[LuckyBrand]

Hello all. I'm reposting this in it's own thread as I didn't get any response from an earlier post in a different thread. I do appreciate this whole BMW community and it's vast knowledge. It has helped myself and so many others out. Below is the start of my dealings. Let me know what you think. I also did just apply and got accepted for the military discount from my dad being a veteran. So my below numbers may change depending on how that plays out. I've been reading up a ton on that one as far as some of the caveats of it. So if you have any good information on financing and use of incentives with the military discount let me know. I will cut and past a part of the rules below and is says something about you can finance through BMW without a promotional APR and still use the military discount? What does that mean? I may have to sign up with Navy Federal as my local rates are horrendous and BMW current rates are in the 5s.

"Eligible customers who purchase new MY23/MY24/MY25 BMWs with cash, or who finance with financial institutions other than BMW Financial Services, or who finance through BMW Financial Services without a promotional APR offer can receive the following purchase credits: $1500 on 2/X1/X2, $2500 on 3/4/Z4, $3000 on i4/X3/X4, $4000 on 5/i5/7/8/X5/X6/X7/XM and $5000 on i7/iX."

I had my dealer quote me some numbers on a 25. He said no loyalty or incentives are showing currently but he expects that to change soon.
I didn't have to work to hard to get 6% off so I think I can maybe do a touch better and hopefully I can get some loyalty and better interest rates in the future. Also I can get the supplier discount, which is not accounted for in the figures, but it's usually about a grand to $1500. Can I stack that with loyalty? We set the price about a grand higher than the 24 just in case the prices change enough we have a cushion. So that may change as well.

X5 40i
Lease
$84,000 selling
$4,960 discount
$79,040 adjusted
$24 CVR
$260 doc fee
$17.04 tax
$16 title fee
$5 license fee
$10 transfer fee
$925 BMW acquisition fee
$80,297.04 balance

36 months. 0 down. 1699 total drive off. 12,000 miles a year. 51% residual. .0021 MF which he said was marked up.

$1367 to $1387 payment.

To just buy it as to be honest the price difference isn't that much and leasing isn't as good as it used to be as we all know.

X5 40i
$84,000 selling
$4,960 discount
$79,040 adjusted
$24 CVR
$260 doc fee
$4,759.44 tax
$15 title fee
$5 license fee
$10 transfer fee
$84,113.44 balance

60 months. 0 down. BMW rate and marked up but negotiable possibly.
$1603 to $1623

72 months. 0 down. BMW rate and marked up but negotiable possibly.
$1390 to $1410

What do you think so far? I think I might just buy over lease at this point.

[TurtleBoy]

Your discount is pretty good considering it is a new model year. You may be able to push to 8% or so but perhaps not.

The domestics military incentive is always available whether you finance/lease with BMW or not. The difference is that if you do finance/lease with them then the incentive amount drops to $500.

I'm assuming you are referring to the corporate sales program when talking about a supplier discount. The current amount. for that is $1,000 but it can not be combined with any other incentives including military.

Whether you lease or not would be up to you. There are reasons to lease but at this time financial is not really one of them.

[LuckyBrand]

As we get more serious, I will try to get more on the initial discount and also try to get them to come in closer to the base rates lease or finance.

Yes the corporate program. Can you combine that with military if you use outside financing? I thought I read somewhere you could? You also can't use loyalty with military correct?

Yep, even my dealer said lease deals are trash right now. We will most likely buy.

[TurtleBoy]

Originally Posted by LuckyBrand

Yes the corporate program. Can you combine that with military if you use outside financing? I thought I read somewhere you could? You also can't use loyalty with military correct? .

You can't combine Corporate with any other incentives, whether or not you finance has no bearing on that. It can be combined with APR credits or lease cash though but they are not being offered.

No, loyalty and military are stackable.

[eelnoraa]

I quickly did some math. I think the lease deal checks out fine. Not saying good or bad, the RV and MF are set by BMWFS, non negotiable. I wonder if MSD is still possible these days to lower MF. Otherwise, with the discount, it is the payment.

For the purchase option, the interest interest rate seems super high. Total balance is $80297.04. So before interest, 72-month term makes monthly payment of $1168. I take the mid point between your estimated monthly payments. That is $1613. So each month, interest along is $445. Annual interest is $5337. Since you are doing $0 down, average balance of the loan through entire term is half of total balance, $42057. If I take annual interest divided by this average balance, I get 12.7% APR. This number is a quick hand calculation, so not necessary 100% accurate, but close enough to indicate the high interest. Why so high?

For comparison, MF = 0.0021 => APR = 5.04%. If I use the same APR for loan, you monthly interest will be reduce to $177, making monthly payment of $1345 for 72 month.

