A Finance Question: Who knows...? - XBimmers

Shaw · 02-06-2013, 08:38 PM

Hi all,
I was wondering if anyone knows or has experienced "switching" the financing policy half way through?
to be more specific: I have a standard finance program (4 years) for my X3 already half way through (with BMW FS). I want to know if it would be possible to switch to a Balloon Finance which entails lower monthly payments with a lump sum at the end on my current finance?

noka · 02-06-2013, 08:40 PM

OK, I'll ask the obvious: Did you ask BMW FS?

Shaw · 02-06-2013, 08:59 PM

Quote:

Originally Posted by noka

OK, I'll ask the obvious: Did you ask BMW FS?

I knew this is the first reply I'd get

Well I have (through the dealership), but they didn't know so they said that they will check with BMW FS...in the meantime I thought to raise the question here, maybe someone has already had this experience...

cfos · 02-06-2013, 09:04 PM

I purchased this past January with BMW financial and was told I had to keep BMW, and their terms, for a minimum of 6 months. After 6 months, I could refinance elsewhere.

Shaw · 02-06-2013, 09:11 PM

Quote:

Originally Posted by cfos

I purchased this past January with BMW financial and was told I had to keep BMW, and their terms, for a minimum of 6 months. After 6 months, I could refinance elsewhere.

well I don't mind keeping it with BMW FS. I am more concerned about switching from "Regular/Standard" finance to "Owner's Choice". That's what I want to know if it is possible...

noka · 02-06-2013, 09:19 PM

Try contacting BMW FS directly (contact info on web site).

daninny · 02-06-2013, 09:56 PM

Ok, I'm just going to throw this out there as I don't know your personal situation. However, often times, you can refinance a loan by paying it off early without penalty. A way you can do what you are asking, I think, is if you're a homeowner.
If you can get or have a home equity line of credit, you can use that to pay off the BMW loan and then make payments as you suggest, but it would also depend on your HELOC terms. Another benefit of a HELOC is that, for now, the interest on the HELOC is tax deductible (at least in the US, not sure about Canada).

rory breaker · 02-06-2013, 11:41 PM

Don't see why not. A payoff is a payoff is a payoff. If a bank writes you a check to pay off BMWFS what should they care. Total assumption but just thinking out loud here...

Shaw · 02-07-2013, 07:00 PM

I got feedback from BMW. BMW FS does not offer "switching" to Owner's Choice. But I can (to your points) pay off (via a bank) and re finance through the bank. Some of them offer Balloon finance. Ofcourse the dealership warned me about higher interest rates financial institutions will offer.

Markap · 02-08-2013, 04:14 AM

It's worth checking. I initially financed it at the dealer but then went to my bank and immediately refi'd with then at 2 pts less. I actually never made a payment on the original loan.

BMWrules7 · 02-08-2013, 02:53 PM

Quote:

Originally Posted by daninny

Ok, I'm just going to throw this out there as I don't know your personal situation. However, often times, you can refinance a loan by paying it off early without penalty. A way you can do what you are asking, I think, is if you're a homeowner.
If you can get or have a home equity line of credit, you can use that to pay off the BMW loan and then make payments as you suggest, but it would also depend on your HELOC terms. Another benefit of a HELOC is that, for now, the interest on the HELOC is tax deductible (at least in the US, not sure about Canada).

Yes, the home equity money is damn near interest free. So, why not?

It all makes perfect sense. And you can pay off the entire HE loan in advance.

But, the thought of wrapping a guilty asset like a luxury car into your house makes me throw up in my mouth a little.

It must be my generation. I am 45.

Niva · 03-07-2013, 02:43 AM

Quote:

Originally Posted by BMWrules7

Quote:

Originally Posted by daninny

Ok, I'm just going to throw this out there as I don't know your personal situation. However, often times, you can refinance a loan by paying it off early without penalty. A way you can do what you are asking, I think, is if you're a homeowner.
If you can get or have a home equity line of credit, you can use that to pay off the BMW loan and then make payments as you suggest, but it would also depend on your HELOC terms. Another benefit of a HELOC is that, for now, the interest on the HELOC is tax deductible (at least in the US, not sure about Canada).

