Owner's Choice

[KMIII]

Can someone please explain all the details of Owners Choice for a new M3? Thanks!

[King Tut]

Are you talking choice or circle? If ur talking circle than it is a place to track ur car while it is being built. Afterwards it is useful to get instructions and manuals for your car.

[Jaypod]

I think he is refering to the Owners Choice finance option? Sort of like a lease. There is a balloon payment at the end of the term similar to a lease, but you are on the hook for the balloon vs. a lease you can walk away from it. Usually the balloon is below the market value of the car so it gives you the flexibility to trade it in vs. buy it out.

Not sure if thats what you mean, but thats what its called in Canada

[King Tut]

Yeah I forgot about the Owner's Choice leasing:

http://fs.bmwusa.com/BmwFsPulp/VEHCHO_OwnersChoice.htm

[KMIII]

Thanks for the info, still pretty confused about it. I understand that you can sell your BMW back to the dealer after the term is over. What determines the price that the dealer will pay you for the vehicle? Will they pay market value? or the total price of the car minus the payment you have made throughout the term?

Here is a scenario: If I use OC as an option and I make payments of $1206 a month with a $5000 down payment on a BMW M3, in 36 months that will put me at $48,416. That is how much I paid so far. So with OC, I can sell my car back to BMW after the term? What will I get for my car and what other costs are involved? Since that $48,416 that I paid is the depreciated value of the car, will BMW buy my car after the term for the MSRP minus the depreciated value?

Sorry, I dont quite understand the fundamentals.

[gobuffs]

OC is exactly like a lease, but is advantageous in Texas due to taxes on a traditional lease. It doesn't work any different than a lease. At the end you pay the balloon or walk away.

[Jaypod]

Originally Posted by gobuffs

pay the balloon or walk away.

By walk away you should clarify. You are on the hook for the balloon as you are financing, not leasing. The balloon give you a lower monthly payment. When the balloon is due, you an sell the car (to the dealer or otherwise), If you are short of the balloon you owe the balance if you sell it for more than the balloon the equity is yours. I didnt check the link that King Tut provided but I am sure it mentions this. I assume its the same as Canada.

[gobuffs]

Originally Posted by Jaypod

By walk away you should clarify. You are on the hook for the balloon as you are financing, not leasing. The balloon give you a lower monthly payment. When the balloon is due, you an sell the car (to the dealer or otherwise), If you are short of the balloon you owe the balance if you sell it for more than the balloon the equity is yours. I didnt check the link that King Tut provided but I am sure it mentions this. I assume its the same as Canada.

Owner's choice (in the US) is only available in IL and TX due to the state laws regarding leasing. The vehicle is registered in the name of the person leasing it to avoid certain taxes. At the end of the term the person leasing can "sell the car back to BMW at a predetermined price". Sounds exactly like being able to walk away to me, although the paperwork may be a bit more.

Maybe you are confusing BMW Select where the car is financed with a balloon at the end that you either finance the balloon or pay the car off- those are your only 2 options.

[Jaypod]

Originally Posted by gobuffs

Owner's choice (in the US) is only available in IL and TX due to the state laws regarding leasing. The vehicle is registered in the name of the person leasing it to avoid certain taxes. At the end of the term the person leasing can "sell the car back to BMW at a predetermined price". Sounds exactly like being able to walk away to me, although the paperwork may be a bit more.

Maybe you are confusing BMW Select where the car is financed with a balloon at the end that you either finance the balloon or pay the car off- those are your only 2 options.

We dont have Select here, so maybe its different as a result. In Canada the balloon payment is predetermined but the value at that point is not guaranteed by BMW - so you could be on the hook for the differential.