Nice… Techno Violet??? It’s not for me but I love that BMW brought it back. I’m dying to see the other colors. Send pics when you get them.
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I’m wondering if a balloon loan using BMW Select or Owner’s Choice financing might be the best solution for me. Someone suggested it on Bimmerpost and it sounds intriguing.
Given that I have some cash to put down and I want a lower monthly payment, but putting large amounts down on a lease is bad news I’d I total it…
I have good income so I would not have a problem with the balloon payment later or could refinance it too.
What advice do you all have on the Select and Owner’s Choice financing? Do they do it in Colorado? Do you think it is a good fit for what I am trying to accomplish? I want to get into an M3 with fairly low monthly payments (under $700) and then imagine I will want to buy it down the line. I just don’t want to do traditional financing right now because it would take a huge down payment for me to get comfortable with the payment.
As always thanks for all the help.
@IAC ? @HersheySweet ? Others?
If you buy a $75,000 car, you’re going to be in the low $80,000s by the time the transaction is finished. With $10,000 down you’ll owe ~$72,000 on the loan.
What do you think will happen to your down payment if you total the car in a year or two and the car is worth $60,000, or $50,000?
Separately, realistically what is the likelihood that you’ll total the car? How many have you totaled in your entire lifetime?
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There’s also gigantic liquidity benefits of not tying up 15k as a down payment for no actual gain as well as the risk in case car is totaled. It is all risk for 0 actual gain. It only hurts you.
This is also frankly a pretty dumb car to lease in general.
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@Bacons_C.C can you please see if you can help him out here? @op for South Florida Bacon is the best guy for bmw deals! Ask me how i know 
Diminished value claims actually work most of the time if you own the car.
You aren’t getting there unless you put a stupid stack down tbh.
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Diminished value claim on a car that’s been totaled?
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Ahahah yeah, got me there!
This car makes no sense in leasing rn, I even got offered a base G80 below MSRP ($1,000 off) before incentives and company perks before settling on an M340i and the lease quotes were still in the high $1300’s with like $7k down on the G80.
balloon payment is the way … $800 with $15k down on an MSRP of $81k last year with tax only on $30k as I had a $50k trade.
It’ll be cheaper regardless and why pay all those fee’s and stuff when the payment saver/balloon payment rates are under 3%.
Tying up large sums of cash on a car is silly.
GL
I checked into the balloon payment, which they call BMW Select. It’s definitely an intriguing program. One dealer said that they don’t like to do them because people get upset and come back to them angry when the balloon payment is due. Which is really pretty dumb. I mean, I guess they didn’t bother to Google what a balloon payment was before buying a car they couldn’t afford? Or maybe they didn’t like the residual left over because they got upside down. Either way, that comes down to being an informed buyer. The program itself seems like a good option if you understand what it is.
The upside is that your payments are lower than a lease. You own the car and all the benefits (and downsides) that come with that. If you get in a fender bender and it shows up on a Carfax, you can’t just return it at lease end. You have to own that blemish on the record and the value depreciation that comes with it.
They offer 36-60 month duration balloon programs. Just like a lease, the lowest monthly payment comes with the 36 month, but then you have a bigger balloon payment since the balloon payment is basically the residual.
They don’t charge interest in the balloon payment before it’s due, so that’s cool. You can take out the 36-60 month loan on the up front value of the car, don’t carry any interest in the balloon, and then when the payment is due you can refinance it into a traditional loan.
There are definitely ways for this to go sideways if you can’t afford it and just use the balloon to get yourself that M5 you wanted thinking you’ll hit the lottery… you can afford the payments for 3 years, and then suddenly owe $60,000 on the car which may or may not be more than the car is worth. Then you scramble to refinance it and all you can afford is an 80 month loan. The slow payoff means the car is losing value faster than you’re paying it down. It ends badly with someone very upside down in the loan.
In a more favorable scenario, which I’m looking at, I can do a balloon for 36 months and then refi the car into a 5 or 6 year loan at a low interest rate. With enough money down I can be sure I’m never upside down in the loan.