Did I miss anything?

[LuckyBrand]

Originally Posted by TurtleBoy

You can't combine Corporate with any other incentives, whether or not you finance has no bearing on that. It can be combined with APR credits or lease cash though but they are not being offered.

No, loyalty and military are stackable.

Loyalty and military are only stackable through bmwfs correct? And it would drop the military to $500 though correct?

[LuckyBrand]

Originally Posted by eelnoraa

I quickly did some math. I think the lease deal checks out fine. Not saying good or bad, the RV and MF are set by BMWFS, non negotiable. I wonder if MSD is still possible these days to lower MF. Otherwise, with the discount, it is the payment.

For the purchase option, the interest interest rate seems super high. Total balance is $80297.04. So before interest, 72-month term makes monthly payment of $1168. I take the mid point between your estimated monthly payments. That is $1613. So each month, interest along is $445. Annual interest is $5337. Since you are doing $0 down, average balance of the loan through entire term is half of total balance, $42057. If I take annual interest divided by this average balance, I get 12.7% APR. This number is a quick hand calculation, so not necessary 100% accurate, but close enough to indicate the high interest. Why so high?

For comparison, MF = 0.0021 => APR = 5.04%. If I use the same APR for loan, you monthly interest will be reduce to $177, making monthly payment of $1345 for 72 month.

Did I miss anything?

On the buy I have down $84,113.44.

[TurtleBoy]

Originally Posted by LuckyBrand

Loyalty and military are only stackable through bmwfs correct? And it would drop the military to $500 though correct?

Yes, you have to finance/lease with BMWFS in order to get the loyalty incentive. Correct, given the current military incentive for not using BMWFS it doesn't make sense to use them just to get loyalty since the total would be less than the military alone when not using BMWFS.

[LuckyBrand]

Originally Posted by TurtleBoy

Yes, you have to finance/lease with BMWFS in order to get the loyalty incentive. Correct, given the current military incentive for not using BMWFS it doesn't make sense to use them just to get loyalty since the total would be less than the military alone when not using BMWFS.

I've been talking with my dealer as well today and pretty much we're all aligned in this which is what I'm after. I asked him about the lenders they use outside of BMWFS and if they are competitive and he said they are running at least 1 to 2% higher than BMW. I did look as well at some local stuff and they are pretty damn high. I am going to try and join Navy Federal as they look to be promising along with the military discount that I could then easily maximize the benefit. If I can't go through something like them, then it makes the military discount not as enticing because the interest is so much more. Loyalty is $1000 right now I believe and I can stack that with my supplier discount which is $1000 my dealer said if using BMWFS. So just have to see what I can do and run all the possibilities.

[TurtleBoy]

Originally Posted by eelnoraa

I quickly did some math. I think the lease deal checks out fine. Not saying good or bad, the RV and MF are set by BMWFS, non negotiable. I wonder if MSD is still possible these days to lower MF. Otherwise, with the discount, it is the payment.

For the purchase option, the interest interest rate seems super high. Total balance is $80297.04. So before interest, 72-month term makes monthly payment of $1168. I take the mid point between your estimated monthly payments. That is $1613. So each month, interest along is $445. Annual interest is $5337. Since you are doing $0 down, average balance of the loan through entire term is half of total balance, $42057. If I take annual interest divided by this average balance, I get 12.7% APR. This number is a quick hand calculation, so not necessary 100% accurate, but close enough to indicate the high interest. Why so high?

For comparison, MF = 0.0021 => APR = 5.04%. If I use the same APR for loan, you monthly interest will be reduce to $177, making monthly payment of $1345 for 72 month.

Did I miss anything?

MF is negotiable in so far as having the dealer not mark it up the .00040 that they are allowed to.

You loan calculations are not correct. First of all the initial balance would be 84,113.44 not the 80,297.04 you used. Also keep in mind that the loans are calculated differently so the interest is based on the balance so it is not equal throughout the life of the loan.

The numbers he is showing seem to be correct. A 60 month loan amount of 84,113.44 at a rate of 6.29% would have a monthly payment of 1,637.51. A 72 month loan of that amount at a rate of 6.29% (not saying it is available) would have a payment of 1,405.54 a month.

[TurtleBoy]

Originally Posted by LuckyBrand

I've been talking with my dealer as well today and pretty much we're all aligned in this which is what I'm after. I asked him about the lenders they use outside of BMWFS and if they are competitive and he said they are running at least 1 to 2% higher than BMW. I did look as well at some local stuff and they are pretty damn high. I am going to try and join Navy Federal as they look to be promising along with the military discount that I could then easily maximize the benefit. If I can't go through something like them, then it makes the military discount not as enticing because the interest is so much more. Loyalty is $1000 right now I believe and I can stack that with my supplier discount which is $1000 my dealer said if using BMWFS. So just have to see what I can do and run all the possibilities.

