[DocWeatherington]

Originally Posted by HK4

My BMW select deal below. I've been playing with the numbers all day and have no clue how they came up with that monthly payment. If someone can break it down for me, would be much appreciated.

My dealer told me I'd finance 64% and baloon would be 36%.

That math doesn't break down...

Your interest rate would have to be about 8.71% ..


Grand total 110k at 8.71% at 60 months... Total interest.

Then take 110x64% plus all interest divide by 60 gets your x payment ...... Would get you 34% remaining ...


Ask them to break down the totals as either the rate is correct and they have some added in fees.

Even the 34% of 110k is off...

[antzcrashing]

Bump, let’s keep this very simple:

Vehicle: 2024 BMW M4 Comp AWD
Delivery Date: TBD
MSRP: 91,700 USD
Discount: TBD
Methods: TBD
Monthly Payment: TBD

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Vehicle:
Delivery Date:
MSRP:
Discount:
Methods:
Monthly Payment:


Thank you

[geko29]

Originally Posted by HK4

My BMW select deal below. I've been playing with the numbers all day and have no clue how they came up with that monthly payment. If someone can break it down for me, would be much appreciated.

My dealer told me I'd finance 64% and baloon would be 36%.

I got within a few cents of their numbers, probably only differing by the number of days until the first payment is due. Here are my figures

Purchase price $102,390.00
Taxes and fees $8,186.33
Total $110,576.33

Balloon amount $36,860.40 (Purchase price x 36%)
Monthly interest on balloon $187.37 (Balloon amount x 6.1%/12)

Initial amount financed $73,715.93 (Total - Balloon amount)
Monthly payment $1,428.57 (=PMT(6.1%/12,60,<amount financed>,0,0))

Total monthly payment $1,615.94 (monthly interest on balloon + monthly payment)

Hope that helps! For the "customer cash" scenarios, subtract that amount from the "total amount financed" line.

[geko29]

Originally Posted by DocWeatherington

That math doesn't break down...

Your interest rate would have to be about 8.71% ..


Grand total 110k at 8.71% at 60 months... Total interest.

Then take 110x64% plus all interest divide by 60 gets your x payment ...... Would get you 34% remaining ...


Ask them to break down the totals as either the rate is correct and they have some added in fees.

Even the 34% of 110k is off...

But that's not how it works. You pay the taxes and fees NOW. The 34% is only of the purchase price, not the taxes and fees. And the cost to postpone the balloon portion is not zero. In this case, the cost to push the balloon payment out five years is $11,242.42.

Balloon loans are actually two separate loans packaged together. There is a "traditional" loan for the portion being financed, plus all taxes and fees. That goes to $0 after 60 months, because principal is being paid down. Then there's a second, interest-only loan on the Balloon portion, which is about $37k in this case. You pay $187/mo to carry this principal, but it is never reduced. After 5 years, you still owe the whole $37k. You just paid $11k to avoid dealing with it until then.

At the end of the 5 years, you have paid a total of $96,956.36, of which $23,240.43 is interest. You still have another $37k of principal to pay off. If you do it in a lump sum, the total cost of the car is $133,816.76. If that 37k is financed at the same rate for say another 3 years, that will be at $1,123.04/mo, and the car's total cost is $137,385.65.

[MrSmileyDC]

Originally Posted by geko29

But that's not how it works. You pay the taxes and fees NOW. The 34% is only of the purchase price, not the taxes and fees. And the cost to postpone the balloon portion is not zero. In this case, the cost to push the balloon payment out five years is $11,242.42.

Balloon loans are actually two separate loans packaged together. There is a "traditional" loan for the portion being financed, plus all taxes and fees. That goes to $0 after 60 months, because principal is being paid down. Then there's a second, interest-only loan on the Balloon portion, which is about $37k in this case. You pay $187/mo to carry this principal, but it is never reduced. After 5 years, you still owe the whole $37k. You just paid $11k to avoid dealing with it until then.

At the end of the 5 years, you have paid a total of $108,198.78, of which $34,482.85 is interest. You still have another $37k of principal to pay off. If you do it in a lump sum, the total cost of the car is $145,059.18. If that 37k is financed at the same rate for say another 3 years, that will be at $1,123.04/mo, and the car's total cost is $148,628.07.

