BMW Financing and Incentives

So I just ordered a new X5 and had to finance a portion to get the incentives. The dealership told me the minimum amt was $7500 and you had to keep it for six months.

I get to thinking and figure I can pay $7400 on my first payment and slowly pay the $100 balance over the next 5 months. That will keep the interest charges to a minimum.

Does anyone know if this would be ok and not void the incentives? Or maybe you might have a better approach.

Thanks

I only put $1,000 down and refinanced two months later with no problems.

What exactly are you guys talking about?..I'm interested...yet confused.

Originally Posted by boostedX5SAV

I only put $1,000 down and refinanced two months later with no problems.

Your premise is inverted. He is asking HOW LONG does he HAVE to keep the $7,500 non-cash balance on his account in order to participate in the financial incentives rather than simply paying it off in cash.

In contrast, you (like most of us) financed most/all of it so this is two sides of different coins. However, that being stated I WOULD be interested in IF you were able to get the re-financing bank provided you the NEW car reduced rate on the 2 month old vehicle? If so, I would be interested in learning which bank you used. I did the BMW finance thing to get the $1,250 incentive (in my case) but the interest rate is 3.29% for 72 months. I know that PenFed and others were offering rates as low as 1.79% for that same 72 month loan for a NEW car. My understanding is that once you own it, it no longer qualifies as NEW so you can't get those super low (under 2%) rates and therefore many of us are stuck with the higher BMW rate and would be interested in our options. Thanks in advance!

Originally Posted by ndabunka

He is asking HOW LONG does he HAVE to keep the $7,500 non-cash balance on his account in order to participate in the financial incentives rather than simply paying it off in cash.
!

That's right I can pay off the X5 in full but to get the incentives you had to finance a portion for a period of time. I just don' t know the rules for the payoff and not voiding the incentives. Hoping some else had an idea.

And your second part is similar - if you pay off the original with another loan same situation.

Interesting question. I don't have the answer to your theory, but I know the actual time frame is 3 months not 6.

I did the same to get the BMWFS rebate and then paid it off in 3 months. Also BMWFS will not come back on you, but the dealership, so depending on your ethics you can essentially do what ever the hell you want. I'm not sure on the minimum balance needed to be maintained, you may ask your SA, but sounds like they already gave you the wrong info on the term (assuming it hasn't changed in 12 months).

Also for the "new car" question, my credit union considers anything 2007+ as "new" not just a 0 mile car sitting on a lot, I would make a call to your bank.

Jay

Originally Posted by ndabunka

I know that PenFed and others were offering rates as low as 1.79% for that same 72 month loan for a NEW car. My understanding is that once you own it, it no longer qualifies as NEW so you can't get those super low (under 2%) rates and therefore many of us are stuck with the higher BMW rate and would be interested in our options. Thanks in advance!

Actually, PenFed's rates have been (and still are today) 1.49% for both new and used for up to $70k and 60 months. So doing a re-fi with them will still be 1.49% even if it is considered "used".

My wife is replacing her '06 330i with an X5 and we were seriously considering the PenFed loan, but since she is only planning to keep the car a few years, we're going the lease route instead for this one. At least we still get to grab the $2250 incentive deal.

My Finance Manager told me that in order to keep the incentives, you have to carry a balance, and make at least 4 payments. At that time you can pay off the balance a day after the 4th payment is made/due.

Hope that helps.

Do the math.... If you are getting X incentives to borrow 7500.00, and the cost to finance that 7500 is less than that incentive, then do it. If it is not, then don't.

Originally Posted by MRV99

Do the math.... If you are getting X incentives to borrow 7500.00, and the cost to finance that 7500 is less than that incentive, then do it. If it is not, then don't.

This.

Really it just comes down to simple math.

I'm not following the math comment. I really want to minimize the interest payment while not voiding the incentives. I can do this if I understand the flexibility in payment and time frame which I don't. Anyhow, the Tubernator answered my question. thanks

Sorry, I did not fully understand the post originally. However, I was able to refinance 2 months later to lower my monthly payments and still keep the incentives, I don't see why you can't pay off after 1 or two months and still keep the incentives. Again, someone said BMWFS won't make you pay or take away the incentives. I suspect the dealership might get some kickbacks from BMWFS if you stay financed with BMWFS after a few months and that is why they told you that.

Originally Posted by MRV99

Do the math.... If you are getting X incentives to borrow 7500.00, and the cost to finance that 7500 is less than that incentive, then do it. If it is not, then don't.

Sorry but your statement doesn't make any sense in the context this was presented. Your approach appears too simplistic (Get discount using the BMW-based incentives). That was ALREADY a "given". What is being postulated is "what ELSE can be done to help reduce the on-going costs".

There never was any DOUBT about leveraging the BMW-offered incentives/discount savings. That was never in question either for the OP or for me. Rather, we are interested in our BEST options AFTER we have made that decision.... e.g. What ELSE can we do to further reduce our ongoing costs. If the OP has cash and wants to pay it off, it appears that he can do so anytime after the 3rd month of payments and not have any concerns about compromising the original discount. In my case, I want to reduce my long term payments from the 3.29% to a 1.79% (or the lowest rate I can find) so that my on-going carrying costs are reduced from the original interest rate. Both of these are simply intelligent financial principles. The only real question here was "WHEN CAN WE DO IT" and I believe we now have our answers thanks to this thread! :cheers:

One note is that some financing companies DO require reasonably significant down payments in order to refinance. Something like a minimum of 5 or 10% of the purchase price is pretty much expected. That isn't an issue with me or the original OP but some reading this who may have financed in negative equity from a prior trade or lease might not be able to refinance as easily as those of us who have put a minimum of 10% down on the vehicle. If someone is 100% in debt based on the valuation of the car (e.g. paid $55K for a $55K vehicle) then it is highly unlikely that the 3rd-party finance companies would be willing to refi them at a competitive rate. Same applies to those with marginal credit scores below 750... probably not gonna qualify for the lower refi rates and they would be essentially "stuck" with their BMW-agreed loan conditions/rates and duration.

Is there a link on the current incentives?

The current incentives should be under the model you are interested in on www.bmwusa.com. They have been updated for January.

Sent from my SAMSUNG-SGH-I317 using Bimmer App

Yeah all I see is 3.19% on x5

I want to know to. I am taking a delivery soon.