[Nolebimmer]

What is the current programming for BMW Select Financing?

[MdMcoupe]

Originally Posted by Nolebimmer

What is the current programming for BMW Select Financing?

What are peoples feelings on BMW Select?

How does this work exactly? I planned on putting ~20k down to keep my monthly payments low.

BMW Select promotes low monthly payments at first, and then you renegotiate after a couple years based on the cars value....?

[Nicname]

Originally Posted by MdMcoupe

What are peoples feelings on BMW Select?

How does this work exactly? I planned on putting ~20k down to keep my monthly payments low.

BMW Select promotes low monthly payments at first, and then you renegotiate after a couple years based on the cars value....?

Interested as well. Was looking to trade in my car and use about $30k into a down payment to keep payments super low

[MdMcoupe]

Originally Posted by Nicname

Interested as well. Was looking to trade in my car and use about $30k into a down payment to keep payments super low

I was really hoping we could get some insight on how this program works from some fellow members.

In about 2 hours I am leaving to put (hopefully it all works out) a deposit on an M2. I am going to ask for more details about the "Select" program.

[Bimmer28312]

I believe a fellow member said he had a balloon payment of $19k after 60mo

[Msmall143]

Originally Posted by MdMcoupe

What are peoples feelings on BMW Select?

How does this work exactly? I planned on putting ~20k down to keep my monthly payments low.

BMW Select promotes low monthly payments at first, and then you renegotiate after a couple years based on the cars value....?

you dont renegotiate at all. you either pay the baloon payment and keep the car, sell the car or trade it in and pay off the baloon payment, or finance the outstanding balance of the car with another lender

[M Heart]

Exactly as Msmal143 stated. BMW Select its designed for people who would like to have a lower monthly payment for "X" amount of time but do intend to keep/buyout the car at the end of "X" term. You would have a balloon payment due at the end of "X" term and there's no way around it or "re-negotiate" as it is more like a "close ended lease". Best, perfect example I could use for someone who should/could benefit from this program its, lets say you're working a post-grad degree, doctorate, or the like, you want to the own the car and not lease it, but your current cash flow its not at where it would be down the road, so you want lower monthly payments now and would pay your balloon payment at the end because you should be financially ok by then.
I hope my scenario (not very well written, i know) made some sense to you guys

[blackholescion]

Originally Posted by Msmall143

you dont renegotiate at all. you either pay the baloon payment and keep the car, sell the car or trade it in and pay off the baloon payment, or finance the outstanding balance of the car with another lender

You can finance the balloon with BMWFS.

[Msmall143]

Originally Posted by M Heart

Exactly as Msmal143 stated. BMW Select its designed for people who would like to have a lower monthly payment for "X" amount of time but do intend to keep/buyout the car at the end of "X" term. You would have a balloon payment due at the end of "X" term and there's no way around it or "re-negotiate" as it is more like a "close ended lease". Best, perfect example I could use for someone who should/could benefit from this program its, lets say you're working a post-grad degree, doctorate, or the like, you want to the own the car and not lease it, but your current cash flow its not at where it would be down the road, so you want lower monthly payments now and would pay your balloon payment at the end because you should be financially ok by then.
I hope my scenario (not very well written, i know) made some sense to you guys

it has nothing to do with current cash flow or "being financially ok by then". you're assuming that someone that would select this type of financing can't also afford traditional financing which is not the case at all.

[M Heart]

Originally Posted by Msmall143

it has nothing to do with current cash flow or "being financially ok by then". you're assuming that someone that would select this type of financing can't also afford traditional financing which is not the case at all.

There's a few different reasons someone would opt for BMW select program. I just used an example of someone restricted on current cash flow, which as you stated it's not always the case. Some people may opt this this program for tax reasons, business reasons etc. There's many different reasons different people opt for the 4 different ways of buying a BMW. Lease, tradicional finance, cash, BMW select, in the right popular order.

