BMW Select

[dcg8r]

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.

[SD ///M4]

Originally Posted by dcg8r

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.

I have no evidence, but I doubt that they will let you continue financing at 0.9%. You should check your contract to see what options are written into the contract, as it's that contract and no one else's that will determine what your options are at the end of the contract. You may be able to negotiate but I doubt you will get 0.9%.

[aerostar]

Originally Posted by SD ///M4

I have no evidence, but I doubt that they will let you continue financing at 0.9%. You should check your contract to see what options are written into the contract, as it's that contract and no one else's that will determine what your options are at the end of the contract. You may be able to negotiate but I doubt you will get 0.9%.

This.

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.

[SD ///M4]

Originally Posted by aerostar

This.

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.

This is why doing regular financing when you have a 0.9% rate available is the best way to go. I was considering leasing my Euro Delivery 2016 M4 when I ordered it new in February 2016 but the BMW FS rate of 0.9% at the time was just about as close as you can get to a zero-interest loan, or a "no-cost" loan, so I financed instead of leasing.

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%.

[dcg8r]

Originally Posted by SD ///M4

This is why doing regular financing when you have a 0.9% rate available is the best way to go. I was considering leasing my Euro Delivery 2016 M4 when I ordered it new in February 2016 but the BMW FS rate of 0.9% at the time was just about as close as you can get to a zero-interest loan, or a "no-cost" loan, so I financed instead of leasing.

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%.

Originally Posted by SD ///M4

This is why doing regular financing when you have a 0.9% rate available is the best way to go. I was considering leasing my Euro Delivery 2016 M4 when I ordered it new in February 2016 but the BMW FS rate of 0.9% at the time was just about as close as you can get to a zero-interest loan, or a "no-cost" loan, so I financed instead of leasing.

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%.

Yeah, I was planning on paying it off at the end, just wanted to see if anyone had any experience. Although we are in such unusual times now, who knows what the manufacturers will be willing to do.

[M3GymNut]

Originally Posted by aerostar

This.

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.

Granted yes but you can easily refinance with another financial institution at a relatively low interest based on credit. The Select plan is a great plan if you know when to use it.

[aerostar]

Originally Posted by M3GymNut

Granted yes but you can easily refinance with another financial institution at a relatively low interest based on credit. The Select plan is a great plan if you know when to use it.

I'm not sure if I agree with you. I'm pretty sure that when you do Select you pay interest on the entire car purchase amount (bubble included) for the duration of your pre-bubble financing period. Then you need to re-finance the bubble or pay it off in full.

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.

[M3GymNut]

Originally Posted by aerostar

I'm not sure if I agree with you. I'm pretty sure that when you do Select you pay interest on the entire car purchase amount (bubble included) for the duration of your pre-bubble financing period. Then you need to re-finance the bubble or pay it off in full.

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.

I never said a regular refinance is better than the Select. The plan is good for those that can lower their monthly payment a pretty good amount then refinance it later or pay it in full.

[aerostar]

Originally Posted by M3GymNut

I never said a regular refinance is better than the Select. The plan is good for those that can lower their monthly payment a pretty good amount then refinance it later or pay it in full.

I guess.

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.

[mtr3s]

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.

[M3GymNut]

Originally Posted by mtr3s

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.

This...like I said it's a good alternative if you know how to use it. I have it on my current F80 and I have a 1.9% interest on it. I did it for 3 years and when the balloon comes up I either pay it in full or I can refinance for 2 years max is what I would do. So if I decide to keep the cash which I probably will do, it will take me 5 years to pay off the vehicle instead of the usual 6 or 7 years most people do...

[mtr3s]

6-7 not usual at all. 60 month is standard term.

[M3GymNut]

Originally Posted by mtr3s

6-7 not usual at all. 60 month is standard term.

60 month is the "standard" term yes but the more common buyers do is extend it to 72 or 84 so they can lower their payment. Definitely here in Miami.

[mtr3s]

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.

[RR-NYC]

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.

[dcg8r]

Originally Posted by RR-NYC

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.

Originally Posted by RR-NYC

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.

Did you get a good price for your trade? How much was the X3MC with all the incentives and discounts?

[aerostar]

Originally Posted by mtr3s

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.

72 or 84 is fine if you get 0.9 or 1.9 in my opinion.

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.

[RR-NYC]

Originally Posted by dcg8r

Did you get a good price for your trade? How much was the X3MC with all the incentives and discounts?

I ended up with -$4000 equity on the x5 which was fair for me considering it needed brake pads on all 4 corners, 4 new tires, and wheel repair

[dcg8r]

Originally Posted by RR-NYC

I ended up with -$4000 equity on the x5 which was fair for me considering it needed brake pads on all 4 corners, 4 new tires, and wheel repair

Originally Posted by RR-NYC

I ended up with -$4000 equity on the x5 which was fair for me considering it needed brake pads on all 4 corners, 4 new tires, and wheel repair

Not too bad. How much did you get the X3MC for? I'm contemplating the same.

[RR-NYC]

Originally Posted by dcg8r

Not too bad. How much did you get the X3MC for? I'm contemplating the same.

10% off a $82145 sticker + $6500 in rebates. 2.9% through bmwfs

[mtr3s]

I am surprised that BMWFS did not offer a better rate on a new car. I am paying 2.9% now on my used M4 finance.

[dcg8r]

Originally Posted by RR-NYC

10% off a $82145 sticker + $6500 in rebates. 2.9% through bmwfs

Originally Posted by RR-NYC

10% off a $82145 sticker + $6500 in rebates. 2.9% through bmwfs

Dang! That's what I paid for my F80 four years ago!