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Old 05-07-2017, 11:00 AM
1968BMW2800 1968BMW2800 is offline
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Join Date: Aug 2016
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Originally Posted by Ossian512 View Post
My 530e is crossing the Atlantic at the moment, so I suppose it's time to figure out how I will pay for it...

Some questions for those of you in Texas, Georgia, or other states with hostile leasing tax treatment:

I am considering Owner's Choice instead of leasing, but not because I think I might buy the car at 36 months. Tell me if these assumptions are correct/incorrect:
  • OC is a purchase with a lease-like option to return. As a purchase, I would qualify for *financing* incentives/rebate rates such as USAA and fleet, rather than lease rate incentives/rebates
  • For iPerformance vehicels, OC would entitile me to the federal tax credit since it is a purchase
  • OC does not include gap insurance, therefore I would have to get that coverage elsewhere
  • OC does not require a leas acquisition fee
  • I still have to pay full sales taz on the OC purchase -- I just wouldn't get double-taxed if I make the balloon payment at contract term
  • There are no rate benefits from fleet, USAA, etc since there is no Money Factor, just an interest rate

I've always skipped OC in the past since I had no intention of buying my leased car at 36 months, but if the tax credits AND finance incentives/rebates apply, I think I'd be foolish not to go that OC route this time. What am I missing here?
From BMW (bold is mine):
When the final payment (the balloon) is due on an Owners’ Choice contract, you have the following options:

You may complete your vehicle purchase by making the final balloon payment.
You may be able to refinance the final balloon payment, subject to certain conditions.
You may be able to sell your BMW back to us at a pre-determined price that is less than the final balloon payment amount, and have the pre-determined price applied towards the final balloon payment amount. If you chose this option, you will owe the difference between the predetermined price of the BMW and the balloon payment amount, and you will no longer own the vehicle. (You may also be able to refinance the difference between the predetermined price of the BMW and the balloon payment amount, subject to certain conditions.)
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