I think the key to doing the balloon payment is to treat it like a lease and pay it off at 3 years. Whether leasing is cheaper would depend on lease residual vs the remaining amount of a loan plus balloon payment. I’m only considering a balloon payment so I can sell my current car and then refinance after putting the cash down from that sale. Of course if I can lock in a CD with a higher interest rate than an auto loan then I’ll just park my cash there to create my own interest free loan.

In theory, if inflation keeps running hot then used car prices will still adjust higher over time. I would have never imagined my current car would be worth what it is today if not for the last couple years of inflation.

[HK4]

Originally Posted by geko29

I got within a few cents of their numbers, probably only differing by the number of days until the first payment is due. Here are my figures

Purchase price $102,390.00
Taxes and fees $8,186.33
Total $110,576.33

Balloon amount $36,860.40 (Purchase price x 36%)
Monthly interest on balloon $187.37 (Balloon amount x 6.1%/12)

Initial amount financed $73,715.93 (Total - Balloon amount)
Monthly payment $1,428.57 (=PMT(6.1%/12,60,<amount financed>,0,0))

Total monthly payment $1,615.94 (monthly interest on balloon + monthly payment)

Hope that helps! For the "customer cash" scenarios, subtract that amount from the "total amount financed" line.

Ok that clears it up a lot. Didnt realize I'll pay the baloon interst as well from the start. Thanks for your clear response to this!!

[HK4]

Originally Posted by geko29

But that's not how it works. You pay the taxes and fees NOW. The 34% is only of the purchase price, not the taxes and fees. And the cost to postpone the balloon portion is not zero. In this case, the cost to push the balloon payment out five years is $11,242.42.

Balloon loans are actually two separate loans packaged together. There is a "traditional" loan for the portion being financed, plus all taxes and fees. That goes to $0 after 60 months, because principal is being paid down. Then there's a second, interest-only loan on the Balloon portion, which is about $37k in this case. You pay $187/mo to carry this principal, but it is never reduced. After 5 years, you still owe the whole $37k. You just paid $11k to avoid dealing with it until then.

At the end of the 5 years, you have paid a total of $108,198.78, of which $34,482.85 is interest. You still have another $37k of principal to pay off. If you do it in a lump sum, the total cost of the car is $145,059.18. If that 37k is financed at the same rate for say another 3 years, that will be at $1,123.04/mo, and the car's total cost is $148,628.07.

Where is the 108 K coming from. Monthly payment no money down would be $1617. So x 60 months would be 97k. Correct??

[geko29]

Originally Posted by HK4

Where is the 108 K coming from. Monthly payment no money down would be $1617. So x 60 months would be 97k. Correct??

You are correct. I added the balloon interest a second time by accident. Total cost if you pay off the balloon in cash at the end of the first loan is $133,816.76. $137,385.65 if the balance was refinanced for another 3 years at the same 6.1% rate.

Sorry about that. I've gone back and edited that post.

[FXMR]

Originally Posted by MrSmileyDC

I think the key to doing the balloon payment is to treat it like a lease and pay it off at 3 years.

This isn't unanimously the best option. On a balloon, you're paying sales tax on the entire purchase price. If you're in a state that taxes leases by monthly payment instead of full purchase price, that's a substantial difference. Quick math on the above assuming a 7.75% sales tax rate makes for $7,935 s/t on the purchase and $3,412 s/t on a 36mo lease (estimate). Over $4,500 in savings, not to mention savings from additional interest expense as you aren't carrying this in the balloon balance.

Another factor not considered is liability. You own the car on a balloon, BMWFS owns the car on a lease. Someone unfortunately hits you a few months in and causes tens of thousands worth of damage - not your problem. Turn in the keys and walk away. On the flip side - want to buy the car at the end of the term or realize theres positive equity in it at maturity? Totally possible. Would also bet interest rates are going to be lower at maturity than what you're going to lock now.

[Bimmer07]

My CA told me no $750 loyalty for M3 base for March. Any truth to this?

[DocWeatherington]

Originally Posted by Bimmer07

My CA told me no $750 loyalty for M3 base for March. Any truth to this?

Other dealerships are showing $750 unless your zipcode/ region is exempt. Have them check again

Check Edmunds incentives, note at the beginning of the month it takes a few days for the information to cycle.

[Bimmer07]

Originally Posted by DocWeatherington

Other dealerships are showing $750 unless your zipcode/ region is exempt. Have them check again

Check Edmunds incentives, note at the beginning of the month it takes a few days for the information to cycle.

