2011 Finance Rates are out. Also facts on BMW Select and balloon financing

[outie]

Originally Posted by comebackid

Here is what I came up with from the Pendfed auto save calculator found here:

https://www.penfed.org/productsAndRa...Calculator.asp

I just plugged in my loan amount of $48,000. Here is what I got:

MSRP: $74,525
Loan Amount: $48,000
Auto Payment Saver Rate: 4.24% APR
Conventional Auto Rate: 3.99% APR

These payment estimates are based on the MSRP of the vehicle selected. If you'd like to recalculate these payments on your expected purchase price and for the same vehicle, enter the amount below.

Term Payment Saver

24 Month $215.60 Balloon Due: $47,065.60
36 Month $407.09 Balloon Due: $39,307.09
48 Month $454.03 Balloon Due: $33,604.03
60 Month $469.81 Balloon Due: $28,444.81

Can you elaborate on how making extra payments later on will have an effect on the balloon? Trying to see if this a good alternate solution for me. Thanks.

[comebackid]

Originally Posted by outie

Can you elaborate on how making extra payments later on will have an effect on the balloon? Trying to see if this a good alternate solution for me. Thanks.

Well let me use my dealer's calculation. The dealer gave me a rate of 5.99%.

She plugged the numbers in and got:

$70,000 for the car (This includes everything - my cost, tax, tags, etc.)
$20,000 down payment
$50,000 loan
574.49 per month for 60 months at 5.99%
$28,129 for the residual (balloon)

When all is said and done, you will end up paying $82,598. That's $12,598 in interest.

Now using the same rate of 5.99%, a traditional loan would have you make payments on a $50,000 loan with $20,000 down of $966.41 per month for 60 months.

When all is said and done, you will end up paying $77,984. That's $7,984 in interest. So you will save about $4,600 if you do it this way as opposed to the balloon.

Remember that you're still paying down interest on the balloon which is why it costs more. That's why you should research extensively before you do.

Now remember also that 5.99% is robbery. PenFed will offer 4.24% for the balloon program. So the savings will be around $4,800 as opposed to BMW Select.

Ah. But the plot thickens. My SA just e-mailed me the program for April. The rate dropped to 4.79%! Still going with PendFed, but if the program for May can hit 3.9%, I'll jump on it. That's why I pushed my delivery date a few extra days to see if I can get something for May. Plus I keep my $350 disposition fee on the lease return.

Good luck.

[duk]

i think penfed all the way still

[lux]

Originally Posted by duk

i think penfed all the way still

Try Bank of America. Just checked their website-- as low as 3.2%!!

http://www.bankofamerica.com/vehicle...ate=auto_loans

[comebackid]

Originally Posted by lux

Try Bank of America. Just checked their website-- as low as 3.2%!!

http://www.bankofamerica.com/vehicle...ate=auto_loans

Saw that. Great rate. Unfortunately they do not offer balloon financing.

[ssabripo]

Originally Posted by comebackid

Saw that. Great rate. Unfortunately they do not offer balloon financing.

but you just posted a good reply about balloon vs nominal loans...

[Technic]

Originally Posted by comebackid

Well let me use my dealer's calculation. The dealer gave me a rate of 5.99%.

She plugged the numbers in and got:

$70,000 for the car (This includes everything - my cost, tax, tags, etc.)
$20,000 down payment
$50,000 loan
574.49 per month for 60 months at 5.99%
$28,129 for the residual (balloon)

When all is said and done, you will end up paying $82,598. That's $12,598 in interest.

Now using the same rate of 5.99%, a traditional loan would have you make payments on a $50,000 loan with $20,000 down of $966.41 per month for 60 months.

When all is said and done, you will end up paying $77,984. That's $7,984 in interest. So you will save about $4,600 if you do it this way as opposed to the balloon.

Remember that you're still paying down interest on the balloon which is why it costs more. That's why you should research extensively before you do.

Now remember also that 5.99% is robbery. PenFed will offer 4.24% for the balloon program. So the savings will be around $4,800 as opposed to BMW Select.

Ah. But the plot thickens. My SA just e-mailed me the program for April. The rate dropped to 4.79%! Still going with PendFed, but if the program for May can hit 3.9%, I'll jump on it. That's why I pushed my delivery date a few extra days to see if I can get something for May. Plus I keep my $350 disposition fee on the lease return.

Good luck.

The numbers don't add up... either the Select Program drastically changed or somebody is "confused" here.

The correct payment for those numbers is $421.21 at 5.9%, 60 months. There is no interest paid for the Balloon during those 60 months. In other words, only $22000 of those $70000 will be financed for that 5.99%, not the whole $50000.

