PenFed Payment Saver Deal...

[BEMR]

Seems similar to Bmw select. But you will probably be upside down after 36 months if try and get out, otherwise you stay for 5. And is that residual based on 1000 miles a month or what actually sounds like 800 miles a month, no one has mentioned miles per year in all the responses when that determines end value or residual.

[BEMR]

Originally Posted by trucheli

I have done 7 EDs in a row and doing my 8th on December picking up an M4. All of them have been financed with PenFed. Recently I looked into the saver plan but came to the conclusion that the conventional loan for 72 months worked better. In my case I change my vehicles every year, I have around $30,000 in equity which was built in the past 7 years. Even at 2.56% APR I consider that free money. I don't like the fact that PenFed is determining the residual value on the car at the end of 5 years plus the interest rate is higher that the conventional.
If ain't broken don't fix it!

Can you be more specific in how the 30g stays as remaining equity after a year, especially year after year. In my calculation using your numbers it would appear as though your car only drops 6g in value over one year, that just doesn't seem right when it probably went down half that much by the time you drove it home. Not calling ya out just would like to see some specifics thanks.

And how many miles do you drive a year.

[yerffejleahcim]

Originally Posted by BEMR

Can you be more specific in how the 30g stays as remaining equity after a year, especially year after year. In my calculation using your numbers it would appear as though your car only drops 6g in value over one year, that just doesn't seem right when it probably went down half that much by the time you drove it home. Not calling ya out just would like to see some specifics thanks.

And how many miles do you drive a year.

He justs keeps the car in his garage and puts very minimal miles. He does not count his total expenses when he does ED. It wouldn't make sense to build equity especially if you are paying monthly on a loan. Every car depreciates. He has been called out on other forums multiple times already.

Overall he loses money and just don't want to see it that way.

[Roadkiller]

Originally Posted by BEMR

And is that residual based on 1000 miles a month or what actually sounds like 800 miles a month, no one has mentioned miles per year in all the responses when that determines end value or residual.

So PenFed also determines the miles per year? If this is the case, why not just lease since its likely you'll get out of the car before the balloon is due? Seems a reasonable lease with 10k over 3 yrs should provide similar $$$ numbers to the payment saver. Guess I don't understand.

[DocWeatherington]

Originally Posted by Roadkiller

So PenFed also determines the miles per year? If this is the case, why not just lease since its likely you'll get out of the car before the balloon is due? Seems a reasonable lease with 10k over 3 yrs should provide similar $$$ numbers to the payment saver. Guess I don't understand.

I used the penfed payment saver and was told it is base of 15k a year

[trucheli]

Originally Posted by BEMR

Can you be more specific in how the 30g stays as remaining equity after a year, especially year after year. In my calculation using your numbers it would appear as though your car only drops 6g in value over one year, that just doesn't seem right when it probably went down half that much by the time you drove it home. Not calling ya out just would like to see some specifics thanks.

And how many miles do you drive a year.

Simple, buy low and sell high. Plus making payments to a low interest loan making up the interest on the sale. I drive around 6000 miles per year. My last car was sold with 4800 miles.

[trucheli]

Originally Posted by yerffejleahcim

He justs keeps the car in his garage and puts very minimal miles. He does not count his total expenses when he does ED. It wouldn't make sense to build equity especially if you are paying monthly on a loan. Every car depreciates. He has been called out on other forums multiple times already.

Overall he loses money and just don't want to see it that way.

Are you one of the haters that don't have a clue about my specifics and keep making stupid assumptions. Nobody has called me out on anything. Besides, if you do a search someone with a lot more sense than you has spelled it out and figured it out.

[BEMR]

Originally Posted by trucheli

Simple, buy low and sell high. Plus making payments to a low interest loan making up the interest on the sale. I drive around 6000 miles per year. My last car was sold with 4800 miles.

Buy low and sell high, honest opinion here, cash buyers, guys like you driving low miles per year, guys putting tons of cash down, etc.......why would you invest in an item that depreciates??? Doesn't it make more sense to invest in items that "appreciate". Your tying up 30g continually when it could be used on "appreciating" items and making you real money, and far more makes sense when your getting interest rates as low as you claim. Right? doesn't that make more sense.

Rule of thumb for those listening, cash purchases on cars like these especially is stupid in these low interest rate markets these days. But what ever you do put cash in to upward investment items, NOT depreciating items like cars. Lease cars with little down, get in then get out, look for pull ahead programs to get you out early, but don't tie up cash like some people do on expensive cars.

