Currently going back and forth between 2 dealers on 2024 i4 M50 with MSRP around $75-77k. I am in Phoenix AZ
One dealer is giving 10.5% on a new M50 and other is giving 15% on a Demo (likely Sales Mgr) with 5000m and about 6mths old.
Anyone have experience with buying Demos as this seems a bit weak at just an extra 4.5% for 5000 miles, I would have expected closer to 10% more so around a 20% discount.
Thoughts?
FWIW the NEW car is 1st choice interior (Tacora) and 3rd choice exterior (Brooklyn)
Demo is equal 1st choice exterior (Portimao) and 3rd choice interior (Cognac, which I have now)
Have you tried countering with 20% off? Plug the numbers into the calc and present a target monthly/DAS.
I’m gonna guess this is a BMW I4?
In 2013, I remember a sales guy telling me to GTFO from a showroom when I asked for 20% off.
Just reading your post being made in all seriousness as if it’s NBD is so jarring to realize how much the EV pricing is all manner of screwed up. Plus there’s $7,500 juicy taxpayer money stacking on top of this front end. On a BMW that by all review is an amazing vehicle. The 4 series is no EQE.
20% for a loaner isnt out of the realm of possibility. Its definitely unrealistic on a new i4
Some places the 35 or 40 trims benefit from state rebates (typically capped by MSRP) and make for decent leases.
But the i4 programs themselves from BMWFS are quite unappealing and the 50 is easily the worst.
You should post a LH calculator link for a loaner (with how many miles?) at 20% off to see how the numbers look before actually making any offers.
So I did counter with 20% and a bunch of extra stuff to see how far they would go as it is a Demo with 5000 miles and was put in service in Nov2023 so I have lost 6 months and 5000m of warranty.
They agreed to $15,000 discount = 19.5%
Note that I was NOT actually doing a lease, but doing BMW Select mostly so I could use trade-in equity with risking it in a lease.
Hence why it is only $6000 in rebates ($5000 APR + $1000 loyalty) and not $8500 (which is technically close to $7500 due to $995 fee)
That’s a terrible idea TBH, unless you are ok with owning the car until it hits a fair market value of sub $25k.
There must be a better way of monetizing your equity.
So, before making sweeping judgements maybe ask WHY I chose that option.
As some background I have been buying cars for 40 years in 3 different countries, and have worked in Product Planning for 6 years out of Uni for GM, BMW as a test driver and in sales/service at a US dealer for 4 years.
So I am very familiar with what a “balloon” finance option is.
In answer to your un-asked question, we have reserve money to pay for this car cash just sitting in a Fidelity money account that makes 4.99% with interest paid weekly with zero risk.
The APR “Balloon” loan from BMW is 2.99%
So basic accounting shows that by using BMW Select “Balloon” financing I “make” 2% at the moment and if interest rates drop to below 2.99% then I simply pay off the loan.
Doing a “Balloon” does indeed defer your financial situation and you are unlikely to get ahead of your residual value but if you want a lower payment for now it is an option if you understand the implications.
BTW, below are the FULL details that show “Balloon” versus regular finance and both ways save you $$ on taxes by using your trade equity.
Finally, if you are smart you negotiate with your trade and dealers can use increase trade value to out do another dealer who is matching on price
PS: - when your wife says the new car cannot be a higher payment than current car then this “balloon” loan allows you to get yourself a new 2024 i5 M50 when you trade in your 2022 330e
My guy… it’s Saturday night. Crack open a cold one and research all the great things about the M50 that’s about to be in your garage.
Interest income is taxed at your full marginal tax rate, you pay interest with after tax dollars, so the after tax differential is more like 1% or less. A quick search also suggests AZ taxes lease payments only, not upfront sale price, so I don’t think there’s any sales tax benefit either. So you assume all the depreciation (big on an EV) for no upside as far as I can tell.
That’s a million words that missed the entire point: depreciation.
Is the BMW balloon like the Audi where you can turn it back in at the end kinda like a lease? I forget what Audi calls their ballon where you can see if you have equity (or negative equity) at the end and choose to keep it and pay off the balloon or just turn it back in and walk.
Found it - Audi Premier Purchase
https://www.audicolumbia.com/audi-premier-purchase.htm
Looks like BMW offers Owner’s Choice which is closed ended but it looks like it is only available in certain states - IL, TX and GA
Isnt sales tax going to wreck the savings? You have to pay tax on the full sales price (like 8% or whatever in phx/scottsdale.
With a lease you only pay tax on the monthly payment.
You also dont get the lease credit with a balloon finance.
Lease this, dont buy. Buy your wife something nice from Fashion Square and she’ll let you have a higher monthly payment.
Yep, tax on the NET sales price after trade-in
With an approx $17k of equity in the trade no way I was putting that in a lease as too risky (lost $3k on our 3rd car that was t-boned after only 10 months)
There is a $5k APR rebate and loyalty so if you factor the almost $1000 acquisition fee on leases you lose out on around $1500 in rebates but your APR is lower than on a standard lease at 3.99% compared to 5 or 6% on lease depending if they want to mark it up (excludes putting down 7 x MSD’s which I did investigate)
All in all it works for us in our circumstances. If I had no trade I would 110% have done a lease.
As it happens I actually did NOT buy this M50 because I was NOT leasing and wanted the full warranty and new tires. Also color combo and vehicle options of car I bought worked out better for me
You never have to put trade equity into a lease or any other finance deal. You can simply ask the dealer to cut you a check for the difference. You still get the tax advantage of the full trade value. At least that is how it works in MD. With that much equity you could have likely done close to a one -pay lease or used some of the equity to make MSDs that would have dropped the MF even further. Not to mention that on the BMW Select program you are responsible for any negative equity when the ballon comes due. You either make the ballon payment or sell the car for whatever you can get. Leasing an EV is the ONLY way to go in this market. Too much residual value risk otherwise. Why do you think they were willing to give you 19.5% discount?
have indeed been enjoyed this evening mate so all good.