Owner's Choice for iPerformance questions - Bimmerfest - BMW Forums



Go Back   Bimmerfest - BMW Forums > BMW Buyers Guide - Dealers, resources, pricing, tips and trick > Ask-A-BMW-Dealer

Ask-A-BMW-Dealer
Talk to our team of BMW Client Advisors from supporting BMW dealerships. Get all of your BMW pricing, ordering, buying, financing, and leasing questions answered here!

Reply
 
Thread Tools Display Modes
  #1  
Old 05-07-2017, 10:00 AM
Ossian512 Ossian512 is offline
Officially Welcomed to the 'Fest
Location: Austin
 
Join Date: Dec 2016
Posts: 100
Mein Auto: 2018 530e
Owner's Choice for iPerformance questions

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?
Reply With Quote
  #2  
Old 05-07-2017, 11:00 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,753
Mein Auto: MINI Clubman S All4
Quote:
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.)
Reply With Quote
  #3  
Old 05-07-2017, 12:18 PM
TXPearl's Avatar
TXPearl TXPearl is offline
Officially Welcomed to the 'Fest
Location: Texas
 
Join Date: Apr 2010
Posts: 1,078
Mein Auto: 2020 X5 M50i
Quote:
Originally Posted by 1968BMW2800 View Post
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.)
If not a typo, that would be a significant change to Owner's Choice. Up until now, you could walk away with a $350 disposition fee.
Reply With Quote
Sponsored Links
Advertisement
 
  #4  
Old 05-07-2017, 01:33 PM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,753
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by TXPearl View Post
If not a typo, that would be a significant change to Owner's Choice. Up until now, you could walk away with a $350 disposition fee.
I was wondering about that myself. I got this info from BMW, but it might be old -- I think we need the current straight scoop from a CA who knows for sure. Clearly, before doing OC, it would be important to have the total exit cost clearly defined, in writing.
Reply With Quote
  #5  
Old 05-07-2017, 05:16 PM
LawdawgGA LawdawgGA is offline
Registered User
Location: Atlanta
 
Join Date: Mar 2017
Posts: 34
Mein Auto: 2014 535i
I am likewise concerned about that sentence. I keep asking my OC and he never answers the question about what happens if the payoff is more than the guaranteed residual.
Reply With Quote
  #6  
Old 05-07-2017, 06:21 PM
paffinity paffinity is offline
Officially Welcomed to the 'Fest
Location: TX
 
Join Date: May 2014
Posts: 251
Mein Auto: F80 ZCP
Woah that's new. Definitely confirm this statement.
Reply With Quote
  #7  
Old 05-07-2017, 08:16 PM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,753
Mein Auto: MINI Clubman S All4
Here's where I found it, under the Owners Choice heading:

https://www.bmwusa.com/secured/conte...y.aspx?define=
Reply With Quote
  #8  
Old 05-08-2017, 07:54 AM
adrian's bmw's Avatar
adrian's bmw adrian's bmw is offline
Officially Welcomed to the 'Fest
Location: BMW of Gwinnett Place
 
Join Date: Feb 2003
Posts: 7,249
Mein Auto: 2015 BMW 328d Sport Wagon
From the OC contract:

"Section 12. Balloon Payment Options

C. Return (Sale) Option: I can satisfy the balloon payment by returning (selling) the Vehicle to you under the following agreement. To use this option, I must satisfy the following requirements: (a) Tell you in writing at least 30 days before the Balloon Payment due date that I want to return (sell) the Vehicle to you; (b) Pay you any amounts owed under the Contract on the due date of the Balloon Payment except the Balloon Payment; (c) Deliver the Vehicle to you at a reasonable place you tell me; (d) Delivery all documents, properly signed, needed to transfer clean title to the Vehicle to you or to a person you tell me to transfer it to; (e) Pay you the Disposition Fee (see Section 4)); (f) Pay you the Excess Mileage Fees, if any, (see Section 4); and (g) Pay you the Excess Wear and Use Charge, if any (see Section 4). You will provide me with a statement of the fees referenced in Section 4 and I will pay you those fees within 30 days after I deliveryt ehVehicle to you. By returning the Vehicle under Return (Sale) Option, I appoint you my attorney-in-fact under the provisions in Section 17. You will release me of my obligation to pay the Balloon Payment when I meet all of these requirements."

Looks like a clean break like a lease return to me.
Reply With Quote
  #9  
Old 05-08-2017, 08:19 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,753
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by adrian's bmw View Post
From the OC contract:

"Section 12. Balloon Payment Options

C. Return (Sale) Option: (b) Pay you any amounts owed under the Contract on the due date of the Balloon Payment except the Balloon Payment; of my obligation to pay the Balloon Payment when I meet all of these requirements."

Looks like a clean break like a lease return to me.
So, if the contract language is clear that the balloon covers the entire balance due for the car (not counting return fee and any excess wear and tear), then the bit about "you will owe the difference between the predetermined price of the BMW and the balloon payment amount" would be moot. Predetermined seems to be the key here.
Reply With Quote
  #10  
Old 05-08-2017, 08:24 AM
adrian's bmw's Avatar
adrian's bmw adrian's bmw is offline
Officially Welcomed to the 'Fest
Location: BMW of Gwinnett Place
 
Join Date: Feb 2003
Posts: 7,249
Mein Auto: 2015 BMW 328d Sport Wagon
Quote:
Originally Posted by 1968BMW2800 View Post
So, if the contract language is clear that the balloon covers the entire balance due for the car (not counting return fee and any excess wear and tear), then the bit about "you will owe the difference between the predetermined price of the BMW and the balloon payment amount" would be moot. Predetermined seems to be the key here.
Agreed. We are taking OC's in for i3's, for example, and the clients are having clean walk away breaks with no repercussions between the value of the car and balloon.
Reply With Quote
  #11  
Old 05-08-2017, 08:33 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,753
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by adrian's bmw View Post
Agreed. We are taking OC's in for i3's, for example, and the clients are having clean walk away breaks with no repercussions between the value of the car and balloon.
Thanks for the info, as always.

In the recesses of my aging brain I remember something about special aspects to the i3 OC deals that may or may not have applied to other models. Not sure, but something was different, I think.

The object lesson here is the same as for ANY sales contract -- know everything you're agreeing to before signing. Doesn't matter what anybody 'says,' it's what's in the contract that counts.
Reply With Quote
Reply

See More Related BMW Stories


Forum Navigation
Go Back   Bimmerfest - BMW Forums > BMW Buyers Guide - Dealers, resources, pricing, tips and trick > Ask-A-BMW-Dealer
Today's Posts Search
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



Forum Jump


All times are GMT -7. The time now is 08:03 AM.


Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2020 DragonByte Technologies Ltd.
© 2001- VerticalScope Inc. All rights reserved.