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E90 M3 (Sedan) | E92 M3 (Coupe) | E93 M3 (Convertible) (2008-2013) {Engine: S65 - Max Hp: 414 hp (420 hp Euro) at 8,300 rpm / 295 lb/ft at 3,900 rpm}


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Old Wed, May-06-2009, 08:27:48 PM   #1
Mookster
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Default Is BMW Select/Balloon financing a bad option?

Hey guys,

Your thought of BMW Select financing? Here are the "benefits" of it:

Benefits of BMW Select:

Low monthly payments like a lease and still own your BMW? If you like what you just read then this unique and flexible program is for you!

Please note that BMW Select is not available in IL, MD, NC, NH, NV, PA, and TX. Please visit your favorite BMW Center for special alternative financing options.



How it works:

Just make low monthly payments for a time period that you establish up front. At the end of the term, a balloon payment is due. You can choose to refinance the balloon payment amount with BMW Financial Services or complete your purchase with the one final payment. Choose from flexible terms similar to a lease.

Advantages of BMW Select

Lower payments. In states where tax laws make leasing less advantageous, BMW Select allows you to make lower monthly payments so you can enjoy even more car for the money.
Keep your options open. You make lower monthly payments for a set term, as in a lease, and have flexible end-of-term options.
No lease return process to worry about. It's your BMW, so you can personalize it to fit your needs.
No mileage restrictions. We know BMW owners like to drive.
The bond of ownership: Payoff your final balloon. The title will be in your name and your BMW is yours to do with as you please.

http://fs.bmwusa.com/BmwFsPulp/VEHSEL_BMWSelect.htm


Basically, you can get into an M3 with a small or no down payment and keep your payments at $650 for 60 months. After those 5 years, you still owe about $25k which at that point you can finance those $25k or sell the car. If you do want to sell the car, you have to count on your car being worth $25k after years(which is somewhat possible)
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Old Wed, May-06-2009, 08:30:06 PM   #2
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Yes, it is a bad idea.
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Old Wed, May-06-2009, 08:33:36 PM   #3
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Yes, it is a bad idea.
Ok, WHY?

Its basically like a lease without mileage restriction....
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Old Wed, May-06-2009, 08:41:03 PM   #4
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Seems like there has to be a catch

So if your car is worth what u owe left u can just turn it in for something else? So its a cheaper lease

ex. instead of paying 900 a mnth for an m3 your paying 650 and u get unlimted milage and u just give it back when ur ballon payment is due There has to be more to it.
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Old Wed, May-06-2009, 08:43:23 PM   #5
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Mookster, I don't think you'll owe 25K after five years. I think you'll owe a lot more than that.

Usually when things offer to you at a lower month payments comes with higher interest rates and/or bigger balloon payment.

According to your calcuation if you pay 650 dollars a month for 60 months that brings you to 39K, so another 25K will bring you to 64K.

The balloon payment WILL be a lot bigger than that.
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Old Wed, May-06-2009, 08:46:27 PM   #6
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Moreover, are you required to finance with BMW financial services after the term ends? If you are required to and you want to refinance, they'll probably bum rape you on the new terms.
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Old Wed, May-06-2009, 08:53:29 PM   #7
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Quote:
Originally Posted by 01'325rip View Post
Seems like there has to be a catch

So if your car is worth what u owe left u can just turn it in for something else? So its a cheaper lease

ex. instead of paying 900 a mnth for an m3 your paying 650 and u get unlimted milage and u just give it back when ur ballon payment is due There has to be more to it.
No, you dont get to turn it in, you either have to buy/finance the remaining balance or sell it.
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Old Wed, May-06-2009, 08:55:42 PM   #8
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Quote:
Originally Posted by viingx View Post
Mookster, I don't think you'll owe 25K after five years. I think you'll owe a lot more than that.

Usually when things offer to you at a lower month payments comes with higher interest rates and/or bigger balloon payment.

According to your calcuation if you pay 650 dollars a month for 60 months that brings you to 39K, so another 25K will bring you to 64K.

The balloon payment WILL be a lot bigger than that.
Well, not really....say i could get this:

The car:
E92 M3 Coupe
Space Grey
Fox Red leather
Titanium Shadow Trim
Technology Package
M-DCT
Ipod/USB
Cold Weather package
Alarm

MSRP: $68,875

My price:
$59,725.

And lets just say i put down a grand down....you get 0.9% financing and say in the state where you live there is no tax(Like Oregon)
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Old Wed, May-06-2009, 08:58:00 PM   #9
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Quote:
Originally Posted by viingx View Post
Moreover, are you required to finance with BMW financial services after the term ends? If you are required to and you want to refinance, they'll probably bum rape you on the new terms.
Im not sure if you're required to finance with them or not....it'd be stupid if you had to but i doubt thats teh case
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Old Wed, May-06-2009, 09:04:27 PM   #10
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So that's the thing I think you need to find out right? Your BMW Select term. How much of it are they letting you finance, which is the same to how much of it will be left as a balloon payment.

Always remember that they're in this to make money.

Your initial five years plan with BMW select might only be accounted for 40% of the car value.
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Discussing Is BMW Select/Balloon financing a bad option? in the E90 M3 (Sedan) | E92 M3 (Coupe) | E93 M3 (Convertible) (2008-2013) Forum - {Engine: S65 - Max Hp: 414 hp (420 hp Euro) at 8,300 rpm / 295 lb/ft at 3,900 rpm} at BMW M3 Forum.com (E30 M3 | E36 M3 | E46 M3 | E92 M3 | F80/X)