Should I/Can I put down payment for BMW Owners Choice program

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1

Hi Hacker

Can I put down payment with BMW Owners Choice program?

If yes then is there any disadvantage? I understand we should not put down payment with traditional lease because risk of car totaled, however owner choice is kind of loan so is it different?

Should I buy GAP insurance for owner choice as well?

Thanks guys

2

good question, I have the same question since I will not keep the vehicle for sure.

3

It is a loan, so there are two possible reasons to do this. One would be if you can get a lower interest rate by putting money down. When I got my Owner’s Choice they did not reduce the rate based on downpayment, but YMMV. Second is that prepaying will reduce total interest cost, if they allow prepayment without penalties. My contract seems to indicate that this is possible, so if your time value of the money is less than the interest cost then you may want to prepay.

4

I don’t plan to keep the car after 2 years so prepay option is not what I want to do.

Let’s take an example like this: The car price is 40k, RV is 30k, interest + tax and other fees if I don’t put any down payment is 5k. Hence my total “lease” cost is 15k.

Now if I put 10k down, then principal balance is 10k less than zero down case, so maybe total interest is lower that can help to lower total lease cost to e.g. 14k. Is it possible? Any risk if I do this?

5

Obviously you shouldn’t pay more than the total amount of your 24 monthlies. I don’t know how they would count that, probably should call.

6

I’m curious about GAP coverage as well on owners choice? Should that be added and does BMWUSA offer it, or is better to purchase third party?

7

I was told by the finance guy in the dealer ship the BMW Doesn’t need a GAP below 80% LTV. He declined mine straight.

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