My 2008 M3 is financed thru the Select Program at 60 months/0.9%/33% Balloon and my numbers matched what the dealer/BMW Financial ended up putting together by $6.00 and change.

Something is definitely not correct here...

[comebackid]

Originally Posted by Technic

The numbers don't add up... either the Select Program drastically changed or somebody is "confused" here.

The correct payment for those numbers is $421.21 at 5.9%, 60 months. There is no interest paid for the Balloon during those 60 months. In other words, only $22000 of those $70000 will be financed for that 5.99%, not the whole $50000.

My 2008 M3 is financed thru the Select Program at 60 months/0.9%/33% Balloon and my numbers matched what the dealer/BMW Financial ended up putting together by $6.00 and change.

Something is definitely not correct here...

Technic,

First off, congrats on the 0.9%. I can only wish.

I'm a little confused myself. I'm not sure where you got $22,000 from, but the bottom line is you're paying interest during the balloon. I think in your case it won't appear that way since you are getting a less than a 1% loan. So it's practically free money.

Here is another balloon calculator I found:

http://www.theconvertersite.com/fina...calculator.php

I plugged in all my dealer's numbers.

$70,000 = vehicle value
5.9 = interest rate
60 = months
$20,000 = initial deposit
$28,129 = balloon payment at end

When you plug in those numbers, you get $560 per month. About $14 off of my dealer's calculation. By the way. It's possible I may have missed something on my calculation for the total price of the car. Could be closer to $71,000. She didn't break down the final final price. But the bottom line is $560 - $575 per month.

Also note that the residual is 38% for the current BMW Select program. Yours was 33%. Then you obviously have to factor in your total loan amount.

[outie]

There is no interest paid for the Balloon during those 60 months. In other words, only $22000 of those $70000 will be financed for that 5.99%, not the whole $50000.

From my understanding, you do pay interest on the balloon. If you don't, that means BMWFS just lent you whatever the residual is for free. That does not make sense. It is not a lease.

[Technic]

Originally Posted by outie

From my understanding, you do pay interest on the balloon. If you don't, that means BMWFS just lent you whatever the residual is for free. That does not make sense. It is not a lease.

That's exactly what they did, at least for me.

My finance charge for the 60 months of my loan is $1924.67, my downpayment was gone in taxes and a couple of fees, nothing more. That will be impossible if the Balloon was also financed, and that's what is written in the BMW Financial contract that I signed.

The way I came up with my numbers before going to the dealer was simple:

Downpayment + Balloon = total downpayment

Use that total in the finance calculator and the rest of the numbers and taxes and get your payment. I got my payment within $6.00 of my number, but that were the happy days of late 2008.

This is not the first time that I read about "financing the balloon". Either the dealers/financing company are "confused" or they are doing it on purpose as the new computational rule, which in these messed up financial times could be the new way indeed. The Select Program was supposed to be exactly like a lease, with the caveat that all responsabilities after the payment period are of the owner and not the leasing company.

[trendy26]

Technic - Can you message me where u bought your car from, so I can go to a dealership that will correctly calculate this thing????

Im in Ft Lauderdale as well.

[Technic]

Originally Posted by trendy26

Technic - Can you message me where u bought your car from, so I can go to a dealership that will correctly calculate this thing????

Im in Ft Lauderdale as well.

I can tell you right here, South Motors BMW in Miami... remember, that was late 2008. You should call BMW Financial and ask them what's the real and current deal with the Select Program and the Balloon payment.

That's what I did.

[comebackid]

Originally Posted by Technic

I can tell you right here, South Motors BMW in Miami... remember, that was late 2008. You should call BMW Financial and ask them what's the real and current deal with the Select Program and the Balloon payment.

That's what I did.

The rate for April is 4.79%. It was 5.99% in March...

[M-Tuned]

Thanks for all the great info. I realized that I went through Select without knowing the balloon payment until today... yeah I know I am stupid and my SA was very tricky!!
anyways, I am not comfortable paying the $24K balloon payment at the end of 60/months + my interested rate is really high.
I was wondering if it's possible to just refinance the payoff amount which is around $50k through PenFed or BoA? or I will have to refinance everything including the balloon payment?

Thanks for any input!

[comebackid]

Originally Posted by M-Tuned

Thanks for all the great info. I realized that I went through Select without knowing the balloon payment until today... yeah I know I am stupid and my SA was very tricky!!
anyways, I am not comfortable paying the $24K balloon payment at the end of 60/months + my interested rate is really high.
I was wondering if it's possible to just refinance the payoff amount which is around $50k through PenFed or BoA? or I will have to refinance everything including the balloon payment?

