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Discussion Starter · #1 ·
This is my first post on this forum. I've been driving around my '08 535 for a while and absolutely loved it. LOVED IT. Got totaled yesterday in a hit and run so now I'm on the search again. Needless to say I'm devastated. In search of a new car at the BMW dealership I went to in Southern California I was offered BMW Select Financing to keep monthly payments low which gives me the advantages of a lease but with no real restrictions which gives me the advantages of ownership (plus I hold the title). I was considering going the traditional financing route but this has really peaked my interested considering 0.9%apr. If the rate wasn't that low I probably wouldn't be considering it. I forget the exact details but I was looking to buy a CPO 2012 328i Premium and tech package with some added features and 29k miles for around $29k if my memory serves me right. I was going to put a $4k down payment. In my case the balloon payment would be $12,500 after 48 months. What is interesting is that I was told if I stick to 15k miles a year, BMW would take the car back from me at that balloon payment. And if I drove it less I could have some equity in the car. If I drove it more I'd risk negative equity. There aren't any mileage restrictions on the car, but that was part of the deal to give me some peace of mind I assume. For anyone that has used Select financing, what have been the pros and cons? These interest rates seem hard to beat. This will be only the 2nd car I've bought on my own so I don't all too much experience which is why I came to this forum to seek a little clarity! Thank you!
 

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If the rates are good it's a great option to keep lower lease size payments with none of the lease restrictions. When the balloon payment is due, you can either pay it, trade the car in, or sell it outright. If you take good care of the car and don't go crazy with miles you should have equity in the car that will be greater then the balloon payment. I know BMW uses 15k a year, which is a lot, in their balloon payment calculation to keep the customer from getting upside down in the end.
 

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Problem with the balloon is you will have to pay a lot more on the balloon payment than the car is going to be worth.
 

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Problem with the balloon is you will have to pay a lot more on the balloon payment than the car is going to be worth.
Just like in a lease... The real difference between lease and Select is the Select there is no mileage restriction on select. I do not plan on keeping my car past my 5 yrs of ownership, but a was too restrictive as I wasn't sure of the mileage I was going to be putting on the car.
 

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Problem with the balloon is you will have to pay a lot more on the balloon payment than the car is going to be worth.
Not true. This is BMW not GM.

If you have expected mileage and the car is in good condition the balloon will be very close to the value of the car (Pvt******). This is from my own experience.
 

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Discussion Starter · #9 ·
Thank you for clearing that. I appreciate it. That is what my sales person at the dealership was telling me but I wasn't sure if he was just blowing hot air at me. I was told staying between 12-15k miles per year would put me in a great position for the balloon payment. Meaning the car wouldn't depreciate below the balloon payment. And I'll probably get GAP insurance as some added protection for worst case scenarios. The lease is too restrictive for me, so I believe this a way to go.
 
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