05-02-2020, 06:36 PM | #1 |
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BMW Financial Owners Choice Financing?
Hey Everyone. I just put an offer in on a M340i because I was told the lease rate dropped to 2.99% in May, but turns out it’s still 3.99%. I’m leasing due to a car allowance and the tax benefits that come with it. The Dealer suggested the Owners Choice option which is 1.99%.
Who has experience with OC? I’m skeptical since programs are created to profit up the business, and I’m not sure if I could write the payments off the same way as a lease. The dealers said it’s essentially a lease but is it? The calculator doesn’t show an option for mileage(kilometers), so I’m not even sure how they determine value at the end of the term. |
05-02-2020, 07:07 PM | #2 |
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Is this the option where you are basically financing but have a balloon payment at the end?
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05-02-2020, 09:11 PM | #3 |
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05-03-2020, 01:49 AM | #5 |
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05-03-2020, 05:19 AM | #6 |
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People are giving wrong information w/o knowing it. OC is like a lease with some differences. Yes there is a balloon payment option at the end but you can walk away like a lease.
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05-03-2020, 06:06 AM | #7 |
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Owners Choice is for people who are indecisive about what they want to do with the car after 3 years.
If you plan to only keep the car for 3 years, leasing will generally be cheaper (than owner's choice). If you plan to keep your car longer than 3 years, then financing will generally be cheaper (than owners choice). However, Owners Choice is generally cheaper than leasing 3 years and then buying out the lease. So if you don't know what you'll want to do after 3 years, it provides the ability to keep the car and pay the balloon payment, or simply walk away from the car like a lease. The main difference here is that the title is put in your name with owners choice. There's also tax implications to each of the methods, so make sure to understand that as it pertains to where you are. (in some areas, you essentially pay double tax if you lease and then buy out the lease - and owners choice helps you avoid that).
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05-03-2020, 07:49 AM | #9 |
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I’ve seen many comments saying if you know you want out after 3 years then a lease is cheaper... but isn’t it based on rates? Currently in Canada the lease rate is 3.99%, it’s half that for Owners Choice at 1.99%. If I can truly walk away then I’d prefer the lower rate but there must be a catch.
In terms of taxes and writing off business expenses there are advantages on lease vs finance as there’s no capital cost allowance restrictions on a lease, but there is if you own so I’m not sure which set of rules you’d use for owners choice. I definitely want to walk after 3 years but I refuse to pay 3.99% so I wait, go to Audi/MB or consider Owners Choice. |
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05-03-2020, 07:51 AM | #10 |
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05-03-2020, 08:29 AM | #11 |
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Generally speaking leasing is cheaper than owners choice if you're walking after 3 years. But obviously these days everything's upside down so it's best to do all of the math. Interest rate isn't the only thing that impacts payment, so it's best to get full payment details for both and just do a comparison to see which one works for you.
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05-03-2020, 09:59 AM | #12 | |
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05-03-2020, 11:41 AM | #13 |
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Well I'm not sure how residual value is handled in the owners choice, if it's the same as with a lease, then you might just have a cheaper option with owners choice.
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05-03-2020, 01:09 PM | #14 |
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I read in some posts they use the same residual calculation as with leases but no evidence of that based on the calculator as there’s no input for mileage. Anyone out there have Owners Choice paperwork to share?
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05-04-2020, 09:35 AM | #15 |
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Stupid question, but what happens if you get an accident with an owners choice car? Not bad enough to total but it appears on a car fax. Would that effect you turning in the car?
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05-07-2020, 05:50 PM | #16 | ||
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Quote:
Quote:
Last edited by TheBingoBalls; 05-07-2020 at 05:59 PM.. |
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05-08-2020, 12:12 PM | #17 | |
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I Believe the difference between the two is that for OC, you can either make the balloon payment at the end and keep the car, or just turn in the keys as you would for a lease. For the BMW Select program, you have to pay the balloon payment at the end. This payment can be financed as well. |
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05-08-2020, 03:56 PM | #18 | ||
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05-16-2020, 03:37 PM | #19 |
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Yea I don't know about Canada . What I see described is what we refer to bmw select.
In the us, owners choice let's you walk away at the end of the term, payoff the balloon amount or refinance the balance. Who owns the car — you do. Your name is in the title . Is there gap insurance - no you have to buy that if you want that in the loan . Is there an aquisition fee— no. With owners choice you are paying interests on the entire balance. There are tax implications as well. Those depend on your particular state. |
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05-16-2020, 04:32 PM | #20 | |
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05-16-2020, 04:36 PM | #21 | ||
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I believe owners choice can be marked up 1% and I've never had a store pass on the base owners choice rate. |
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05-16-2020, 04:59 PM | #22 | |||
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