Trading in BMW Select car before term is up?

[resdm50]

Hey guys,

I currently have an early 2011 e92 M3 that I have financed with BMW Select. with the rates on the new '12 M3s, coupled with the new standard features, I've been thinking of ordering a new '12 and trading in my '11.

Question is, how does that work with BMW Select? Would the balloon payment come in to play in the trade? Would there be any other restrictions?

Any help would be appreciated.

[JulieDriving]

Whoa, that's going to hurt. If I'm not mistaken, you are on the hook for the full price of the car. Expect that a giant balloon payment is due after the first couple of years of small payments.

The difference between what you still owe on the car (which includes the taxes in addition to the price of the car) - minus the value of your car (which is going to take a hit precisely if the '12 have attractive rates, etc.) will be rolled into your new debt.

EDIT: You take a hit no matter what trading in a car so soon. Who's going to take an early 2011, if they can take a new 2012, if there are new features, the rates are good, etc. Not saying don't do it, but be prepared to take a bit hit. If you've only been making small (Select-type) payments on the M3 so far, you have not paid much of the debt off at all. Unless you put down a big down payment, chances are you'll be upside down on the loan compared to the value of your '11 M3 now.

[F82_SID]

I am a BMW select owner as well and I can tell you that the select financing has nothing to do with your ability to trade in the car. It is exactly the same as traditional financing except you have smaller payments for the first couple years and then owe a large chunk at the end (which you can also refinance).

Whatever the trade in value that you get for the car just goes to pay off the balloon and loan remainder. The only problem is that you will most likely be upside down on your current car unless you put a nice chunk down when you bought it. That is just a result of trading in a car that is only a year old. I dont know the mileage of your car but I would guess that the trade in value of your current car is probably around 60k. Assuming a purchase price of 75k with 5k down than you will still probably be upside down 10k. Put that on top of the price of a new 75k 2012 M3 and you are at 85k. I bet that even with the best rates that you will still see a huge increase in payment.