BMW 428i lease/finance option

honartvandelay

Has anyone heard of this as a financing option? I have a quote on a "executive" car--5000 miles 428i with premium and driver assist. MSRP is about $46,000 and the offer is $40,000 (which I think is on the high side but is not really my question. At least not yet.) This is a 60 month loan with an APR of 1.9% but with a residual (or I guess a balloon payment) of $13,297 at the end of 60 months. Any thoughts on whether this type of deal makes sense?

kyfdx

@honartvandelay said:
Has anyone heard of this as a financing option? I have a quote on a "executive" car--5000 miles 428i with premium and driver assist. MSRP is about $46,000 and the offer is $40,000 (which I think is on the high side but is not really my question. At least not yet.) This is a 60 month loan with an APR of 1.9% but with a residual (or I guess a balloon payment) of $13,297 at the end of 60 months. Any thoughts on whether this type of deal makes sense?

It sounds like BMW Select financing. Which as you noted is a balloon note.

That's usually offered in states that charge tax on the full selling price of a lease. (TX, IL, MD, GA, etc..). Doesn't seem like a smart financial move.

honartvandelay

Thanks very much. Can you explain a little more why it's not smart? This is the first experience I have had with this kind of financing. The way it was explained was that at the end of 60 months I can either buy it out or turn it back in and if there is any equity I could apply it to another car. Strangely this is in AZ, which does not charge tax on the full selling price (I don't think). Thanks again.

kyfdx

@honartvandelay said:
Thanks very much. Can you explain a little more why it's not smart? This is the first experience I have had with this kind of financing. The way it was explained was that at the end of 60 months I can either buy it out or turn it back in and if there is any equity I could apply it to another car. Strangely this is in AZ, which does not charge tax on the full selling price (I don't think). Thanks again.

You'll be way out of warranty and maintenance coverage. If you decide you need to get rid of the car before 60 months, you'll be upside down, because of the stretched out payments.. I would either lease or buy. Don't let a low payment lure you into thinking that the vehicle is cheaper than it is..

honartvandelay

Fair enough, thanks. Really appreciate the advice.