04-09-2020, 12:23 PM | #1 |
Private
24
Rep 88
Posts |
BMW Select
Did anyone do BMW Select financing when they originally purchased their car? This is where there is a balloon payment at the end. I got .9% at the time (2016) so I decided to borrow the cheap money.
My loan is due next year and was wondering what options BMW had at the end to finance the balance of the balloon? Has anyone been in this situation? Most likely I will pay off the balloon at the end, but if they let me continue financing it at .9% I may just let it ride for another year. |
04-13-2020, 12:30 PM | #2 | |
///Multiple
2992
Rep 4,243
Posts
Drives: M4 Coupe | M3 | Z4M Roadster
Join Date: Jan 2011
Location: San Diego, CA
iTrader: (1)
Garage List 2006 BMW Z4 M Roadster [8.81]
2016 BMW M4 Coupe ( ... [10.00] 2018 BMW M3 (Euro D ... [0.00] 2011 BMW 335is Coup ... [10.00] |
Quote:
__________________
The Coupe: 2016 M4 | Sakhir Orange | Black Full Merino Leather | CF Trim | M-DCT | More | ED 5/13/16
The Sedan: 2018 M3 | San Marino Blue | Black Full Merino Leather | CF Trim | M-DCT | ZCP | ED 7/18/18 The Roadster: 2006 Z4 | Interlagos Blue | Black Extended Nappa Leather | Carbon Leather Trim | Purchased 7/19/12 |
|
Appreciate
0
|
04-13-2020, 03:07 PM | #3 | |
Major
746
Rep 1,247
Posts |
Quote:
You will now get a used car rate if you need to refinance the bubble instead of paying it off lump sum. Also, you didn't really save much by going with 0.9% as you now have to refinance. You paid 0.9% on the *entire* cost of the vehicle during the duration of the select. Now if you don't pay lump sum you will pay the elevated used car interest rate on the remaining amount. This is why they love BMW select. They make tons and tons of interest. |
|
Appreciate
0
|
04-13-2020, 05:27 PM | #4 | |
///Multiple
2992
Rep 4,243
Posts
Drives: M4 Coupe | M3 | Z4M Roadster
Join Date: Jan 2011
Location: San Diego, CA
iTrader: (1)
Garage List 2006 BMW Z4 M Roadster [8.81]
2016 BMW M4 Coupe ( ... [10.00] 2018 BMW M3 (Euro D ... [0.00] 2011 BMW 335is Coup ... [10.00] |
Quote:
When I made my payments for the first two years I rounded up quite a bit, but when my wife did Euro Delivery on her 2018 M3 and the rates were almost 4%, we now round way up on her loan and just make the regular payment on mine. Because we did Euro Delivery and had to use BMW FS initially, we refinanced with our CU after re-delivery to drop the rate from high 3% to low 3%.
__________________
The Coupe: 2016 M4 | Sakhir Orange | Black Full Merino Leather | CF Trim | M-DCT | More | ED 5/13/16
The Sedan: 2018 M3 | San Marino Blue | Black Full Merino Leather | CF Trim | M-DCT | ZCP | ED 7/18/18 The Roadster: 2006 Z4 | Interlagos Blue | Black Extended Nappa Leather | Carbon Leather Trim | Purchased 7/19/12 |
|
Appreciate
0
|
04-16-2020, 10:53 PM | #5 | ||||
Private
24
Rep 88
Posts |
Quote:
Quote:
|
||||
Appreciate
0
|
05-06-2020, 07:16 PM | #6 | |
Major
908
Rep 1,211
Posts |
Quote:
|
|
Appreciate
0
|
05-06-2020, 09:31 PM | #7 | |
Major
746
Rep 1,247
Posts |
Quote:
There's no way that a regular finance would be beaten by this at the same interest rate. The only way select would make sense is at 0% interest, which I don't believe BMW has ever done in recent years. |
|
Appreciate
0
|
05-07-2020, 08:51 AM | #8 | |
Major
908
Rep 1,211
Posts |
Quote:
|
|
Appreciate
0
|
05-07-2020, 12:53 PM | #9 | |
Major
746
Rep 1,247
Posts |
Quote:
It's kind of a terrible decision though. Lower your payments while paying extra interest and pay more for the car in the end but to each his own. |
|
Appreciate
0
|
05-07-2020, 02:21 PM | #10 |
Captain
177
Rep 647
Posts |
BMW select is fine. I used it on my F80 M3 a few years back. You can select what your balloon payment will be, so it is a great way to get a very low interest rate. I made my set payments much higher so I did not worry about a balloon payment.
