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BMW 3-Series and 4-Series Forum (F30 / F32) | F30POST > 2012-2019 BMW 3 and 4-Series Forums > 3 and 4 Series Ordering / Pricing / Order Tracking Forum (and European Delivery) > For US BMW buyers, is balloon financing a good way to go?
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      04-30-2015, 10:01 AM   #23
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Worked out great for me.

I was able to sell my car and come out with a little equity all while paying less than a lease with no mile restrictions. Usually if you sell a car 2 years into a 5yr loan you'll be upside down but not with mine.
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      04-30-2015, 10:06 AM   #24
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I looked at it as buying a 5yr old 50-60k MSport on a BMW dealers lot was going to cost more than the figure of my balloon payment. So that made it appealing and until then I had no mileage restrictions like a lease and my deal had built in gap insurance.
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      04-30-2015, 10:29 AM   #25
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Quote:
Originally Posted by Jamesons Viggen View Post
I looked at it as buying a 5yr old 50-60k MSport on a BMW dealers lot was going to cost more than the figure of my balloon payment. So that made it appealing and until then I had no mileage restrictions like a lease and my deal had built in gap insurance.
Keep in mind however that the 5 yr old BMW on a dealer lot will have been cleaned, repaired, maintenance up-to-date, brakes done, tires newer, etc..

Not quite an apples to apples comparison. Also consider that several folks have been unhappy with the F30 in comparison to previous models. If it turns out you don't like it, your "stuck" in the car (equity-wise) for 3-4 years at-least. Plus the new 2016 models coming out will have a few updates that may be rather appealing, including the possibility of a new steering system.

IMO - Lease if you want low monthly payments or Finance @ 5 yrs if you want to own the car.
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      04-30-2015, 11:05 AM   #26
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Quote:
Originally Posted by wakebord99 View Post
Keep in mind however that the 5 yr old BMW on a dealer lot will have been cleaned, repaired, maintenance up-to-date, brakes done, tires newer, etc..

Not quite an apples to apples comparison. Also consider that several folks have been unhappy with the F30 in comparison to previous models. If it turns out you don't like it, your "stuck" in the car (equity-wise) for 3-4 years at-least. Plus the new 2016 models coming out will have a few updates that may be rather appealing, including the possibility of a new steering system.

IMO - Lease if you want low monthly payments or Finance @ 5 yrs if you want to own the car.
It's possible but BMW is really good on calculating residuals.

As for your comment on the condition of a 5yr old car at the dealer. Don't fool yourself. Those cars sell "As is".
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      04-30-2015, 11:12 AM   #27
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Originally Posted by Spitz428 View Post
Balloon has more flexibility i would say.

How does balloon have more flexibility?

Leases have jump ahead's on occasion, and you can always sell your lease with leasetrader, plus at the end of term you just hand them the keys and walk away.

Balloon if you want out early, you have to sell it and deal with all the negative equity that comes along. At the end of term you have to pay the balloon or refinance it. If you have $18k in the bank you certainly aren't investing it over the term and then drawing it out to pay the balloon. If you do you're doing it wrong. And if you do that you STILL have a depreciated car you can then sell at a loss, more then removing any realistic investment gains short of really lucky horse track bets.

So you are refinancing the balloon, meaning you are now paying (at best) 1.9% over 8 years on the purchase price. Do the math on what the TRUE cost of that car is now. And then calculate your true depreciation loss.

The only car you should ever BUY is the one you will literally never sell.



Quote:
Originally Posted by sjpaul View Post
A lease gets you gap insurance and removes your risk in a loss-of-value situation. If you get into an accident its going to diminish the value of the car. In a lease that's BMWFS's problem. If you use a balloon, its your problem.
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Originally Posted by Polo08816 View Post
I highly recommend balloon financing. It keeps your monthly payment low.

It was the only way I could afford to get myself into a brand new F80 M3 with the amount of student loans I have. YOLO!

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      04-30-2015, 11:16 AM   #28
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Quote:
Originally Posted by F32Fleet View Post
It's possible but BMW is really good on calculating residuals.

As for your comment on the condition of a 5yr old car at the dealer. Don't fool yourself. Those cars sell "As is".
Yeah, when talking with the BMW finance guy about select, he said in the past they, BMW NA, would be to optimistic in the residual value and customer would wind up upside down at the balloon payment time so they went more conservative with the balloon even though it would raise monthly payments slightly. Now the car should have equity at the time of the balloon. Also, you can do select on a cpo.

At the end of the day, we are all buying or borrowing depreciating asset. I could just go buy a Honda and drive in for 20 years, which makes financial sense, but what fun is that? If you're on a car message board, most likely you're a "car guy" so we budget more for car payments. Others spend money on golf, skiing, vacations, alcohol, Vegas, gambling.....granted, I do those things too but we all have our priorities. I like cars and I don't mind a monthly car payment.

Last edited by Buckeyes; 04-30-2015 at 11:25 AM..
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      04-30-2015, 03:32 PM   #29
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Quote:
Originally Posted by wakebord99 View Post
Keep in mind however that the 5 yr old BMW on a dealer lot will have been cleaned, repaired, maintenance up-to-date, brakes done, tires newer, etc..

Not quite an apples to apples comparison. Also consider that several folks have been unhappy with the F30 in comparison to previous models. If it turns out you don't like it, your "stuck" in the car (equity-wise) for 3-4 years at-least. Plus the new 2016 models coming out will have a few updates that may be rather appealing, including the possibility of a new steering system.

IMO - Lease if you want low monthly payments or Finance @ 5 yrs if you want to own the car.
Umm, the car on the lot used after 5 years may be cleaned, but I also like the idea of the car having had every mile put on it by me and so I know it was hand washed, detailed, and maintained and broken in properly. BMW also covers things like brakes during my 4yr/50k of ownership. CPO is great, but it's not a guarantee. Like I said, being able to buy MY car at the stated balloon payment was a great value compared to what would have been on a dealers lot.
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      04-30-2015, 03:36 PM   #30
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Quote:
Originally Posted by Thumper333 View Post

Balloon if you want out early, you have to sell it and deal with all the negative equity that comes along.




I came out with positive equity. It starts from an aggressively negotiated ordered car to begin with. It won't be the case for everyone.
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