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Old 02-12-2012, 11:41 AM
rs123 rs123 is offline
Registered User
Location: Canada
Join Date: Feb 2012
Posts: 13
Mein Auto: acura csx
Originally Posted by pcbrew View Post
Not sure if you understand the concept. OC will likely be for 3 years, as most leases. After 3 years of relatively low payments similar to lease, you have the option of a) returning the car to BMW or b) purchasing the car for the agreed on residual amount. The latter is the balloon portion, you have no equity in the car after 3 years unless, for some reason, you could sell it for more than the agreed to residual.

The only benefit to OC is that, in states like IL & TX, you have to pay sales tax up front on the entire purchase price and, with OC, you don't have to pay taxes again on a lease sale if you keep the car.
hmm okay that makes sense, So what did the dealer mean that after 4 years if I decided I wanted a new car that the 20k balloon payment that's left would be used as a trade-in value for a new car? That's the part I dont understand because if I have no equity in the car how can I use it as a down payment?