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I agree that the 'right thing' for them to do it replace the wheels. Unfortunately in todays overly litigious society, and crushing weight of bean-counters, it becomes what's the cheapest route to make a problem go away.
The upside is, small claims court should be an easy win, and a good wheel repair shop can work magic.
My experience, in a construction zone, a lady decided she was going to occupy the lane me and my 6 months old C7 2LT M7 was in, and I had hit the binders and swerve hard to avoid an accident, doing so I drove over, at about 40MPH, 2 raised access covers (the smaller ones). TPMS immediate went off and both passenger side rims had thumb sized divots in them. Literally.
I took them to the shop recommended by our local Audi dealer (Wife drives an Audi, 1+1=... ) and they said they could fix them. 4-5 days later I picked up the wheels, took them out into the bright sunshine (summer day) and could not find the repair. On a gloss black forged wheel. I was amazed. Now I don't really worry too much about stuff like that.
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