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Reading Between The Lines

22 December 1997

Reading Between The Lines

         BMW Introduces Automotive Lease Language In `Plain English'

    WOODCLIFF LAKE, N.J., Dec. 22 -- Residual value, early
termination, capitalized cost -- while leasing has eased the financial burden
of buying a car, signing a lease has become an unfriendly maze of complicated
language. In an effort to make the process more "consumer-centric," BMW will
soon introduce a new easy-to-understand lease application that will guide
customers step-by-step through their leasing options and terms.
    "It's important that the finance and leasing process responds to the needs
of our customers as well as our automobiles respond to their drivers," says
Lindsay Duffield, Vice President of Sales & Marketing for BMW Financial
Services.  "Our goal is to make sure consumers have the ultimate lease
experience with BMW Financial Services."
    Beginning Jan. 1, consumers should expect to encounter more consumer-
friendly lease language across the board.  That's when "Regulation M" -- an
amendment to the Consumer Leasing Act originally enacted in 1976 -- goes into
effect.
    "Today, more and more drivers choose to lease," says Duffield. "Regulation
M is an important step toward recognizing the growth of lease sales and making
sure consumers have all the information they need before signing on the bottom
line."
    BMW Financial Services has gone beyond the basic Regulation M requirements
by:
    --  Revising its lease application to incorporate "plain English" language
        with clearly stated terms.
    --  Reducing the cost for early termination.
    --  Offering a prepaid mileage option which gives the consumer the
        opportunity to obtain a refund for any unused miles at lease end.

    Regulation M
    In short, Regulation M will require lessors to:
    --  Adopt the recognized industry term "capitalized cost" to aid the
        customer in comparing the cost of leasing versus financing a purchase.
    --  Disclose the following:
        --  A description of the leased vehicle.
        --  Total amount of money due at lease signing, itemized by type of
            charge.  The lessor must list exactly how much the lessee is being
            asked to pay for each item such as security deposit, first monthly
            payment and down payment.
        --  Monthly payment information, including amount and due dates for
            payments under the lease and the total amount of all monthly
            payments.
        --  Total of ALL payments. This requires the lessor to give the total
            of all amounts spent by the lessee, including amounts paid at
            lease signing and other charges.
    --  Include a payment calculation giving a step-by-step mathematical
        explanation of how the monthly payment was derived.
    --  Clearly spell out penalties for early-lease termination, maintenance
        responsibilities and wear and tear.

    BMW entered the North American market in 1975.  Since then, the company
has grown to include marketing, sales and financial services organizations in
the United States and Canada; a South Carolina manufacturing operation; a
design firm in California; and various other operations throughout the U.S.
and Canada.  BMW is represented in North America through a network of more
than 375 automobile and 190 motorcycle retailers in the United States and
Canada. BMW (US) Holding Corp., the brand's North American headquarters, is
located in Woodcliff Lake, N.J.
    To help consumers better understand the terms and conditions of their
lease agreement, BMW Financial Services has put together a free brochure
called "Consumer's Guide to Automotive Leasing."   Consumers can receive their
free copy by calling 800-334-4BMW or registering online at http://www.bmwusa.com.

SOURCE  BMW Financial Services