You can refinance your balloon into a new higher rate term if you get to that point. It is only a bad idea if you are using it as a means to be able to afford a more expensive car. |
Appreciate
0
|
05-07-2020, 03:04 PM | #11 | |
Major
908
Rep 1,211
Posts |
Quote:
|
|
Appreciate
0
|
05-07-2020, 03:32 PM | #13 |
Major
908
Rep 1,211
Posts |
|
Appreciate
0
|
05-08-2020, 11:33 AM | #14 |
Captain
177
Rep 647
Posts |
72 or 84 makes me cringe. Essentially that will happen to BMW select customers who refinance the balloon. If the balloon payment is in the larger side, you will have to refinance into another 3 year term. 2 year term payments would be very tough. So now you have essentially created an 8 year loan on a vehicle.
Since the three year loan will be a higher rate with BMW financial or any other lender, the goal would be to make as much principal payments on top of your monthly payment to cause re-amortization of total interest paid. So the beauty of having 1.9% and paying additional principal only payments is that you are paying close to nothing in interest as those extra principal payments are re-amortizing the already low interest. That is why I did BMW select initially. But again, great option for someone who is focused on reducing total interest paid vs. what is monthly payment. Last edited by mtr3s; 05-08-2020 at 11:38 AM.. |
Appreciate
2
RR-NYC154.00 Alpine300zhp1447.50 |
05-19-2020, 08:53 PM | #15 |
Captain
154
Rep 663
Posts |
I had BMW select on my 2015 X5 that matures next month. I've been getting emails and calls from them outlining my options. 1) proceed with the balloon payment. 2) trade-in the vehicle and buy a new one, or 3) refinance which is handled by a third party RefiJef.
Rates were higher than I had when with my original loan so I just traded it in for a new X3MC. Dealers are motivated, money is cheaper than its ever been, and BMW is offering tons of incentives. I ended up with 10% off sticker and 6500 in rebates. |
Appreciate
0
|
05-19-2020, 10:00 PM | #16 | ||
Private
24
Rep 88
Posts |
Quote:
Quote:
|
||
Appreciate
0
|
05-20-2020, 08:24 AM | #17 | |
Major
746
Rep 1,247
Posts |
Quote:
Can just pay it early as you go but leaves you the option to pay less if you end up having to. Same with a 30 year vs 15 year mortgage. Can just pay a 30 down earlier but leaves you with the option to pay less if you lose your job, etc. |
|
Appreciate
0
|
05-20-2020, 08:58 AM | #18 | |||
Captain
154
Rep 663
Posts |
Quote:
|
|||
Appreciate
0
|
05-20-2020, 09:38 AM | #19 | ||||||||
Private
24
Rep 88
Posts |
Quote:
Quote:
|
||||||||
Appreciate
0
|
05-20-2020, 01:44 PM | #20 | |||||||||
Captain
154
Rep 663
Posts |
Quote:
|
|||||||||
Appreciate
0
|
05-20-2020, 02:01 PM | #22 | ||||||||||||||||||||
Private
24
Rep 88
Posts |
Quote:
Quote:
Dang! That's what I paid for my F80 four years ago! |
||||||||||||||||||||
Appreciate
0
|
Post Reply |
Bookmarks |
|
|