about this is posted in the engine forums.

I'm about to lose it!

[John 070]

What's bizarre about your situation is that you want to spend upwards of 40k. Usually, someone is willing and happy to take your money.

In general, when people are not willing to take my money, I decide I don't want to give it to them, end of story. I'm not saying I wouldn't feel disappointed in not getting a BMW, but I'm not going to beg a dealership to please sell me a car.

First of all, the need for a cosigner says something is wrong. Basically, the cosigner is the one taking out the loan (test this by having the cosigner buy the car without OP's signature). Seriously, it's not your privilege to give the dealership 40k+, rather, it's the other way around. F them and don't buy anything. Or buy an Infiniti, maybe they would like your 35k.

[SoYank]

"Straw" purchases are those where the buyer is buying for someone else not named or not eligible to make the purchase. Generally it applies to gun purchases but aren't limited to just those. http://en.wikipedia.org/wiki/Straw_purchase

[Chuckles]

Originally Posted by downstrung

At any rate, your response still doesn't answer my question: Would they have maliciously called BMWFS and stated that I was attempting to make a straw purchase? That's the main reason I'm upset. Would the new dealer have made that whole things up?

I don't have an answer for that one and I completely agree with you that it's an unacceptable action. I'd be fired up too

My long-winded post about dealer trades was really just to add context to others who may see this thread and be discouraged about the possibility of a dealer trade. It can work out, but folks need to go in with the understanding that you may have to push your CA to make it happen. In some cases (such as my first interaction, and your first interaction) the dealer just doesn't care to do a fair deal. I ended up doing the same as you, buying a $50k car from the *second* dealer because the first didn't want to work with me.

I hope everything has (or ends up) working out. Enjoy the new car.

Nick