PDA

View Full Version : why BMW charge so much interest?


JetBlack330i
09-04-2002, 07:25 PM
In these days of basement low interest rates, GM and Ford are having double-digit sales increase mainly due to their 0% financing.
Even Honda is offering 1.9% financing.
Why is BMWNA still charging so much? Yes, the car is hot, but financing I can get from anywhere, right? How come competition is not working here?

Nick325xiT 5spd
09-04-2002, 07:28 PM
It's probably because BMW doesn't see any need to take a loss on their loans. And what bank out there is going to give you 1.9% purely on a loan?

nate
09-04-2002, 07:30 PM
Because they can make more money not doing so...

TD
09-04-2002, 08:00 PM
Gee. Let's apply some common sense here...

Are market interest rates for consumer loans anywhere near 1.9%? Do you really think companies like Ford have access to super special sources of capital to lend out money WAY below market rates? And, if so, wouldn't it make sense to lend out that money at or near market rates and pocket huge profits?

Of course it would. And, of course, these are not "real" interest rates but subsidized ones. It's no different than offering large chunks of cash back.

And who offers cash back? Manufacturers who's vehicles are not selling well when priced at or near MSRP.

BMW sells every car it can build at or near MSRP.

Basically, it's Econ 101.

Cliff
09-05-2002, 06:42 AM
Zero or low interest rate loans are a form of price discounting. BMW has customers paying prices at or near MSRP for cars they haven't built yet, then waiting months for either an allocation in the dealer's supply or for delivery. BMW should offer additional blanket price discounts due to what compelling business need?

in_d_haus
09-05-2002, 08:59 AM
I got 3.9% on the ///M3

Jetfire
09-05-2002, 09:43 AM
in_d, that's a great interest rate on a used car! There's definitely some competition out there for interest rates, but that's a whole different story.

Like everyone else is saying, BMW is enjoying extremely high demand for its vehicles. Even when the competition offers a solid car for almost $10,000 less, people are lining up for Bimmers. There's no reason in the world why they would want to increase the demand even further by offering rebate or interest incentives--people are already impatiently waiting months for their cars.

GM and Ford and most other car companies are all fighting for market share in very competitive segments. 0% financing is a great way to bring buyers into showrooms.

rbright
09-05-2002, 10:15 AM
It looks like Peoplefirst has the lowest rates at 5.49% Does anyone know of other sites that might be helpful and competitive?

I went through lendingtree as well and they merely linked me to peoplefirst...and threw in a horrible company called Road Loans.

Road Loans quotes the wrong terms, were 1.5% higher for the correct terms, I had to call 3 times, got hung up on the first two times (accidentally, new employee), and put on hold forever.

Then, they just laughed and said, well peoplefirst changes their rates everyday. This is not true, I have noticed their rates have been 5.49% for at least the last month.

I would avoid roadloans at all cost. But welcome any alternatives to peoplefirst to compare rates.

in_d_haus
09-05-2002, 10:26 AM
Originally posted by rbright
It looks like Peoplefirst has the lowest rates at 5.49% Does anyone know of other sites that might be helpful and competitive?

I went through lendingtree as well and they merely linked me to peoplefirst...and threw in a horrible company called Road Loans.

Road Loans quotes the wrong terms, were 1.5% higher for the correct terms, I had to call 3 times, got hung up on the first two times (accidentally, new employee), and put on hold forever.

Then, they just laughed and said, well peoplefirst changes their rates everyday. This is not true, I have noticed their rates have been 5.49% for at least the last month.

I would avoid roadloans at all cost. But welcome any alternatives to peoplefirst to compare rates.


According to my dealer BMW financial is charging 3.9% and 4.9% depending upon term

Dr. Phil
09-05-2002, 10:32 AM
Originally posted by in_d_haus



According to my dealer BMW financial is charging 3.9% and 4.9% depending upon term
I think that is standard for 2 or 3 year old CPOs.

rbright
09-05-2002, 10:33 AM
3.9 and 4.9% is on used cars only, right?

New car loans are 6.05% at BMW now, unless you know something new that I don't... please share.

JetBlack330i
09-05-2002, 08:16 PM
Some of you are missing the point.
With loan rates at 5.5% or lower (not to mention the occasional 3.9%), the question is why some people agree to pay 6+% from BMW? Is the little convenience (doing everything under one dealership roof) worth that much?

ashecnc
09-05-2002, 08:20 PM
Originally posted by JetBlack330i
In these days of basement low interest rates, GM and Ford are having double-digit sales increase mainly due to their 0% financing.
Even Honda is offering 1.9% financing.
Why is BMWNA still charging so much? Yes, the car is hot, but financing I can get from anywhere, right? How come competition is not working here?

they better get with the program or they aint gonna be hot no mo :lmao: and I dont mean drop the interest rate... :angel:

operknockity
09-06-2002, 12:35 AM
When I bought my car back in February, the best BMW would do was something between 6% and 6.5%. I had to bully them in to matching 5.5% from my credit union.

With the cars flying out of the show rooms as fast as (or faster than) they can build them, and at or near MSRP to boot, BMW has absolutely no incentive to play the at-or-zero-percent financing game.

Skybum
09-06-2002, 08:22 AM
Try www.eloan.com

I got 4.89% on a 2003 325Ci

kster
09-06-2002, 09:17 AM
I picked up my car this week and the BMW dealership offered me an interest rate of 5.75%.

rbright
09-06-2002, 11:37 AM
Originally posted by Skybum
Try www.eloan.com

I got 4.89% on a 2003 325Ci

Awesome. I went to their website and it says 5.49%. So, I called them and they said for a 60 mo loan, it is 4.85% today.

That saves $1000 over life of loan. I am trying to see if my lendingtree application can be sent to eloans so I can get the bonus with lendingtree as well.

If not, I am definitely going through eloans, or at least making peoplefirst matching their offer.

Thanks a LOT for the tip.

rbright
09-06-2002, 11:47 AM
Actually 4.35% if you pay electronically. That is a great deal for a new bimmer.

DrewM
09-06-2002, 01:46 PM
Originally posted by rbright
3.9 and 4.9% is on used cars only, right?

New car loans are 6.05% at BMW now, unless you know something new that I don't... please share.

I ordered my 2002 325CiC in early June and got preapproved at peoplefirst.com at 5.49%.

When the car came in, they asked if my financing was taken care of...when I told them what I had, they came back and set up a loan through BofA at 4.59%...I was obviously quite pleased...

Bottom line, the person in the finance office has access to many deals. If you have good credit, they should be able to take care of you.

rbright
09-06-2002, 02:01 PM
Originally posted by DrewM


I ordered my 2002 325CiC in early June and got preapproved at peoplefirst.com at 5.49%.

When the car came in, they asked if my financing was taken care of...when I told them what I had, they came back and set up a loan through BofA at 4.59%...I was obviously quite pleased...

Bottom line, the person in the finance office has access to many deals. If you have good credit, they should be able to take care of you.

Thanks for the information. I closed the deal with peoplefirst, as they counter-offered with 4.75%. Better than the 4.85% at ELoans, and they actually give you a blank check to take to the dealer, good for 45 days.

My dealer said that they would not accept the electronic transfer forms from Eloans, it makes things much messier. Peoplefirst were EXCELLENT to deal with and they lowered their rates without hesitation when I told them the rates at Eloans.

Now, with my hot 4.75% check in hand, who knows what the dealership will do when I go in to finalize the plans, which will be another month still. If they can go lower than 4.75%, then the world is just going way too smoothly for me these days. We'll see, but I think 4.75% is a steal for BMW financing, considering I got such a great price to begin with.