Yes, the home equity money is damn near interest free. So, why not?

It all makes perfect sense. And you can pay off the entire HE loan in advance.

But, the thought of wrapping a guilty asset like a luxury car into your house makes me throw up in my mouth a little.

It must be my generation. I am 45.

+1

Actually the idea of not paying for a car in cash makes me queasy.

daninny · 03-07-2013, 08:12 AM

Quote:

Originally Posted by BMWrules7

Yes, the home equity money is damn near interest free. So, why not?

It all makes perfect sense. And you can pay off the entire HE loan in advance.

But, the thought of wrapping a guilty asset like a luxury car into your house makes me throw up in my mouth a little.

It must be my generation. I am 45.

I'm 48. I think what I had proposed would depend on one's personal financial situation. I do agree that in general it's not wise to tie a luxury car into your house, BUT in essence a HELOC is just like a car loan - you still have to pay it off (except that you get a tax advantage). If there is any concern about defaulting, then you have no business buying a luxury car. It's just basic economics.
In regards to paying cash, what I did for my last 3 or 4 (can't quite remember - I am already 48) of my cars is that I used the HELOC as a "bridge loan." I then paid the loan off within a couple of months. What I didn't want to do was to liquidate any assets to pay off a car.

NYCX3 · 03-09-2013, 02:27 PM

Quote:

Originally Posted by daninny

Ok, I'm just going to throw this out there as I don't know your personal situation. However, often times, you can refinance a loan by paying it off early without penalty. A way you can do what you are asking, I think, is if you're a homeowner.
If you can get or have a home equity line of credit, you can use that to pay off the BMW loan and then make payments as you suggest, but it would also depend on your HELOC terms. Another benefit of a HELOC is that, for now, the interest on the HELOC is tax deductible (at least in the US, not sure about Canada).

I was a financial researcher, and i will say that the suggestion to secure a depreciating liability (car) by sacrificing equity from an asset (your home) isnt the best approach.

daninny · 03-10-2013, 08:06 AM

Quote:

Originally Posted by NYCX3

I was a financial researcher, and i will say that the suggestion to secure a depreciating liability (car) by sacrificing equity from an asset (your home) isnt the best approach.

In most situations, I would have to agree with you. However, to clarify my second response - it would depend upon your financial situation. I don't think it's wise to buy a luxury vehicle if there is any question of financial instability. You have to be absolutely sure that there is no chance of default before you tie up home equity with a car purchase.

It's like using credit cards. I use credit cards for all of my purchases knowing full well that I can and do pay them off in full every month. I use them for the convenience factor and it's a monthly interest free loan to boot. This is not be feasible for some, but for others it's fine.

SoDigito · 03-10-2013, 08:33 AM

I think you made a very good point, but this option is only for those who are financially mature, very responsible with money and know how to handle debts. You should also have a decent equity in your home, such that when you take the HELOC you still have at least 20% equity left in your home. If you are in a high tax bracket and can get a low interest rate HELOC, this become a very sexy trick to minimize the overall amount you spend on finance charges throughout the course of the loan.

02-06-2013, 08:38 PM	#1
Shaw First Lieutenant Drives: 2011 X3 28i &2013 328ix-Luxury Join Date: May 2011 Location: Toronto Posts: 337 iTrader: (0)	A Finance Question: Who knows...? Hi all, I was wondering if anyone knows or has experienced "switching" the financing policy half way through? to be more specific: I have a standard finance program (4 years) for my X3 already half way through (with BMW FS). I want to know if it would be possible to switch to a Balloon Finance which entails lower monthly payments with a lump sum at the end on my current finance?
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02-06-2013, 08:40 PM	#2
noka First Lieutenant Drives: 2013 x35i M-Sport Join Date: Dec 2012 Location: MA Posts: 316 iTrader: (0)	OK, I'll ask the obvious: Did you ask BMW FS? __________________ 2013 x35i (Space Gray, MSport, CW/CWII, DHP, Premium, Premium Sound, Technology, BMW-Apps) Retired: '09 C300 4Matic, '09 GTI, '06 750i, '05 C55, '04 R32, '03 M5, '02 GTI, '01 M5, '00 M-Coupe, '00 540i/6, '99 M3 Coupe, '98 M3 Coupe, '96 328i,... '86 4000 CS Quattro... too many to list.