I guess you also have to go with BMWFS to qualify which im not.

[DocWeatherington]

Originally Posted by Bimmer07

I guess you also have to go with BMWFS to qualify which im not.

Correct ... If you military there is another discount via ID.me

[jjl5508]

Originally Posted by DocWeatherington

Correct ... If you military there is another discount via ID.me

Do you know how much the military discount is? I’ve been told that it’s $500 by my CA but online, it shows a whole range.

[DocWeatherington]

Originally Posted by jjl5508

Do you know how much the military discount is? I’ve been told that it’s $500 by my CA but online, it shows a whole range.

ID me is 1500 for 3 series .... Also I think navy federal has a similar kickback..but id me will tell you the exact once you verify.

It's 500 if you use bmw fs... But can stack loyalty

[antzcrashing]

What are the best rates people are getting today, like 2023 Feb, Mar with 800+ credit rate. 4%? 5%?

[antzcrashing]

Originally Posted by tatarwj

From what I have read, with the current times, you have a great deal with 1k off MSRP on a M3CX order placed.

I was able to get $500 off MSRP on a M3CX order, and thought I did decent since all that I have read were at MSRP.

I was also offered $48k for my base M240xi that was delivered 6/2022. I only paid $49k for it ($50k sticker plus negotiation) so I decided to jump on the M3CX order before my M240xi trade in value goes down.

Thanks for this reply, very informative.

[RussM4]

Originally Posted by RussM2

What is the current Bmw finance rate? I heard in January it was 3.99 for 60 months? I would be picking up my car end of April-May. Should I lock in the current rate at 4.59 for 60 months? I know I will be looking into some credit union. Do you guys think the rates will get better in few months?

My car will be here end of the month its in transit.

I have a locked in rate at 4.59 for 60 months + 1 point added.
makes it 5.49 for 60 months.

I am approved with credit union at 72 months at 3.49. I will switch over.

[antzcrashing]

Originally Posted by RussM2

My car will be here end of the month its in transit.

I have a locked in rate at 4.59 for 60 months + 1 point added.
makes it 5.49 for 60 months.

I am approved with credit union at 72 months at 3.49. I will switch over.

Tell me more about this switch over? So is it good to start with BMW FS and switch over shortly after?

My goal is 5% max, my credit is great. So far I haven’t been quoted and am getting nervous

[DocWeatherington]

antzcrashing

The problem is your already behind the curve.


Folks that are getting sub 5s and even 3% rate locked months ago before the increases. You need to search now and lock things knowing that you car delivery is TBD. Bmw is honoring locks even after the lock period.


You need to lock with the lowest bank and know that it will expires after X point unless you can maintenance the loan.

My advise is to lock with bmw knowing that they may add 1%, then after that when you get within 30days of delivery start looking at other lenders and wind the tape and see what's the best option.

I have a 827 an had a 2.3 but it expires on 1/31, but I rate locked with bmw at 3.99 and .000180 in Dec so had a few options.

With BMW FS is the rates go lower during you lock you will get that.

Feb rates switch in March, just like they will in April

[antzcrashing]

Originally Posted by DocWeatherington

antzcrashing

The problem is your already behind the curve.


Folks that are getting sub 5s and even 3% rate locked months ago before the increases. You need to search now and lock things knowing that you car delivery is TBD. Bmw is honoring locks even after the lock period.


You need to lock with the lowest bank and know that it will expires after X point unless you can maintenance the loan.

My advise is to lock with bmw knowing that they may add 1%, then after that when you get within 30days of delivery start looking at other lenders and wind the tape and see what's the best option.

I have a 827 an had a 2.3 but it expires on 1/31, but I rate locked with bmw at 3.99 and .000180 in Dec so had a few options.

With BMW FS is the rates go lower during you lock you will get that.

Feb rates switch in March, just like they will in April

Appreciate your helpful advice, I will say that I am in the queue for a BMW FS quote, was just trying to anticipate the result, which is hard bc each situation is unique. Will post back when I get my rate, fingers crossed for sub 5%

[Bimmer07]

Originally Posted by RussM2

My car will be here end of the month its in transit.

I have a locked in rate at 4.59 for 60 months + 1 point added.
makes it 5.49 for 60 months.

I am approved with credit union at 72 months at 3.49. I will switch over.

Are you going with BMWFS because of the incentives or because your dealer doesnt let outside financing?