BMW Financial finds iPads speed lease returns

BMW Financial Services says early results are encouraging for a dealership pilot program using iPads to process lease returns, making it more likely the practice will be extended nationwide.

"We're seeing certainly a quicker process, and we're also seeing a much more transparent process," said Shaun Bugbee, vice president of sales and marketing for BMW Financial Services.

Norm McLeod, lease-end director for one of the pilot dealerships, South Bay BMW in Torrance, Calif., said customers like the iPad program because they can walk around the vehicle at the same time it's being inspected and because they can see what information is being entered.

"We love it," McLeod said.

He said lease returns are heavy at the dealership. South Bay BMW takes in 125 to 130 off-lease vehicles in a slow month, he said, and 215 to 220 in the busy summer months. Especially at month-end, any improvement in the lease return process is a big deal in terms of time, efficiency and customer satisfaction, he said.

BMW launched the pilot program in October 2010 in five stores. That has grown to 16 dealerships as of late March. Bugbee said the system is designed to accommodate other brands of portable devices, not just the Apple iPad.

According to a recent internal survey by BMW Financial of off-lease customers, customer satisfaction scores with the lease-end process improved on average for all U.S. BMW dealerships, but the original five pilot stores improved twice as much as the average.

Bugbee said in a phone interview this month that the survey score for the most-improved pilot dealership rose to 9.49 on a 10-point scale, from 7.96. He said other factors could be at work, but BMW Financial believes the new lease turn-in process was key to the small but "significant" improvement.

The off-lease process is particularly important for the BMW brand.

BMW was third among the five most commonly leased brands in February, according to dealership transaction data compiled by AutoObserver.com, a unit of Edmunds.com. Leases accounted for 44 percent of BMW's retail volume in February, compared with an industry average of 26 percent, according to the data.

Rival Mercedes-Benz Financial started a program using iPads in the lease turn-in process in June 2010. In February, leases accounted for 43 percent of Mercedes-Benz retail volume, making it fourth in lease penetration, according to AutoObserver.com.

According to interviews, BMW Financial Services and Mercedes-Benz Financial also are considering using the iPad 2, which went on sale this month. It has a built-in camera that can be used to document a vehicle's condition.

Rick Belgiorno, lease return manager for BMW of Peabody (Mass.), another pilot dealership, said customers seem to like that the dealership is using the latest technology. He said some customers have iPads and some customers have asked to try his.

"It brings the customer right into it. People say, 'Let me see this. This is fabulous,' " Belgiorno said. "The feedback has been tremendous."