If you put $30K down on a 84mo conventional, it lowers the payment from $1695 to $1274.
When you put $30K down on a 24mo balloon loan, it lowers the payment from $1744 to $399.
IMO… not enough value to spend $30K to save $400/mo… but here you go
2022 PORSCHE TAYCAN AWD 4D SEDAN 4S
Conventional financing 84mo 5% $1,274 /mo with $30K DAS
Keep for 2 years, you will pay $1,274x24 + $30K = ($60,576) and buyout for $67,395
Based on 2020 Taycan on Manheim, you sell it for $123K and clear $55,605
Your total cost of ownership is $4,971.
Your effective payment is $207/mo.
Folks, as per first message in this thread in BL you are usually on the hook for balloon payment, but I’ve checked Hanscom and CapEd programs and they both actually say that there is option to turn car in. Is this more of exceptions or kind of new turn?
And another question, basically because of this clause, now you are dealing with mileage restrictions. But if I let’s say plan to keep car or let’s say sell in 2 years and I think it will have positive equity, then it makes sense to choose lowest miles tier to get better rate ?
Other than Tesla are there other EV’s with better RV’s? Originally was looking at the Ioniq 5 as it checks a ton of boxes for me, but with a RV below .50 it doesn’t seem to work as well with the baloon loan program. I’d be getting the $7500 tax credit but with payments north of $800 per month it’s a little tougher pill to swallow.
The ideal scenario to me seems to be balloon loan for 2 years and claim the tax credit, but the RV doesn’t make sense to me or doesn’t seem to capture the actual market value well.
We have discussed the AFG vehicle return rider here before. If you are following the provided guidance, and targeting vehicles which will return positive equity at the end of your holding period, then there is no benefit in a vehicle return option.
I would not keep a vehicle financed by a balloon loan for more then 2 years. I suggest always opting for the lowest mileage, since you will be selling the vehicle at the end of your payment term.
A major benefit of the balloon loan is that you can recapture the difference between residual value and market value at the end of your payment term. I think you will find no lender offers actual RVs in the current market climate.
60 months is not a optimal term to use with a non-captive balloon loan. The recommended options are 24months with a large down payment or 72months with no down payment. Keep in mind the payment term is different from how long you plan to keep it.
You should note that BMW program has a lower buyout because it uses a lower RV, which means even though the rate is lower, the balance the interest is applied against is larger. Versus the non-captive programs, which are using a higher RV, meaning you are paying less during the payment term (smaller payments).
Since a balloon loan is usually 1% higher then a conventional loan, when you get into the 72 and 84 month terms, total cost of ownership usually favors the conventional loan if you hold for that entire period. Also, the variability of vehicle resale value is much greater after the 2nd year and thus harder to predict.
I guess it’s probably a good thing I wasn’t online much a few months back or I’d very likely be in a TRX right now. It’s late and there’s a lot to take in here, but this looks promising.
Tesla Model X Plaid ($142K OTD) - Financing Comparison
Balloon Loan
24 mo financing at $723/mo with $50K DAS
Keep for 2 years you will pay $723x24 and buyout for $82,656.36 (Interest paid: $7,283)
Based on Manheim results, you sell it for $125K.
Total cost of ownership is $67,352, sale returns $42,344 in positive equity
Effective payment is $1042/mo.
vs
Conventional
84mo financing at $1,225/mo with $50K DAS
Keep for 2 years, you will pay $1,225x24 and buyout for $67,804.35 (Interest paid: $5,218)
Based on Manheim results, you sell it for $125K.
Total cost of ownership is $79,400, sale returns $57,196 in positive equity
Effective payment is $925/mo.