02-06-2013, 09:19 PM	#6
noka First Lieutenant Drives: 2013 x35i M-Sport Join Date: Dec 2012 Location: MA Posts: 316 iTrader: (0)	Try contacting BMW FS directly (contact info on web site). __________________ 2013 x35i (Space Gray, MSport, CW/CWII, DHP, Premium, Premium Sound, Technology, BMW-Apps) Retired: '09 C300 4Matic, '09 GTI, '06 750i, '05 C55, '04 R32, '03 M5, '02 GTI, '01 M5, '00 M-Coupe, '00 540i/6, '99 M3 Coupe, '98 M3 Coupe, '96 328i,... '86 4000 CS Quattro... too many to list.

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02-06-2013, 09:04 PM	#4
cfos New Member Drives: 2013 X3 xDrive28i Join Date: Jan 2013 Location: MST Posts: 13 iTrader: (0)	I purchased this past January with BMW financial and was told I had to keep BMW, and their terms, for a minimum of 6 months. After 6 months, I could refinance elsewhere.

02-06-2013, 09:56 PM	#7
daninny Enlisted Member Drives: Cayman S Join Date: Jun 2012 Location: NY Posts: 39 iTrader: (0)	Ok, I'm just going to throw this out there as I don't know your personal situation. However, often times, you can refinance a loan by paying it off early without penalty. A way you can do what you are asking, I think, is if you're a homeowner. If you can get or have a home equity line of credit, you can use that to pay off the BMW loan and then make payments as you suggest, but it would also depend on your HELOC terms. Another benefit of a HELOC is that, for now, the interest on the HELOC is tax deductible (at least in the US, not sure about Canada).

02-06-2013, 11:41 PM	#8
rory breaker Private First Class Drives: C63 Join Date: Aug 2012 Location: NC Posts: 115 iTrader: (0)	Don't see why not. A payoff is a payoff is a payoff. If a bank writes you a check to pay off BMWFS what should they care. Total assumption but just thinking out loud here...

02-07-2013, 07:00 PM	#9
Shaw First Lieutenant Drives: 2011 X3 28i &2013 328ix-Luxury Join Date: May 2011 Location: Toronto Posts: 337 iTrader: (0)	I got feedback from BMW. BMW FS does not offer "switching" to Owner's Choice. But I can (to your points) pay off (via a bank) and re finance through the bank. Some of them offer Balloon finance. Ofcourse the dealership warned me about higher interest rates financial institutions will offer.

02-08-2013, 04:14 AM	#10
Markap Private Drives: 2011 X3 2.8 Join Date: Dec 2011 Location: Virginia Posts: 94 iTrader: (0) Garage List 2011 X3 2.8 [0.00] 2003 BMW F650GS [0.00] 2008 Volvo C70 'vert [0.00] 1999 BMW R1100RS [0.00] 1993 BMW K75S [0.00]	It's worth checking. I initially financed it at the dealer but then went to my bank and immediately refi'd with then at 2 pts less. I actually never made a payment on the original loan.

03-10-2013, 08:33 AM	#16
SoDigito New Member Drives: 2013 BMW X3 35i Join Date: Sep 2012 Location: Readington, NJ Posts: 21 iTrader: (0)	I think you made a very good point, but this option is only for those who are financially mature, very responsible with money and know how to handle debts. You should also have a decent equity in your home, such that when you take the HELOC you still have at least 20% equity left in your home. If you are in a high tax bracket and can get a low interest rate HELOC, this become a very sexy trick to minimize the overall amount you spend on finance charges throughout the course of the loan.