[pruettfan]

Penfed has a program very similar to BMW Select, if anyone is considering select they might want to consider the Penfed program. I considered both but decided to go with traditional financing. The caution is to ensure that the car is worth more than the balloon at the end, also if you choose to get rid of the car 3 years in you will have negative equity unless you have a sizable down. Point is plan on having cash available to deal with those circumstances.

[rouxeny]

I did BMW select on my M3. The primary reasons were to keep my payments low, and to keep my money invested in other things.

The options at the end of the time period are to 1)pay bmw and keep the car, 2) re-finance, 3) sell the car. There is no pre-negotiated price with BMW if you plan on selling it back to them.

On a new car, it's difficult to guess what the value will be in 5 years. It's theoretically possible to be underwater after the 5 years, which would have implications if you want to sell the car.

[pruettfan]

Originally Posted by rouxeny

I did BMW select on my M3. The primary reasons were to keep my payments low, and to keep my money invested in other things.

The options at the end of the time period are to 1)pay bmw and keep the car, 2) re-finance, 3) sell the car. There is no pre-negotiated price with BMW if you plan on selling it back to them.

On a new car, it's difficult to guess what the value will be in 5 years. It's theoretically possible to be underwater after the 5 years, which would have implications if you want to sell the car.

Very important point, with BMW Select you accept all of the depreciation risk unlike with a traditional lease for example. If the balloon is 20k and the car is worth 10 for example will have significant negative equity after paying principle and interest for 5 years. I think most won't have that issue because the balloons are pretty conservative so if you don't put a ton of miles on the car or damage it you should be good.

[MdMcoupe]

Thanks for all the discussion, this has really helped explain the "Select Program"

I'm still unsure how I want to proceed.

I received an allocation last week and put a 1k deposit down on a build last Friday. Now I have to wrap up financing.

I plan to put around 20K down on the car, and go thru a credit union and stretch payments to 72-84 months. I usually keep my cars for a long time (E30 M3 I had for 13 years before I sold it, and my 2000 Mcoupe i bought in 04 and still have it).

My main goal for the large down payment and 72-84 months was to keep my payments low.

Is there a way to figure what you would owe on the car if you went select? I guess add up your interest/payments for the 60 months and subtract from the original cost...

I would figure putting a large amount down would keep you from being underwater, but then is it silly to go "select" with a large down payment?

Guess I have some things to look into, thanks guys

[rouxeny]

The purpose of select is to avoid the initial down payment. It's kind of like reverse financing, in that the lump (balloon) payment is at the end. In my case, it was about $25k. The car was worth a good deal more than that at that point.

I felt select worked for me because I kept my $25k invested in other things, which beat the 0.9% rate I had on the car loan.

If you have the cash and desire to put in a big down payment, and just do regular financing, I think I'd recommend that. However, I'm not sure extending out the loan period for that long is a good idea. I suppose if you get a very low interest rate, it probably won't be that much extra in terms of extra interest.

[mrcheezle19]

Originally Posted by MdMcoupe

Thanks for all the discussion, this has really helped explain the "Select Program"

I'm still unsure how I want to proceed.

I received an allocation last week and put a 1k deposit down on a build last Friday. Now I have to wrap up financing.

I plan to put around 20K down on the car, and go thru a credit union and stretch payments to 72-84 months. I usually keep my cars for a long time (E30 M3 I had for 13 years before I sold it, and my 2000 Mcoupe i bought in 04 and still have it).

My main goal for the large down payment and 72-84 months was to keep my payments low.

Is there a way to figure what you would owe on the car if you went select? I guess add up your interest/payments for the 60 months and subtract from the original cost...

I would figure putting a large amount down would keep you from being underwater, but then is it silly to go "select" with a large down payment?

Guess I have some things to look into, thanks guys

Putting a large down isn't going to keep you from the possibility of going underwater, you will just be paying down the front portion in a large chunk. I would call the dealership you are working with and ask them for the residual on the select program (last I saw it was like 37%) so no matter how much or little you put down, you will owe 37% (or whatever the residual % is) at the end of 60 months. Then at that point you must decide refi or sell. There is no giving back to BMW and walking away.

