Lease Return - Sold just as pre-owned not CPO - Red flag?

[runbad]

So I've been looking for a 540 for a little bit now with the intent of picking one up this summer.

I found a lease returned 540i with the balance of the remaining factory warranty being sold by the dealer as a pre-owned and not a CPO car. The car has no accident history in Carfax and appears to have all scheduled maintenance performed.

I wanted to ask everyone's opinion on this as it's a tempting purchase but...

Is the car not being sold as a CPO necessarily a red flag?

The car is clearly listed way below the current market value for a CPO 540 (maybe by $4-6k), so this made me a bit suspicious about the state of the car.

What reason(s) would there be for the dealer to not CPO a car that also wouldn't make it a bad pre-owned purchase?

Any thoughts or opinions?

Very tempted to have a look at it, but unsure if this is an obvious red flag that a savvier buyer would run from (for some context, I haven't owned a car in over 15 years as I live in a city w mass transit and have easy access to Zipcar).

[BlkGS]

It costs them money to CPO it, both in shop time and in cost to BMW. They figured they could sell it easier at a lower price than at a higher price and CPO. Pretty common, they can probably get you out the door with an aftermarket warranty that lasts longer than the CPO for less than it as a CPO car.

[jkoral]

Many dealers will CPO the car on request, but expect a non-trivial increase in list price.

IMHO, CPO lost a lot of value when it was reduced from 2 years/50K to 1 year/unlimited miles, That said, I bought my last BMW CPO but it had no bearing on my decision.

[BMWCCA1]

On top of the actual cost of inspection and registering in the CPO program, there is often the requirement for new tires due either because of tread-depth requirements or brand and BMW "star" logo. On M-cars in particular even a brand new tire comes close to failing the tread-depth requirement. We used to throw away perfectly good tires on nearly every CPO we did. You can be talking about almost $4k sometimes between CPO cost and tires. Technically a car won't qualify if any oil service has been done even slightly off schedule unless the vehicle is submitted to a oil analysis. All that for just one-year of additional coverage? Phooey.

[ZL9M2]

CPO is all about marketing and extracting more $$ from buyers. Vet it like you would any used car... CarFax, maintenance history, full independant inspection, etc...

[snaimpally]

I bought a 2011 335i 6MT with only 17,000 miles from a big autoplex in Dallas - it was a lease return that the autoplex bought at auction. There were still a few months of warranty left on it. I have no idea why BMW didn't sell it as a CPO given the low mileage. The autoplex is massive and specializes in performance cars - they had signed pictures of various athletes from the Cowboys, Stars, and Mavericks who had bought vehicles from them.

[F32Fleet]

Originally Posted by runbad

So I've been looking for a 540 for a little bit now with the intent of picking one up this summer.

I found a lease returned 540i with the balance of the remaining factory warranty being sold by the dealer as a pre-owned and not a CPO car. The car has no accident history in Carfax and appears to have all scheduled maintenance performed.

I wanted to ask everyone's opinion on this as it's a tempting purchase but...

Is the car not being sold as a CPO necessarily a red flag?

The car is clearly listed way below the current market value for a CPO 540 (maybe by $4-6k), so this made me a bit suspicious about the state of the car.

What reason(s) would there be for the dealer to not CPO a car that also wouldn't make it a bad pre-owned purchase?

Any thoughts or opinions?

Very tempted to have a look at it, but unsure if this is an obvious red flag that a savvier buyer would run from (for some context, I haven't owned a car in over 15 years as I live in a city w mass transit and have easy access to Zipcar).

Run. There's something preventing them from selling as CPO.

[Westside Guy]

runbad, what was the year and what was the mileage on this 540i?

[BMWCCA1]

Originally Posted by snaimpally

I bought a 2011 335i 6MT with only 17,000 miles from a big autoplex in Dallas - it was a lease return that the autoplex bought at auction. There were still a few months of warranty left on it. I have no idea why BMW didn't sell it as a CPO given the low mileage. The autoplex is massive and specializes in performance cars - they had signed pictures of various athletes from the Cowboys, Stars, and Mavericks who had bought vehicles from them.

You did not mention particularly but maybe it was because the dealer wasn't a BMW store? If our Audi store took a BMW in trade, they couldn't CPO it either. Same for us taking an Audi in trade at BMW. Your experience must be from so long ago being a 2011 leased car. Back when CPO was a two-year coverage. But only a BMW store can CPO a BMW and the car must be less than 5-years old with less than 60k miles on it.

[snaimpally]

Originally Posted by BMWCCA1

You did not mention particularly but maybe it was because the dealer wasn't a BMW store? If our Audi store took a BMW in trade, they couldn't CPO it either. Same for us taking an Audi in trade at BMW. Your experience must be from so long ago being a 2011 leased car. Back when CPO was a two-year coverage. But only a BMW store can CPO a BMW and the car must be less than 5-years old with less than 60k miles on it.