The dealers I spoke to were charging from 4.5% to 7.5% interest on the initial payment (while the residual payment that will become due sits at 0% APR).
One interesting part about these loans is that the payments are lower for shorter loans. Just like leases, it has to do with the residual curve.
Here are actual quotes from a dealer that was charging the higher 7.5% rate on the balloon.
They are doing a $7,500 markup over MSRP
They might even include one of those cash grab BS packages like the “Colorado package” which forces you to buy a clear bra and tint at a markup.
Car purchase price around $80,00 plus about 8% tax
$42,000 down payment
36 month balloon
$533.28 monthly payment
APR 7.55%
$42,825.15 balloon payment due at
60 month balloon
$680.73 monthly payment
APR 7.3%
$28,138 balloon payment due at 60 months
Here is the traditional loan they offer…
60 month loan, 4.99%
$1,012/month after the $42k down
Either way, there is no prepayment penalty for any of these so you can always refinance for better rates. You just need to wait a few months to be sure you get the incentives like loyalty cash, new grad, etc. Otherwise BMW will take them back if you refi too early. A few lenders offer balloons but not many.
I hope that helps. One thing I learned is that very few people take advantage of the Balloon program. I think it’s the risk of not having the option of turning it back in like a lease.
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Coming back to this quote… After all my shopping around and trying to find a deal that doesn’t totally suck, I think these words are just simply the truth. The rational thing to do is just chill out, hold on to what you have and just don’t participate in this ugly market right now.
But when it comes to cars and motorcycles I’m not a rational person. I love new, and I love upgrades from what I had before. I can afford the M2 or M3 that I’ve always wanted. But while I can finally afford the car, I want, the timing sucks. I’ll try to get the best deal in the current market but it will suck. So there it is… I’m going to take a kick in the balls and then drive off loving my new car.
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Just curious, is there a Colorado dealership that you find your customers like dealing with, or one that you prefer? I’ve bought from Boulder and Loveland. I’m checking out Downtown. Schomp is selling the 3rd highest volume in the country in an effort to get more allocations, but they are applying a markup of $7,500. As nice as they are, I won’t pay the extra $7,500 when the cars down the street aren’t ADM.
I’ve also made some call to San Antonio, Tuscon, and Scottsdale since they aren’t too far…
SA is 10K ADM out of PMA.
Boulder seemed pleasant enough to deal with on past encounters.
Also in CO as well, I think @joeblogs has a Denver area dealer he had a good experience with. Hopefully he can chime in here!
Maybe I’m old school as I already have a lot of money invested in stocks and RE so I have paid cash for my cars for a long while but if people are so worried about monthly payment amount, etc. maybe they really can’t afford the car and should just wait until they truly can…I’ve always been financially/budget conservative tho.
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Borrowing still cheaper than inflation.
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I get it but I had a different path. in my early family days we couldn’t really afford a house but we had ok income so we borrowed. House appreciated and we paid it down. Started to build some security. Meanwhile I couldn’t afford to buy anything but a used car so I started leading reasonable cars like a Jetta, a CC, the. Saab, made it up to a Jaguar and then the BMW. I’ve always gotten used to a monthly payment and I prefer to walk away and get something new every few years. Never been a fan, or had the means until recently, to buy a car outright. Especially the nicer cars I want.
Anyway, there are a few black and white financial issues but there is a ton of gray area about what’s best depending on a person’s goals.
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I’ve bought 6 cars from the Gebhardt dealerships so far and I like them. I work at the local hospital and they actually donated a VW Tiguan to us to drive around and vaccinate folks that needed outreach like folks living on the street. Good people. I was there last week and they tossed me the keys to take this for a spin and it was loud n fast. The previous owner loaded it with performance upgrades and it was FUN. https://www.gebhardtbmw.com/all-inventory/index.htm?make=BMW&model=M4&trim=Heritage%20Edition%20(1%20of%20750)
I use their service department no matter what. However for sales right now they aren’t very attentive. They don’t return calls, not really answering questions. Maybe it’s staffing.
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