BMW Letting U.S. Lessees Skip Payments in October Offer

Photographer: SeongJoon Cho/Bloomberg

BMW is introducing an incentive program through the end of this month that lets lease owners skip payments if they buy a new vehicle. Close

BMW is introducing an incentive program through the end of this month that lets lease... Read More

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Photographer: SeongJoon Cho/Bloomberg

BMW is introducing an incentive program through the end of this month that lets lease owners skip payments if they buy a new vehicle.

Bayerische Motoren Werke AG (BMW), falling behind Daimler AG (DAI)’s Mercedes-Benz in U.S. luxury auto sales, is introducing an incentive program through the end of this month that lets lease owners skip payments if they buy a new vehicle.

BMW is mailing offers to current lease owners of most of the vehicles in its 2010 model-year lineup that allows the customers to waive as many as three payments to buy a new or certified-used model, according to an Oct. 10 notice sent to dealers. The program, through BMW Financial Services, runs through Oct. 31.

After a 7 percent sales gain in September, Mercedes extended its lead over BMW to 5,221 deliveries through the year’s first nine months in the race to be the No. 1 U.S. luxury auto brand. BMW last year outsold Mercedes and Toyota Motor Corp. (7203)’s Lexus, which at that time was hurt by vehicle shortages following natural disasters in Asia. Lexus had been the top- selling luxury brand in the U.S. for 11 years.

Eligible models for BMW’s lease pull-ahead program include the 1 Series and 3 Series sedans, plus the 5 Series, 6 Series and 7 Series cars. The X3, X5 and X6 sport-utility vehicles also qualify. Models not eligible include M versions and 3 Series coupes and convertibles.

BMW Financial Services has introduced a lease pull-ahead program three times this year, Mike Geylin, a spokesman for the finance unit who works for Kermich-Geylin Public Relations Inc., said in a telephone interview. The initiative that runs through Oct. 31 is similar to efforts BMW made last year, he said.

“A lot of manufacturers do it,” Geylin said yesterday.

Demo Allowance

BMW introduced Specialty Demo Allowance deals late in July offering total payments ranging from $2,500 for some 2012 5 Series models to $7,000 for the 2012 7 Series, according to a July 31 notice sent to dealers. The allowances, which also were available for the 2012 3 Series, were kept in place in August, according to an Aug. 14 e-mail to dealers.

The incentives helped Munich-based BMW narrow Mercedes’s lead in U.S. sales to just 104 vehicle deliveries through July, according to statements from the automakers. BMW beat Mercedes last year by 2,715 deliveries.

The sales figures exclude Stuttgart, Germany-based Daimler’s Sprinter vans and Smart cars and BMW’s Mini brand, which aren’t luxury vehicles.

BMW has reduced incentives by 4.8 percent so far this year to $3,418 a vehicle, according to Autodata Corp. The automaker is still spending 37 percent more per vehicle than the industry average on discounts and promotions, the Woodcliff Lake, New Jersey-based researcher said in an e-mailed statement.

Mercedes Incentives

Mercedes has surpassed BMW in incentive spending through the year’s first nine months, boosting discounts by 11 percent to $3,582, or 44 percent more than the industry average.

Ludwig Willisch, head of BMW’s U.S. operations, in an interview last month reiterated that his brand will remain on top for the year, helped by a new all-wheel-drive version of the 3 Series and new X1, a vehicle that’s a step below BMW’s X3 midsize SUV.

Luxury auto makers previously have boosted incentives toward the end of a year. In November 2011, Mercedes offered to pull current customers out of their leases as much as eight months early to get them into new vehicles.

To contact the reporters on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net; Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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