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      07-23-2019, 06:51 PM   #1
jcochems
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BMW Select Financing Thoughts

Hey folks. I'm certain I must be doing something wrong with the Search feature because I would assume every possible topic to do with BMW would have been discussed ad nauseam in these forums over time, yet I find a strange lack of threads/posts on this topic when I search the forums.

Ordered our 2019 X5 40i. Our original intention was to do the three year lease then purchase our X5 at the end of the lease term. We are people that like to keep cars for 7-10 years so not interested in turning over a new car every three years which Leases seem to be popular for. Purchasing outright with traditional Finance Loan is not an option we want to consider since it makes the monthly payments simply more than we want to spend per month (nothing to do with affordability).

I've googled and researched many articles and watched dozens of Youtube videos on the topic including Pros and Cons, but wanted to ask the collective BMW minds here...

What do you think of BMW Select Financing?

We are considering it over the lease since we have every intention of purchasing at the end of the 3 year lease or 5 year Select term. We're less concerned that there is "potential" the vehicle could be worth less than the balloon amount we'd have to pay at the end of the Select term because if our full intent is to pay the balloon and keep the vehicle what does this matter? The negotiated vehicle price is already the negotiated vehicle price so we would have paid the same "vehicle price" had we purchased the vehicle outright and did 5 year traditional finance.

Thanks for your input.

JC

Last edited by jcochems; 07-23-2019 at 07:11 PM..
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      07-23-2019, 07:22 PM   #2
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I have seen it mentioned briefly in some posts but there has been no real discussions around it that I can recall. If it was me, I would run the number under each scenario and see which one is less expensive. Given the current incentives I would imagine it would be traditional financing, Select and then lease buyout in order of less to most expensive.

In your case it seems like overall cost is not a decision point but rather the monthly cost. In that case, if you are only looking at the 3-5 year cost then go with leasing or Select as long as you have a plan for the lease buyout or balloon.

Good luck and let us know what you decide.
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      07-25-2019, 10:20 AM   #3
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My experiences have been vehicles are worth far less at lease end than the residule (or buy amount) that was set at lease incception. BMW will even offer a promotional incentive to cover the gap with ~ 120 days of lease end, but again, in my case it's still about $5K more than the car is worth. IMO.... if you truly plan on keeping the vehicle 5+ years, go select. If you try to exit before 5yrs, you will likely be upside-down.
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      07-27-2019, 11:19 AM   #4
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For financing, is there any upfront charge (initiation fee)?
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      08-02-2019, 08:00 PM   #5
jcochems
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Thanks for the input TurtleBoy, RRH FXE, appreciate it.

We pick up our new 2019 X5 440i tomorrow! So excited, it's like tomorrow is Christmas. Technically, this will be my wife's (or as I like to affectionately refer to her as, She Who Must Be Obeyed) new primary car as I primarily drive our 2017 440i Convertible, but we're both pretty excited for the X5, especially for road trips here in FL.

We are going to have faith and do the BMW Select. We do have every intention of keeping the X5 for 6, 7, maybe 8 years (we really are people whom prefer to keep cars for a long time).

Thanks again.

JC
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      08-02-2019, 08:21 PM   #6
VTENGR
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Don't know much about the program but it seems from the surface that Select financing simply takes the initial down payment from a traditional loan and throws it on the back end of the select loan in way of a balloon payment. My concern would be that a lot can happen in 5 years. The economy can tank. You can lose jobs. Someone can get very sick. Etc... So if for some reason your financial situation changes and you can't afford the balloon payment you're in a bit of a bind with a car you're upside down on.
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      08-06-2019, 12:35 PM   #7
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Think of the 5-year Select Ballon, as a 5-year lease. You actually finance 5 years, but at the end, you have the option to purchase (loan) for that amount or give the car/suv back just like a lease. The 5-year select is great for people who like to hold on it longer than typical lease and people who have negative equity. It's a great program and I have done it a few times. You can trade out after 4 years as well.

Also, it's unlimited mileage, unlike a lease.
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      08-06-2019, 07:14 PM   #8
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A HUGE downside with select is that if you live in a state that takes based on use tax then select gives you little advantage other than carrying a smaller monthly payment. A lease in a state that charges use tax (vs full sales tax) has you paying tax on the portion of the car that you use. On a $75k car that could mean a significant tax savings on a lease.
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      08-06-2019, 07:19 PM   #9
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Quote:
Originally Posted by MrAndrewArnold View Post
Think of the 5-year Select Ballon, as a 5-year lease. You actually finance 5 years, but at the end, you have the option to purchase (loan) for that amount or give the car/suv back just like a lease. The 5-year select is great for people who like to hold on it longer than typical lease and people who have negative equity. It's a great program and I have done it a few times. You can trade out after 4 years as well.

Also, it's unlimited mileage, unlike a lease.
I don't think this is correct. There is no leasing/turn in involved from what I know and how it is described. It is just a balloon loan nothing special.

https://www.passportbmw.com/BMW-Select-Financing.html
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      08-06-2019, 07:21 PM   #10
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I considered select financing, but when I ran the numbers I think it cost a few thousand more than 5-year financing. I had a thread on it, started by me, probably in early to mid May. It had a poll so should be easy to find if you look at my page and earliest threads I started.

I went ahead and got the 5-year financing. It is costing me $1,200 a month, but I’d rather do that than pull money out of savings (my accounts are earning 9-15% in the past year).

You still get the $2,000 incentive for financing. My payment with select would have been about $900 a month, with a $23,000 balloon at the end of four years (I think, but not sure of details.).

I plan to trade the car in four years when the warranty expires. With the select loan I would have no equity to apply to the next car. With my current loan I should have about $15k.

The boom line: it costs less per month, but a few thousand more in the long run. It isn’t an outrageous difference, but something to consider.

If you check my original thread, it probably has better details.

I hope that helps!
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      08-06-2019, 07:25 PM   #11
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Quote:
Originally Posted by TurtleBoy View Post
I don't think this is correct. There is no leasing/turn in involved from what I know and how it is described. It is just a balloon loan nothing special.

https://www.passportbmw.com/BMW-Select-Financing.html
Correct. It is a loan, not a lease. You own the car, but similar to a lease you have to pay a large payment at the end if you want to keep the car. The balloon loan provides a lot less equity if you want to trade the car in, than a normal loan.
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      08-20-2019, 03:54 PM   #12
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Note that BMW dealers need to also participate in the program and I don't think all of them do, so be sure to ask the dealer you are ordering from first if they even support it.

PenFed has a similar program (for cars, no SUV's) that a lot of us used on our 5-series in the past. If you are a buy and hold type and still might want the car after the initial term, you simply let it expire and then pay off (or re-finance) the balloon amount. It adds some flexibility to your purchase and you can always pay off faster as needed.
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      10-17-2021, 07:07 AM   #13
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Searching the forum for Select feedback. How has your select experience been thus far?
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      10-17-2021, 08:17 AM   #14
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I have done it on our 330e just last month and honestly I should have done it for our X5 purchase last year too. No downsides compared to regular financing and just smaller monthly payments. Finance and sales managers were a little nervous about it since they both have not done any select financing before so weren't sure how to process everything but everything went fine.
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