My 2011 335i was a lease return. I don't know how it ended up at auction - possibly because the dealer didn't want to deal with trying to sell a 6 speed manual? I live in Austin, and the only 6 MT at the local dealer were Z3/Z4. I had to broaden my search to Dallas and Houston to try and get hits on 6 MT. I bought my 2011 in 2013 (though it was manufactured in 2010) so theoretically, it could have been CPOd. In fact, I bought an extended warranty through BMW and turned it into a kind of CPO.

Someone had posted that BMW is the vehicle brand that is most often leased (much more than other brands). Perhaps the dealers get so many lease returns they send off the less desireable ones (e.g., 6 MT) to auction? After my 2011 was totalled, I was looking around and saw a LOT of 228is - I think the 228i is a very popular car to lease - just about every non-BMW dealer in town had one in their used car dept.

[pbonsalb]

Check service records to make sure all required oil changes and so forth were on time. BMW cannot CPO if there were not on time or if there was a significant accident. And as some said, BMW does not automatically CPO all eligible cars.

[tturedraider]

Originally Posted by F32Fleet

Run. There's something preventing them from selling as CPO.

That’s not necessarily true by any stretch of the imagination. As others have said, it is not especially uncommon for dealers to sell low mileage lease returns as non-CPO cars for all of the reasons mentioned here. And this practice is becoming increasingly popular with BMW dealers. Lack of CPO on cars like the one in question here in no way automatically means it has problems. BMW dealers are much less inclined to sell problem cars than non-BMW dealers. They want their dealership and the brand to retain their good reputation. If it was a problem car it most likely would have gone to a non-BMW dealer.

[RockCrusher]

Originally Posted by runbad

So I've been looking for a 540 for a little bit now with the intent of picking one up this summer.

I found a lease returned 540i with the balance of the remaining factory warranty being sold by the dealer as a pre-owned and not a CPO car. The car has no accident history in Carfax and appears to have all scheduled maintenance performed.

I wanted to ask everyone's opinion on this as it's a tempting purchase but...

Is the car not being sold as a CPO necessarily a red flag?

The car is clearly listed way below the current market value for a CPO 540 (maybe by $4-6k), so this made me a bit suspicious about the state of the car.

What reason(s) would there be for the dealer to not CPO a car that also wouldn't make it a bad pre-owned purchase?

Any thoughts or opinions?

Very tempted to have a look at it, but unsure if this is an obvious red flag that a savvier buyer would run from (for some context, I haven't owned a car in over 15 years as I live in a city w mass transit and have easy access to Zipcar).

One would expect a low miles lease return car to be a good CPO candidate.

Even if the dealer decided the car didn't need to be CPO'd to make it more attractive to mark the car down -- by $4K to $6K below market -- is just not normal dealer behavior.

A dealer would forgo CPO'ing the car but still keep the asking price high.

Think I'd give this car a miss and look for a similar car but with a CPO. And given the used car market is soft you could still get the car below the dealer's asking price.

Remember: Price is not fact only an opinion.

[S EyeLand]

CPO covers nearly nothing that matters. Get an aftermarket warranty with the money saved and cover everything for cheaper. As for why they didn't CPO it, ask them.

[tturedraider]

Originally Posted by S EyeLand

CPO covers nearly nothing that matters. Get an aftermarket warranty with the money saved and cover everything for cheaper. As for why they didn't CPO it, ask them.

That’s simply not true. The BMW CPO warranty is an exclusionary warranty, which means it covers everything that isn’t specifically excluded. It is true it is not as comprehensive as the new car warranty, but it covers way more than it excludes. Most of what is excluded are either wear and tear items or electronic equipment related items. It does cover electric mechanical items such as the power seat and window motors.

https://www.bmwusa.com/content/dam/b...1598782694.pdf

[ViO]

Originally Posted by runbad

So I've been looking for a 540 for a little bit now with the intent of picking one up this summer.

I found a lease returned 540i with the balance of the remaining factory warranty being sold by the dealer as a pre-owned and not a CPO car. The car has no accident history in Carfax and appears to have all scheduled maintenance performed.

I wanted to ask everyone's opinion on this as it's a tempting purchase but...

Is the car not being sold as a CPO necessarily a red flag?

The car is clearly listed way below the current market value for a CPO 540 (maybe by $4-6k), so this made me a bit suspicious about the state of the car.

What reason(s) would there be for the dealer to not CPO a car that also wouldn't make it a bad pre-owned purchase?

Any thoughts or opinions?

Very tempted to have a look at it, but unsure if this is an obvious red flag that a savvier buyer would run from (for some context, I haven't owned a car in over 15 years as I live in a city w mass transit and have easy access to Zipcar).

I wouldn’t be too concerned… How does the carfax look? This can be due to the prior owner not meeting the maintenance requirements that are covered in the owners manual. It has the have had regular scheduled maintenance records to meet certification requirements.

Depends on model (M models are more stringent) but that’s one of the reasons it can’t be certified. Doesn’t mean it’s a bad car though. There are other factors that need to be taken into consideration as well.