[TorontoGambler]

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.

[Burrcold]

Is this the option where you are basically financing but have a balloon payment at the end?

[ReaperKK]

Originally Posted by Burrcold

Is this the option where you are basically financing but have a balloon payment at the end?

I've never heard of this but I'd confirm with the dealer that this isn't a ballon-type loan (unless it's what you're looking for)

[TorontoGambler]

It is indeed the one with the balloon payment but they’re telling me I can walk away at the end just like a lease.

[Preciseyyc]

Originally Posted by TorontoGambler

It is indeed the one with the balloon payment but they’re telling me I can walk away at the end just like a lease.

Nope you owe the amount I do these all the time for lower rates

[penet05]

Originally Posted by Preciseyyc

Nope you owe the amount I do these all the time for lower rates

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.

[wtwo3]

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).

[ReaperKK]

Consider me corrected, I've never heard of this before.

[TorontoGambler]

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.

[TorontoGambler]

Originally Posted by Preciseyyc

Nope you owe the amount I do these all the time for lower rates

So what have you done at the end, have you walked? Are there extra fees or pain to walk vs a lease?

[wtwo3]

Originally Posted by TorontoGambler

Currently in Canada the lease rate is 3.99%, it’s half that for Owners Choice at 1.99%.

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.

[TorontoGambler]

Originally Posted by wtwo3

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.

I’ve asked for a quote with OC so I can see the differences but if we start with the same msrp and discount, it likely will come down to the interest rate, maybe some of the smaller fees as well.

[wtwo3]

Originally Posted by TorontoGambler

I’ve asked for a quote with OC so I can see the differences but if we start with the same msrp and discount, it likely will come down to the interest rate, maybe some of the smaller fees as well.

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.

[TorontoGambler]

Originally Posted by wtwo3

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.

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?

[ReaperKK]

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?

[TheBingoBalls]

Originally Posted by penet05

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.

I think there's a bit of misinformation. I do not know how OwnersChoice works in the States but OwnersChoice in Canada is essentially a balloon finance, there is no turn it - you're paying/financing to own the car. At the end of the balloon finance, you are either paying out the balloon amount or refinancing.

Customers purchasing their vehicle on an OwnersChoice® contract enjoy the benefit of significantly lower monthly payments versus a traditional loan, and no KM restrictions or maturity bill that comes with a lease.

This is achieved by making a single, lump-sum “balloon” payment upon maturity of the contract. The balloon payment is mandatory, but Customers are permitted to refinance their Balloon, in full, through BMW FS (subject to Credit Approval and sales program availability).

[Skyrider01]

Originally Posted by TheBingoBalls

I think there's a bit of misinformation. I do not know how OwnersChoice works in the States but OwnersChoice in Canada is essentially a balloon finance, there is no turn it - you're paying/financing to own the car. At the end of the balloon finance, you are either paying out the balloon amount or refinancing.

There is another similar program called BMW select. I believe that is what you are referring to.

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.

[TheBingoBalls]

Originally Posted by Skyrider01

There is another similar program called BMW select. I believe that is what you are referring to.

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.

Again, BMW USA might have different programs but in Canada, there is only a standard lease, standard finance or OwnersChoice - you get the benefit of lease-like payments in exchange for buying out the car or refinancing when the balloon payment becomes due.

[arciga18]

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.

[Burrcold]

Originally Posted by arciga18

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.

The only difference in Canada is that you can't walk away. You have to pay off or refinance the balloon residual.

[arciga18]

Originally Posted by Burrcold

The only difference in Canada is that you can't walk away. You have to pay off or refinance the balloon residual.

the other thing that I have encountered is that if you push you can easily fine the base money factor and convince a store to pass that on to you.

I believe owners choice can be marked up 1% and I've never had a store pass on the base owners choice rate.

[TheBingoBalls]

Originally Posted by arciga18

the other thing that I have encountered is that if you push you can easily fine the base money factor and convince a store to pass that on to you.

I believe owners choice can be marked up 1% and I've never had a store pass on the base owners choice rate.

That's the other thing with Canada, there is no playing around with interest rates - whatever numbers BMW releases in the program for the month, that's what it is. There's a lot of variation with numbers in the States, Canada is very straightforward.