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Old 10-01-2002, 11:31 AM
Jon Shafer's Avatar
Jon Shafer Jon Shafer is offline
Bimmerfest Founder
Location: Santa Barbara
Join Date: Dec 2001
Posts: 14,349
Mein Auto: E92 M3 Cp
You know, out here in CA, we don't have these programs,
so I'm not a total expert with OC.

Did you see this in the New Section?

The way that "balloon payment retail finance contracts"
(e.g. "Owner's Choice") normally work, it's basically
the same thing as a lease. There is a "fixed-value amount"
(equivalent to residual value in leasing terms) that, at maturity,
the buyer can pay off to complete the acquisition. That
balance can then be refinanced at that time, or, the
buyer can simply "walk away"... This is different from the
new "BMW Select" program.

These payment programs were originally invented
to circumvent the problem of leasing in Personal
Property Tax States.

When I used to run Chrysler/Plymouth/Jeep/Eagle
store we had the Chrysler Financial "Gold Key Plus"
(balloon note) contracts, which were basically the
same thing... They used them as a program
to get buyers with marginal credit done (with high interest).
Since the car would be coming back, risk was assumed
to be minimized.

What you will find with OC is that the payment looks great;
when you see the actual contract, you will be alarmed,
perhaps shocked at the very high amount in the "finance charges" box. This is part and parcel of the math here.

Anyway, I really have to run
now. I am swamped.

Good luck and best regards,