While it continues to enjoy steady growth, BMW Financial Services says it is taking steps to enhance its owner relations in the brand’s popular lease area.

BMW’s 340 U.S. dealers are being assisted by BMW FS in training their own appraisers for vehicles going offlease with lessors being contacted six months before their contracts expire to consider an early exchange for another BMW vehicle.

“The third-parties we had used for handling off-lease appraisals couldn’t handle the volume and weren’t sufficiently tuned in on a new BMW lease or purchase,” BMW FS President Bob Devine told F&I Management and Technology Magazine. “Moreover, the process became a touchy one in many cases, and we wanted to resolve the ill will it often created by bringing the service in-house.”

Approximately 220 BMW dealers have designated their own off-lease appraisers. About 38 percent of BMW’s sales this year are being leased, according to Devine, up from 33 percent in 2001.

Three months after BMWFS undertakes the first end-of-lease contact with its customers, dealers are asked to join the process. An incentive for early return and replacement with another BMW is offered and any repair work is done before the changeover deadline instead of at the end.

“Anything we can do to minimize the tension often felt at lease-end, and keep the customer a BMW owner, we aim to do,” Devine said. “That’s why we call the dealer staffers named to cover lease customers ‘portfolio managers,’ letting the customers know who they’re dealing with throughout.”

BMW FS, marking its 10th year as a U.S. financial provider, is increasing its annual loan and lease income to a record $6 billion for 2002, from $5.3 billion in 2001, according to Devine. The gain reflects BMW’s vehicle sales jump, plus “an ongoing close relationship between BMW dealers and BMWFS,” Devine said, which now extends to the 75 Mini dealers and the new Mini Financial Services division of BMWFS.

This past year, BMW FS launched a mortgage program for dealership expansions and renovations. Devine said the rates offered are on the low side of the market and mortgages can be obtained to 2007.

Mortgage funding was established as Mini Cooper entered the U.S. market last spring with 75 franchises, all BMW dealers. A separate showroom is required for Mini, either stand-alone or adjacent to the main BMW showroom.

BMW FS is continuing to service loans and leases from its former Land Rover brand, which is now a Ford subsidiary. Devine said Land Rover income will phase out in mid-2003.

The new BMW Bank, based in Salt Lake City, now has about 50,000 depositors and users of its credit card. Points are issued for transactions on the BMW card, for which applications are available at BMW stores.