WA not sales tax friendly at all. Haha
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$582x60=$34,920 plus $4k balloon
I crossed up my PNW states, I meant Oregon not WA. Reference here is any states without sales tax, or states which may offer a sales tax exemption on certain vehicle types (eg; NJ and EVs)
Gotcha. So if the monthly payment of a conventional loan is not an issue for a borrower (and the interest rate is similar for instance) - there’s not so much benefit to taking a balloon loan over a conventional one?
So it’s simply the leverage of the Balloon to lower the monthly payments mostly.
Hopefully I finally got it right 
This is all great information, I too was really confused about the inner workings of the balloon, but the more I research it the less intimidating they are
Here is an example I worked on today for a
2022 Toyota TACOMA 4WD Double Cab TRD Off Road V6 MT.
_ BL payment at $332/mo with $0 DAS
_ Keep for 2 years you will pay $332x24 and buyouts for $35K
_ Based on Manheim results, you sell it for $37K.
Your total cost of ownership is $5968.
Your effective payment is $248/mo.
Versus
2022 Toyota TACOMA 4WD Double Cab TRD Off Road V6 MT.
_ Conventional financing at $628/mo with $0 DAS
_ Keep for 2 years, you will pay $628x24 and buyout for $26K
_ Based on Manheim results, you sell it for $37K.
Your total cost of ownership is $4072.
Your effective payment is $169/mo.
Although the convention loan yields a lower TCO, due to less interest, it locks up $7104 more equity and requires $296/mo larger payments.
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Dude you just made the argument against balloon loans…anyways. I care about TCO. And how accurate the residual is esp for luxury cars.
The interest cost on balloon loans can be brutal unless you’re getting a really cheap rate because your average daily balance stays high throughout the loan. Just make sure you go eyes wide open into total interest cost difference on balloon vs. a traditional 60 or 72 mo loan. In your example above - $1800 extra over 24 months vs. 7000 “tied up” - that extra 1800 is ~25% of the 7000. What else are you doing with that 7000 that will get you more?
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Here is an interesting deal I found from the hot sheet for a mid size SUV.
2022 Jeep Compass Latitude Lux
_ Well equipped with a $34,000 MSRP
Rodo is offering a 48mo lease for $405/mo and $4080 DAS
_ $725 off MSRP and includes tax
@AutoCompanion is offering a 36mo lease for $486/mo with $486 DAS.
_ 8% off MSRP and includes tax
If you can get this vehicle at the broker price;
_ Conventional financing would be $501/mo with $0 DAS
_ BL program would be $386/mo with $0 DAS.
_ These calculation include 6.625% sales tax and $1000 in additional fees.
Looking for something cheaper??
_ 2022 Toyota Corolla LE AT with a $21,650 MSRP for $277/mo $0 DAS
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I’m trying to understand how a Mitsubishi Outlander is on the list but there are no LR/RR?
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Not too surprised, there are no high end cars on that list, that isn’t really where the bulk of the market is shopping. This is a sell sheet of main stream cars where a balloon might feel better than 84 month traditional loan to a fairly uninformed payment shopper that freaks out seeing the “84” number and not realizing the balloon might be even more expensive in long run.
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Balloon loans aren’t for saving money, they’re to keep payments low. As you clearly understand, not the same thing. 
Compared to a traditional car loan the rate on a balloon product is generally going be higher, and the loan balance is going to be higher for the entire term.
Here’s another example of how to achieve a low payment.
I could transfer money from our HELOC into checking and pick this up today for
$0 a month
for
216 months
(the end of the draw period), but then there I’d sit with an outrageous loan balance and an 18-year old Bentley.
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Welcome to Marin County.
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Or Detroit (but with hellcats)
@z0lt3c Appreciate your thread! This is a wonderful alternative to current lease programs. Do these lenders have issue with balloon financing when registering the car under an LLC? I do this with my leases, but haven’t tried with balloon
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Great thread.
I’ve been Googling but I can’t seem to find a Cali CU that offers balloon payment financing. Which of the out of state ones offer the best rates or maybe a better question is easiest to deal with. 
“Easy to deal with” and “credit union” don’t really belong in the same thought bubble, in my experience… You don’t really go to one for concierge service, you go there for cheap money.
I just suffered significant abuse and neglect at the hands of DCU on a (traditional) auto loan to buy out my lease, but I expected that going in.
In the past 10+ years, this was probably the slowest, most aggravating experience I’ve had on a financial transaction (that wasn’t a mortgage), but I would do it again for this:
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I’m likely going to go with a balloon for the TRX I’ll be keeping. I’ll be putting a big down payment (around 30k). Just trying to figure out if I want a base which would be around 280 a month or a lightly optioned level one which would be close to 390 a month.
This would be for a 5 year term. And I should have equity at the end since the balloon payment will be just over 31k.
On a interesting note, one of the CU website says that the car can be returned after the payments are fulfilled. I’ll have to check with them but that seems pretty low risk if you find yourself underwater on one of these loans. I’m sure there’s a fee for that, but can’t be a bad thing since it adds an extra layer of protection.
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This actually has value which can be compared against the considerable additional interest expense of a balloon product.
One could legitimately ask oneself the question, “Is the cost of the insurance coverage worth the premium charged for the product?” [no pun intended] and then make an informed decision.