[sygazelle]

First off, I am happy to be joining the ED club and I am picking up my new 328i in Munich next week. Mostly, the purchasing process was flawless, with one glaring exception. That exception is the terms of the Loyalty discount.

I searched F30 post looking for a similar situation and found none.

The Loyalty discount is not about loyalty at all. Yes, you must prove that you have owned a BMW within the last 12 months, but the kicker is that you have to sign up for BMW financing to qualify for the loyalty discount. This would not be a big deal except for the fact that the interest rate BMW quoted is 3.99% while the market rate for new car loans for people with outstanding credit (like me ;-) is 1.99 - 2.29%.

So yes, you get the loyalty discount, but you must commit to BMW financing and pay a rate way above market to get the discount. The only good news is that you can pay off the loan after 4 payments with cash, or a loan from a bank or credit union at market rates.

In the end of the day, this is not a big deal. It just seems to me that BMW would want to engineer incentives to improve the customer experience. Bottom line: I wanted the car and the loyalty discount. In 4 months, I will make a change. BMW, of course, is counting on people not going through the hassle of refinancing the car after the 4-payment requirement is met. I hope I'm not one of them

[BMW_F30]

Loan bank fees may exceed savings offered by loyalty discount. Check it out 1st.

[JasonX4MComp]

BMWFS rate is 2.99 now up to 72 months. Depending on the amount you're financing, you may be better off just financing with a different bank if you can get 1.99% and not worry about the $500 Loyalty

[Pauleebe]

Originally Posted by Jason335iMsport

BMWFS rate is 2.99 now up to 72 months. Depending on the amount you're financing, you may be better off just financing with a different bank if you can get 1.99% and not worry about the $500 Loyalty

+1

Loyalty of $500 is nothing compared to the interest rate of 1% difference over the course of a loan.

[SamS]

Originally Posted by dwalls90

+1

Loyalty of $500 is nothing compared to the interest rate of 1% difference over the course of a loan.

If you're financing <$27,000, then it is better to go with BMWFS @ 2.99% vs. 1.99% available at a variety of places.

[sygazelle]

Originally Posted by BMW_F30

Loan bank fees may exceed savings offered by loyalty discount. Check it out 1st.

Will do. Thanks.

[sygazelle]

Originally Posted by SamS

If you're financing <$27,000, then it is better to go with BMWFS @ 2.99% vs. 1.99% available at a variety of places.

The breakeven (amount financed) is even lower since the BMW is offering me 3.99% instead of 2.99%. I don't know if the higher rate is because of ED or not. My credit is north of 800 so that's not the issue.

I've already agreed to the loan, knowing I will switch after 4 payments.

The essence of my original posts is that this kind of experience diminishes the user experience which is not the point of a loyalty program.

[sygazelle]

Originally Posted by Jason335iMsport

BMWFS rate is 2.99 now up to 72 months. Depending on the amount you're financing, you may be better off just financing with a different bank if you can get 1.99% and not worry about the $500 Loyalty

Thanks for the feedback.

[Mobster1983]

This loyalty dis not is not to entice people to buy a BMW, it is to get them to finance through BMW FS. They make up the money they lose on the sale in interest, no matter the interest rate. As others have already said, you will save far more over the life of the loan if you of for another bank with lower interest. I was able to secure 1.74% interest for 72 months for my 335i.

[Pauleebe]

Originally Posted by SamS

If you're financing <$27,000, then it is better to go with BMWFS @ 2.99% vs. 1.99% available at a variety of places.

Based on what? Looking at a sample loan amortization table for 5 years, there is no way a $500 savings will exceed the savings of 1% on a loan that large for a period of a few years ..

[SamS]

Originally Posted by dwalls90

Based on what? Looking at a sample loan amortization table for 5 years, there is no way a $500 savings will exceed the savings of 1% on a loan that large for a period of a few years ..

I was using a 3 year timeline, forgot to note that.

[Pauleebe]

Originally Posted by SamS

I was using a 3 year timeline, forgot to note that.

Okay, thanks.

It really is case specific, but I would think that the average user finances over 5-6 years, so that $500 incentive quickly becomes useless as the lease period increases.

For the average user, the lowest interest rate is the best financing deal, unless BMW was offering thousands of dollars in incentives if you financed through them.

[PaulBailey@ltbmw]

Your rate should be 2.99%

[Pauleebe]

Originally Posted by PaulBailey@ltbmw

Your rate should be 2.99%

Should be, but dealers can mark it up for profit, or BMS FS will increase it if your credit rating isn't superb.

[s0nu]

So what you do is get the car under BMWFS, then go to your primary bank a month or two later and refinance the car loan to whatever the market rate is. Depending on your bank, there may not even be any fees involved either. For example, I know chase doesnt charge anything.

[Pauleebe]

Originally Posted by s0nu

So what you do is get the car under BMWFS, then go to your primary bank a month or two later and refinance the car loan to whatever the market rate is. Depending on your bank, there may not even be any fees involved either. For example, I know chase doesnt charge anything.

Seems sneaky.

Would BMW allow this?

[sygazelle]

Originally Posted by dwalls90

Seems sneaky.

Would BMW allow this?

It's not sneaky to me. My dealer even told me the obligation to meet the "Loyalty Incentive" requirements is 4 payments. After that, you can 1) keep paying above-market rates, 2) pay the balance in cash , or 3) get a loan with a bank.

I've got a note in my calendar in 4 months to drop this 3.99% BMWFS loan. Mostly on principle. I don't like being forced to take a way-over-priced product to get a loyalty discount. I'm sure BMW does not care, but I'll feel a lot better