[cole1186]

Hey all,

Quick question about refinancing a BMW loan... if I get a new loan through BMW for 4% and want to refinance with PenFed lets say right away after I buy the car, will that work with 0 penalties?

I actually see PenFed has 1.99% for 60 months for a new car refinance plus $150 bonus. If you get a new car loan with Penfed it is 2.54% for 60 months. It seems to me that it makes better sense to just take my dealerships 4% loan, then refinance with Penfed the next month...

Does this make the most sense and will this work without any kind of loan payoff penalties through BMW Fiance?

[NightWriter]

Interesting, and good catch on the refinance rate. I'm 98% certain that BMWFS does not charge an early payoff penalty. (They certainly don't if buying your car back, I know that much.)

[edofloat]

Originally Posted by cole1186

Hey all,

Quick question about refinancing a BMW loan... if I get a new loan through BMW for 4% and want to refinance with PenFed lets say right away after I buy the car, will that work with 0 penalties?

I actually see PenFed has 1.99% for 60 months for a new car refinance plus $150 bonus. If you get a new car loan with Penfed it is 2.54% for 60 months. It seems to me that it makes better sense to just take my dealerships 4% loan, then refinance with Penfed the next month...

Does this make the most sense and will this work without any kind of loan payoff penalties through BMW Fiance?

No issue, just do the re-fi and save some money. PenFed gets things done quickly. Hell, I wouldn't wait a month, rates may go up. Take delivery then do the re-fi and get it changed.

[cole1186]

I'm going to do that the next day then.. going to call BMW FS to make sure they allow this so soon after getting the new finance

[DuskPhilosophy]

Originally Posted by cole1186

I'm going to do that the next day then.. going to call BMW FS to make sure they allow this so soon after getting the new finance

Any updates on how this process worked out for you?

[backslashv]

I think I read somewhere that BMWFS charges an early termination fee.

[figuec56]

I don't think there is a charge an early termination fee. There wasn't on m240 a few years ago. I always ask the dealer to show me in the contract when I'm filling out paperwork.

However I do believe the dealership gets a chargeback of incentives if the loan is paid off in less than 6 months.

[wtwo3]

Originally Posted by figuec56

However I do believe the dealership gets a chargeback of incentives if the loan is paid off in less than 6 months.

I've been wondering about this... in this case where dealers may be offering msrp but are inflating the interest rate by a full %... wouldn't it be in their best interest to just offer the base rate to avoid risking someone either shopping around for 3rd party financing or refinancing the loan immediately? Or are there so few people that actually go through the process like that to where they feel they can charge the inflated interest rate even at the expense of those few people leveraging 3rd party financing?

[backslashv]

Originally Posted by figuec56

However I do believe the dealership gets a chargeback of incentives if the loan is paid off in less than 6 months.

This may be a dumb question, but what does this mean? The only "incentive" I got on the M3 was the $500 loyalty. Are you saying they are gonna take that back?

[figuec56]

Originally Posted by backslashv

This may be a dumb question, but what does this mean? The only "incentive" I got on the M3 was the $500 loyalty. Are you saying they are gonna take that back?

The dealership gets paid commission or spiff for for some of the loans they offer. They also make a certain amount based on the interest rate they charge. That's why the used to offer some incentives only if you finance with the dealership.

[figuec56]

Originally Posted by wtwo3

I've been wondering about this... in this case where dealers may be offering msrp but are inflating the interest rate by a full %... wouldn't it be in their best interest to just offer the base rate to avoid risking someone either shopping around for 3rd party financing or refinancing the loan immediately? Or are there so few people that actually go through the process like that to where they feel they can charge the inflated interest rate even at the expense of those few people leveraging 3rd party financing?

They look at it mostly as wiggle room. It's also why they may ask if you shopped for financing already. They have ability to to see interests rates at a lot of banks. So if you have a really good rate they may try a credit union so they can keep a percentage point rather than BMW.

[wtwo3]

Originally Posted by figuec56

They look at it mostly as wiggle room. It's also why they may ask if you shopped for financing already. They have ability to to see interests rates at a lot of banks. So if you have a really good rate they may try a credit union so they can keep a percentage point rather than BMW.

So if I wave 3rd party financing in their face... would that give me negotiating power, or would they simply tell me to go ahead with my 3rd party rate?

I know in "normal" times getting base rates at bmw is fairly easy as long as you have the creditworthiness... but seems in these times now every dealership in the midwest is inflating MF and finance rates without any room for negotiation.

[figuec56]

Originally Posted by wtwo3

So if I wave 3rd party financing in their face... would that give me negotiating power, or would they simply tell me to go ahead with my 3rd party rate?

I know in "normal" times getting base rates at bmw is fairly easy as long as you have the creditworthiness... but seems in these times now every dealership in the midwest is inflating MF and finance rates without any room for negotiation.

It's always good to have your own financing available. I usually negotiate out the door cost separately from financing and when financing come up I say I am willing to finance with the dealership if they are competitive. I'll then let them know the rate and term. Dealers usually try and beat your rate to retain you, but sometimes they can't. They has happened to me a couple times with usaa.

[backslashv]

@cole1186 any updates on how the refi went for you if you've done it yet? Any closing costs with bmw FS?