Bimmerfest BMW banner

1 - 4 of 4 Posts

·
Registered
Joined
·
43 Posts
Discussion Starter #1
I have "Owner's Choice" through BMWFS, a hybrid lease own here in Texas, on my wife's 2017 X5. Does BMW penalize early trade in on another BMW?
 

·
Registered
Joined
·
8,890 Posts
I have "Owner's Choice" through BMWFS, a hybrid lease own here in Texas, on my wife's 2017 X5. Does BMW penalize early trade in on another BMW?
(throwback wordy jjrandorin post inc...)


What exactly do you mean by "penalize"?

"Owners choice" is not a "hybrid lease", its an Ownership program (its right in the name). Owners choice is a car financing LOAN program, with a ballon payment at the end of it, with a guaranteed residual value at the end of the loan term.

Since its not a lease, there is no "early lease turn in process / penalty". You are buying that car with the right to turn it back in at the end of the finance period if you dont want to keep it, without a loss of additional money at the time the ballon payment is due.

If you trade it in before the end of the finance term a dealer will determine trade in value, and offer you what they feel is the value of the car, which is likely no where NEAR what is still owed on the car. That means it is almost 100 percent assuredly "underwater", and any negative balance will be added to your next vehicle.

That amount is likely significant / substantial, unless you put a very large down payment down on the owners choice deal you have now, which is unlikely.

So, there is no "penalty", per se... but you will see a SIGNIFICANT cost (very very very signifiant) because I would bet that the car is significantly under water vs what a trade in value of the car vs the whats owed on it is. Its likely significant enough that you are going to feel like they are penalizing you, when thats not the case.

If you have only had the car 1-2 years (I am just guessing since its a 2017), the difference between what you owe and what its worth is likely 8-12k or something like that, again, unless you put a large down payment on the car.

Take the car to a car max and get a quote from them to buy it. Compare what their price to buy it is vs what you still owe on your loan. That will tell you how much you will lose (keeping in mind that the BMW dealer does not have to offer you what carmax is offering, but it will give you a ball park. The BMW dealer might offer less because I believe in texas there are tax advantages to trading the car in vs just selling it, and they might lower the price of the car because they know you will still have to trade it in for tax purposes).


TL ; DR

No, there is no penalty for trading in a car on owners choice. You are buying the car, not leasing it, so you can sell it or trade it in whenever you want. You wont like how much its underwater though, and will feel like you are being penalized.
 

·
Registered
Joined
·
8,890 Posts
1 - 4 of 4 Posts
Top