BMW Balloon option?

[PeteMoss]

Hi all,

I'm new to the forum and needed some advice. I'm planning on buying a 2011 CPO x5 Premium with 26k miles (Blue). Comes with the technology, comfort and convenience packages plus running boards, 19" rims... The main warranty expires 1/2015 and the CPO expires 1/2016 (1 year factory + 2 years CPO warranty).

My wife and I don't want to hold on to the car (or any BMW) past the warranty CPO expiration date. We would rather trade it in for a new BMW after the 3 years.

So here it goes. It was suggested by my dealer to take the BMW balloon 48 month option because its less money out of pocket and I wouldn't need to worry about the last payment because of the trade it. Kind of like a lease but with the ownership benefits.

Based on 42,995.
APR. 3.9
Cash down: 10,000.
Monthly Payment: 489
Last payment: 17,894.

Since we don't plan to keep the car, it didn't make sense to going with a tradition loan and hold it past the warranty. Instead, trade it in for another CPO or new car. Given my circumstances, is this a bad idea? Shouldn't I have equity in the car with this loan?

I like the idea of getting into a new (CPO) car every three years, as long as the payment is cheap.

Thanks!

[Brainofjjj]

A balloon is generally a bad idea on a new car much less a used one. Why not get a 1.9 apr loan for 60 months and pay 750 a month and keep your 10k?

[PeteMoss]

Originally Posted by Brainofjjj

A balloon is generally a bad idea on a new car much less a used one. Why not get a 1.9 apr loan for 60 months and pay 750 a month and keep your 10k?

The objective is to keep the payment low however, where is a good place to get 1.9%?

I don't see putting more than 10K miles on it a year (15K if it was my only car). If I only drive it, maybe 5K since my wife drives another car. Considering the low milage factor (and if I baby it), I think I would have a better chance holding a residual value greater than the final payment if I turn it in before the CPO warranty ends.

That being said, I been reading if I get the select loan at 1.9%, it could be worth the effort. Need to search more for the traditional 1.9% options.

[Brainofjjj]

I've gotten 1.9 from PenFed and BofA in the last year. Id personally rather pay more per month and keep my 10k to invest.

Also I just bought a fully optioned 2012 diesel with sport for 44k. It had 16k miles and came from a dealer.
You can do better on your deal. Low ball the shit out of them and walk away.

[trev230]

Penfed for the 1.9%! I've done 5 loans with them now. Even got 1.49% last year at one point! Simple and easy process, you do it all online.

[PeteMoss]

Originally Posted by Brainofjjj

I've gotten 1.9 from PenFed and BofA in the last year. Id personally rather pay more per month and keep my 10k to invest.

Also I just bought a fully optioned 2012 diesel with sport for 44k. It had 16k miles and came from a dealer.
You can do better on your deal. Low ball the shit out of them and walk away.

Thanks for the tip. I'll look into Penfed and BofA.

The numbers presented were the first thing that came out of his mouth. I didn't even negotiate yet. He immediately took 4k off the car to make it look like he was helping me out...

I'll weigh the options after we have an exchange in real numbers.

[O4x5dude]

I just signed papers on a 2011 E70, I'm told that they charge compound interest on the Balloon Payment.

[Aquariu///M]

I would not go that route, why not lease a new one?

[PeteMoss]

Well, I didn't go that route. Ending up with a 2011 Blue X5 with the technology, cold weather and convenience packages plus running boards, Sirius, 19" rims but with 15K miles.

40k @ 2.39% 60 month.