[ky_soldier]

Im thinking of same deal as OP (w diff config). ED + Penfed equals awesome. Add to that my state does sales tax exemption for military and it simply can't be beat. Now just deciding between M3/4 or M235 conv. Gonna pull the trigger this week.

[Jaymax85]

What are the requirements for Penfed membership?

[trucheli]

Originally Posted by jawwadh

What are the requirements for Penfed membership?

$25 fee to join a non profit organization,

[trucheli]

Originally Posted by BEMR

Buy low and sell high, honest opinion here, cash buyers, guys like you driving low miles per year, guys putting tons of cash down, etc.......why would you invest in an item that depreciates??? Doesn't it make more sense to invest in items that "appreciate". Your tying up 30g continually when it could be used on "appreciating" items and making you real money, and far more makes sense when your getting interest rates as low as you claim. Right? doesn't that make more sense.

Rule of thumb for those listening, cash purchases on cars like these especially is stupid in these low interest rate markets these days. But what ever you do put cash in to upward investment items, NOT depreciating items like cars. Lease cars with little down, get in then get out, look for pull ahead programs to get you out early, but don't tie up cash like some people do on expensive cars.

Your theory is faulty because you are assuming that my case involves a depreciable asset. In my case I have turned a depreciable asset into an appreciable asset by buying at a low price by means of doing ED plus the deal I get thru my dealer, then selling them at a profit or braking even.. If you buy something at $xxx amount and then sell it at a profit, do you call that a depreciable asset or appreciable asset? I am a Financial Advisor and I know all about investing in appreciable assets. I don't buy my cars to make money, but I have been able to minimize my cost of ownership by flipping my cars every year and at the same time build equity every year. If you think that doing a lease is a better option for you keep doing it. To me is a waste of money compared to my strategy. Please show me how to make a profit on a lease.

[BEMR]

trucheli

I'm an Accountant, what's your net profit on the overall cost at the end of the term your talking about. In other words how much cash are you out in total during the period of time you had the car. For a fair comparison you'd have to disclose that number.

And if what your saying is better, why couldn't you do what your doing without the 30g, I haven't put a dime into down payment or drive offs in years. Then take your 30g and put it into one of your investment programs. Obviously you'd pay more on interest on the cars, but for the price of the money on low car acquisition loans today, you could make ten fold on your money than the cost in the difference to finance 30g. And since when is a vehicle an appreciating investment, I've been an Accountant for 32 years and have never heard that unless your dealing with rare classic rides. Thanks for your response.

[Vectors2final]

For me, I'm putting money down because I'm in a good position to. Also, it keeps my monthly more comfortable. When my house sells, I'll have more than enough to cover the balloon and then some. Currently building a home that's paid for. I'm also getting about 7k chopped with the military sales program, so that helps as well. I'll be financing $54k, so I'm already 20k less than orginal MSRP before discounts are had. I'm more likely to be in an advantageous position later on to bail out if need be and still not be negative or lose much...


I also will be keeping this car for quite sometime and won't be jumping from car to car like I used to. This suits my needs more than the cars I have purchased in the past.

YMMV, but this works for people and not every situation fits.

[M_PATHY]

Originally Posted by Vectors2final

For me, I'm putting money down because I'm in a good position to. Also, it keeps my monthly more comfortable. When my house sells, I'll have more than enough to cover the balloon and then some. Currently building a home that's paid for. I'm also getting about 7k chopped with the military sales program, so that helps as well. I'll be financing $54k, so I'm already 20k less than orginal MSRP before discounts are had. I'm more likely to be in an advantageous position later on to bail out if need be and still not be negative or lose much...


I also will be keeping this car for quite sometime and won't be jumping from car to car like I used to. This suits my needs more than the cars I have purchased in the past.

YMMV, but this works for people and not every situation fits.

I'm going through military sales as well, but how did you get an additional discount?

[Vectors2final]

Originally Posted by M_PATHY

I'm going through military sales as well, but how did you get an additional discount?

When I build my car on the BMW USA website it comes out to almost $76k... I'm at $69,xxx on my build. It's rather rough, but it's pretty close.


Might be closer to six than seven. Either way.


EDIT: After looking, it's closer to six. Still, it's a great deal for me and when compared to some of the prices people have paid it is an absolute steal.

[trucheli]

Originally Posted by BEMR

trucheli

I'm an Accountant, what's your net profit on the overall cost at the end of the term your talking about. In other words how much cash are you out in total during the period of time you had the car. For a fair comparison you'd have to disclose that number.

