Agency Information Collection Activities; Proposed Collection; Comment Request; FTC File No. P154800 #00002

Submission Number:
Eric Sutton
Initiative Name:
Agency Information Collection Activities; Proposed Collection; Comment Request; FTC File No. P154800
On October 12, 2015 I purchased a 2015 BMW 528i from United BMW of Roswell through their "Owner's Choice" finance program (which was presented as a lease alternative by the dealership). Before visiting the dealership, I researched the lease specials available and intended on leasing a vehicle; in fact, until I spoke with the Finance Manager, all payment terms discussed with the sales representative and sales manager were, as I understood, lease payments. I believe my credit application would also indicate that I applied for a lease. After we came to what I felt was a satisfactory deal, I was sat with the finance manager who explained the "Owner's Choice" program to me. He explained that the differences between "Owner's Choice" and leasing were: -The vehicle would be titled in my name, allowing me to reap tax savings should I trade the vehicle in -Instead of a residual, there would be a balloon payment at the end of my 36 month term. However I could still turn the vehicle in at the end of my term as I would with a lease. I elected to go with a 10,000 mile per year lease as I was under the impression that I would be able to purchase miles during the term of the loan at a discounted rate (I believe $0.16 per mile as opposed to $0.20 is what BMW charges lease customers) through their "Mileage Adjustment Program". I contacted BMW Finance and attempted to purchase additional miles and was informed that I could not do so with the "Owner's Choice" program; the rep stated this option was only available for lease clients. I feel that this is unfair: the "Owner's Choice" program is something unique to BMW, and consumers have no reasonable means of understanding the nuances of the program other than through the dealership staff and loan documents. I reviewed the loan documents thoroughly and it does not state that customers cannot buy additional miles before the end of the term at a discounted rate, as you can commonly do with a lease. Had I known this at the time of origination, I would have chosen 15,000 miles per year. While I did sign a contract for the Owner's Choice loan for 10,000 miles annually, I did so believing that the Owner's Choice program would work like a lease. I came to this conclusion not only based on the information provided by the dealership, but also based the information disclosed on the Contract and BMWs website, Please see attached printouts that show that BMW frames the Owner's Choice loan as being similar to a lease (even using the term "lease-like" in their description) in no other ways than those I understood at the time of origination. Also see the attached document that shows that the description of BMWs 'Mileage Adjustment Program' and the qualifiers of the program (account in good standing, more than 120 days from maturity). Due to BMW framing the loan as similar to a lease, why would a consumer believe that they would not be eligible to participate in this program if they meet these qualifications? I submitted a complaint to the CFPB and BMWs response was "The option to purchase additional mileage at a discounted rate is not included in your contract, and this option is not allowed unless the contract specifically provides for it". I performed my own research and was able to find some BMW FS lease agreements that were attached to court cases or uploaded by consumers. The lease agreement very clearly and plainly states the mileage limitations in a very similar manner to the contract I signed and does not contain any provisions specifically stating that discounted mileage may be purchased. While the option to purchase additional miles may be available at origination, based on BMWs description of the Mileage Adjustment Program it is not exclusive to customers that make this decision at origination. I was steered into a product that put me at a disadvantage, as I will now have to pay 20% more for any mileage overages, and won't be able to finance them into my payment.