Thanks for any input!

Did the SA ever at one point say, "This is going to be what you owe after 60 months?" If not, then that's a tragedy.

I did read on the website that you can walk away without paying the residual. So it can be treated like a lease. Although I think if you're upside down on it i.e. more miles than average, they might make you pay the difference. You might want to look into that.

But if you're dead set on buying it, then you can pay the payments then the balloon. Pay the balloon in full or refinance (ouch).

OR

Accelerate the payments where you will hardly end up with any balloon. That will be my intention from year 2-5. The advantage of this is, it will be as if you're paying off a conventional loan and not getting hit on the excess interest on a balloon. But if you can afford to do that, then see below.

OR

If the rate you got from BMW was excessive, then you should re finance. I saw PenFed offering 4.24% on used cars. Not sure about BoA. If going this route, then you should contact BMWFS and say that you want to buy the car out right through refinancing at another institution. They should be able to tell you what the full buyout is right now. Then re finance with PenFed or BoA.

[HappyNDing]

Originally Posted by M-Tuned

Thanks for all the great info. I realized that I went through Select without knowing the balloon payment until today... yeah I know I am stupid and my SA was very tricky!!
anyways, I am not comfortable paying the $24K balloon payment at the end of 60/months + my interested rate is really high.
I was wondering if it's possible to just refinance the payoff amount which is around $50k through PenFed or BoA? or I will have to refinance everything including the balloon payment?

Thanks for any input!

Did you not add up your monthly payment for 60 months and see that the numbers are not close to what your M3 really costs? Like somehow BMW only felt like charging you 2/3 of the price because they love to lose money.

[nologic98]

Financing European Delivery?

I'm picking up my 2011 M3 via euro delivery in Munich later this month. I have VIN already, but obviously the car isn't registered here yet, and I'm told this confuses/spooks many lenders.

Can anyone here tell me lenders they know worked with ED (ideally a contact there too!) before I apply for a bunch of loans and unnecessarily ding my credit?

PS. If there's something I'm missing - like if I can pay cash now and still finance the car as a new car once it arrives on US soil - please let me know. Thanks!!

[nologic98]

Update: penfed said they could handle it. so I applied there. We'll see...

[EJ_92606]

Originally Posted by outie

From my understanding, you do pay interest on the balloon. If you don't, that means BMWFS just lent you whatever the residual is for free. That does not make sense. It is not a lease.

You pay interest on the residual on a lease as well.

[comebackid]

Wow! I went in to pay for my car today since I'm taking Euro delivery next week. Just got a call from the finance guy. 3.9% for MY2011 for the month of May!

If you guys recall, I was doing a balloon loan through PenFed at 4.25%. Looks like I'm returning that check. Now I can go through BMW Select. Plus I get my $350 disposition fee back (lease turn in). What timing! I delayed my production of the car to try to squeeze another month (May) if BMW would offer a competitive rate. And they did!

And to think. 2 months ago it was 5.99%...

[IbanezGod]

Originally Posted by nologic98

Financing European Delivery?

I'm picking up my 2011 M3 via euro delivery in Munich later this month. I have VIN already, but obviously the car isn't registered here yet, and I'm told this confuses/spooks many lenders.

Can anyone here tell me lenders they know worked with ED (ideally a contact there too!) before I apply for a bunch of loans and unnecessarily ding my credit?

PS. If there's something I'm missing - like if I can pay cash now and still finance the car as a new car once it arrives on US soil - please let me know. Thanks!!

I have he same question. Have not been able to find a lender who will finance ED without MSO. I've come to the conclusion that eD you have to pay BMW financing.

Anyone get May financing rates yet? I want to do ED but 6% sucks when compared to BOA ad other lenders

[outie]

Originally Posted by comebackid

Wow! I went in to pay for my car today since I'm taking Euro delivery next week. Just got a call from the finance guy. 3.9% for MY2011 for the month of May!

If you guys recall, I was doing a balloon loan through PenFed at 4.25%. Looks like I'm returning that check. Now I can go through BMW Select. Plus I get my $350 disposition fee back (lease turn in). What timing! I delayed my production of the car to try to squeeze another month (May) if BMW would offer a competitive rate. And they did!

And to think. 2 months ago it was 5.99%...

Good to know it's 3.99%. Perfect timing. The only problem is my p/u is 5/7 and I am flying out on 5/5. It's 5/3 today and the dealer has not contacted me for payment!