On another note, we are in the same boat. I plan on putting 20k down and have been debating the Select program. I am leaning against it because even though the lower payments would be nice, I'm hedging my equity on the future value in the open market which is unknown. I would rather put 20k down on a normal finance loan and at the end have my equity, whatever that may be. On Select I feel like I am gambling too much and instead won't have as much of an asset because I will still have a large hanging balance after 60 months, rather than a clear and free asset.

[David1]

The highest balloon amount is 33% right now with BMW's highest credit tier. I just did the paperwork for mine the other day.

[BD_F22]

I did BMW Select and my balloon payment is $17,800 at the end of 5 years.. I will only drive about 3k miles a year so I don't see the car being worth anything less than the balloon at the end of 5 years and I got approved for their top tier credit

[MdMcoupe]

Originally Posted by mrcheezle19

Putting a large down isn't going to keep you from the possibility of going underwater, you will just be paying down the front portion in a large chunk. I would call the dealership you are working with and ask them for the residual on the select program (last I saw it was like 37%) so no matter how much or little you put down, you will owe 37% (or whatever the residual % is) at the end of 60 months. Then at that point you must decide refi or sell. There is no giving back to BMW and walking away.

On another note, we are in the same boat. I plan on putting 20k down and have been debating the Select program. I am leaning against it because even though the lower payments would be nice, I'm hedging my equity on the future value in the open market which is unknown. I would rather put 20k down on a normal finance loan and at the end have my equity, whatever that may be. On Select I feel like I am gambling too much and instead won't have as much of an asset because I will still have a large hanging balance after 60 months, rather than a clear and free asset.

I did email my dealer and asked for some quotes, at first I asked him about putting down 10k...

Below is his emailed response for 10k down

The Select payment for 60 months would be $674 and the balloon would be $19,138.35.


I then emailed him asking what the finance rate was, and what would the payment and balloon be for 5k down, and 15k down.

below is his response

It’s 3.95% for Select. $5k down would be $766 and $582 with $15k down. There is no mileage limit doing a Select.


After reading some of your replies here, I need to go and do some math Something seems weird here.

[MdMcoupe]

Originally Posted by David1

The highest balloon amount is 33% right now with BMW's highest credit tier. I just did the paperwork for mine the other day.

Would that be 33% of the msrp, or the total of the car with taxes, tags and title?

Sorry for the rookie questions, this is all new to me.

[BD_F22]

Originally Posted by MdMcoupe

I did email my dealer and asked for some quotes, at first I asked him about putting down 10k...

Below is his emailed response for 10k down

The Select payment for 60 months would be $674 and the balloon would be $19,138.35.


I then emailed him asking what the finance rate was, and what would the payment and balloon be for 5k down, and 15k down.

below is his response

It’s 3.95% for Select. $5k down would be $766 and $582 with $15k down. There is no mileage limit doing a Select.


After reading some of your replies here, I need to go and do some math Something seems weird here.

Yeah the numbers are very strange in my opinion! I will tell you my exact numbers.

MSRP was $57,850 + Delaware tax of 4.25%
Put down $6,000
Monthly payment is $681
2.97% rate (best they were offering on select with top tier credit)
Balloon Payment is $17,933 (31%)
60 month loan

[paliknight]

Originally Posted by MdMcoupe

I did email my dealer and asked for some quotes, at first I asked him about putting down 10k...

Below is his emailed response for 10k down

The Select payment for 60 months would be $674 and the balloon would be $19,138.35.


I then emailed him asking what the finance rate was, and what would the payment and balloon be for 5k down, and 15k down.

below is his response

It’s 3.95% for Select. $5k down would be $766 and $582 with $15k down. There is no mileage limit doing a Select.


After reading some of your replies here, I need to go and do some math Something seems weird here.

You will be paying a lot of interest with that rate, FYI. I did select on 65k with 2.9% and realized i was paying about 200+ a month in interest alone (since the rate is on the entire amount including the balloon). I ended up refinancing for 60 months and 1.9% interest. Fuck that.