And if what your saying is better, why couldn't you do what your doing without the 30g, I haven't put a dime into down payment or drive offs in years. Then take your 30g and put it into one of your investment programs. Obviously you'd pay more on interest on the cars, but for the price of the money on low car acquisition loans today, you could make ten fold on your money than the cost in the difference to finance 30g. And since when is a vehicle an appreciating investment, I've been an Accountant for 32 years and have never heard that unless your dealing with rare classic rides. Thanks for your response.

My cash out is basically the interest on the loan which could be around $1200 per year depending on how much I put down, plus the taxes. I do a pass thru, basically I show my car that I sell privately as a trade in because I immediately buy another car minimizing my tax liability only paying taxes on the difference of the selling price and purchase price. In Florida this is legal (i.e last year I sold my 2013 M3 and bought a 435i with not tax liability) . I would've like to keep the 30g on my side obviously but then my cash flow would be different since financing a $70,000 car with no money down even at 2.59% for 72 months would be $1,050 and the interest would be higher also. If I do a lease with no money down my payment would be around $900 to $1000 a month. Therefore, keeping the car for 10 months would put me in the negative for $10,000 and no equity built at all. Nowadays, $30,000 invested in the market would not make much return with Money Market at 1% return. Stocks, ETFs, Preferred Stock or Bonds would put my money at a unnecessary risk in the short term.
All the cars depreciate, that's no secret. At the same time you can minimize your cost of ownership or make a profit turning a depreciable asset into an appreciable asset by building equity like I have done. This have worked for me and anyone who understand about ED, borrowing money at a low interest rate and selling a car at a profit can figure that out. I have been getting a lot of hate from people who don 't understand or don't like the fact that I make profit on used cars. I am not going to go into specifics about my deals and how I sell my cars at a profit but I just wanted to throw that idea to people who think outside the box who might benefit from this strategy like me. My strategy would beat any lease any day.
I hope this clear your questions and I took the time to answer because you are one of the few who show an interest without challenging my credibility.

[Doctor///M]

Originally Posted by trucheli

I have done 7 EDs in a row and doing my 8th on December picking up an M4. All of them have been financed with PenFed. Recently I looked into the saver plan but came to the conclusion that the conventional loan for 72 months worked better. In my case I change my vehicles every year, I have around $30,000 in equity which was built in the past 7 years. Even at 2.56% APR I consider that free money. I don't like the fact that PenFed is determining the residual value on the car at the end of 5 years plus the interest rate is higher that the conventional.

If ain't broken don't fix it!

So, I found out that financing ED through PenFed may involve insurance costs (e.g. State Farm) even before the car reaches stateside.

Can you confirm that this is true?

The loan officer stated that PenFed required that their lienholder status needs to be confirmed by our local insurance as a condition when the financing occurs. I surely would prefer not to be spending 2 months of insurance on a car that's not even on US soil.

[trucheli]

Originally Posted by notan///m

So, I found out that financing ED through PenFed may involve insurance costs (e.g. State Farm) even before the car reaches stateside.

Can you confirm that this is true?

The loan officer stated that PenFed required that their lienholder status needs to be confirmed by our local insurance as a condition when the financing occurs. I surely would prefer not to be spending 2 months of insurance on a car that's not even on US soil.

I just had to show proof of insurance to my dealer as a formality before doing ED. Pen Fed has never asked me for proof of insurance before delivery of my car. The vehicle will be insured for free for two weeks while in Germany, then you don't have to worry about having insurance until re-delivery. Even then you have some time to secure insurance. I have always have asked for a quote to Geico before picking up the car and on the day of re-delivery I activate the coverage.

[Doctor///M]

Originally Posted by trucheli

I just had to show proof of insurance to my dealer as a formality before doing ED. Pen Fed has never asked me for proof of insurance before delivery of my car. The vehicle will be insured for free for two weeks while in Germany, then you don't have to worry about having insurance until re-delivery. Even then you have some time to secure insurance. I have always have asked for a quote to Geico before picking up the car and on the day of re-delivery I activate the coverage.

Great, thanks... this sounds reasonable to me.

[ky_soldier]

I had USAA do a limited policy while my vehicle was on the boat. I think you're still covered by BMW but USAA charged a nominal fee and your lienholder probably just wants to know that SOMEONE is insuring it in transit since you sort of took delivery in Germany

[Vectors2final]

Anyone else have to wait because you didn't supply a VIN?