As mentioned before, you can not stack anything with the Corporate discount.

If you can't qualify for NFCU, then go for PenFed sine their rates are lower than a marked-up BMWFS rate.

[LuckyBrand]

Originally Posted by TurtleBoy

As mentioned before, you can not stack anything with the Corporate discount.

If you can't qualify for NFCU, then go for PenFed sine their rates are lower than a marked-up BMWFS rate.

Much appreciated! I am double checking with my dealer since he is the one that said I could stack them. Just trying to get all my ducks in a row. I will let you know what he comes back with.

[TurtleBoy]

Originally Posted by LuckyBrand

Much appreciated! I am double checking with my dealer since he is the one that said I could stack them. Just trying to get all my ducks in a row. I will let you know what he comes back with.

He's wrong.



https://bmwna.jotform.com/83125576463158

[LuckyBrand]

Originally Posted by TurtleBoy

He's wrong.

Attachment 3402654

https://bmwna.jotform.com/83125576463158

Yep. He is lol. I just looked myself before you sent this and found the same. Well that makes the military incentive and outside financing even more attractive then if I find a good rate. Really not much for incentives right now from BMW on the inside. Bummer.

Thanks again buddy!

[eelnoraa]

Originally Posted by LuckyBrand

On the buy I have down $84,113.44.

Sorry, I completely misread the numbers. Just redo quick calculation

$84113.44 initial balance, 6.29%, 60 month => $1639/mon
$84113.44 initial balance, 6.29%, 72 month => $1402/mon

I misread as $84113.44 initial balance, 72 month with $1644/mon. This calculate to 12%

TurtleBoy I think for auto loan, since at Day 0, borrower owns full amount, pay interest on full amount. After the last payment date, borrower own the $0, own $0 interest. So using average balance of the term should be very good quick estimation to if go down into the detail of month to month interest vs principle break down. The above is with that. I am away from PC, will check again actual calculator and compare tonight

[TurtleBoy]

Originally Posted by eelnoraa

Sorry, I completely misread the numbers. Just redo quick calucation

$84113.44 initial balance, 6.29%, 60 month => $1639/mon
$84113.44 initial balance, 6.29%, 72 month => $1402/mon

I misread as $84113.44 initial balance, 72 month with $1644/mon. This calculate to 12%

TurtleBoy I think for auto loan, since at Day 0, borrower owns full amount, pay interest on full amount. After the last payment date, borrower own the $0, own $0 interest. So using average balance of the term should be very good quick estimation to if go down into the detail of month to month interest vs principle break down. The above is with that. I am away from PC, will check and compare tonight

I was referring to a couple of different things. The first was that the balance figure you were using was for the lease and not the loan.

More importantly though, was making sure folks know that that loan interest is not calculated or apportioned like you showed. Unlike a lease where the "principal" and interest is the same each month, with a car loan the interest is based on the outstanding balance and declines each month. This is shown in an amortization table which often accompanies car loan documentation.



Run the numbers, but I think you will find that your average method does not work for auto loans. Here is what I got using your method, as I understand it, and it is off over $1,000. If we have the 84,113.44 balance that would mean the average balance would be 42,056.72. 6.29% of that would be 2,645.37 times 6 years would be a total of 15,872.22 in interest. However when you look at what the interest would be on that loan it would be a total of 17,086.



I think the problem with your methodology is because you are basing your interest on the assumption that the principal amount is being reduced proportionally to the time period into the loan. In other words, the balance of the principal would be half of the initial balance halfway into the loan but it is not. As you can see in the amortization table, the principal reduction starts off very low and increases as the loan progress. At the halfway point of the loan the principal balance is greater than half the initial balance.



Was I misunderstanding your methodology or does that make sense?

[eelnoraa]

Originally Posted by TurtleBoy

I was referring to a couple of different things. The first was that the balance figure you were using was for the lease and not the loan.

More importantly though, was making sure folks know that that loan interest is not calculated or apportioned like you showed. Unlike a lease where the "principal" and interest is the same each month, with a car loan the interest is based on the outstanding balance and declines each month. This is shown in an amortization table which often accompanies car loan documentation.

Attachment 3402708

Run the numbers, but I think you will find that your average method does not work for auto loans. Here is what I got using your method, as I understand it, and it is off over $1,000. If we have the 84,113.44 balance that would mean the average balance would be 42,056.72. 6.29% of that would be 2,645.37 times 6 years would be a total of 15,872.22 in interest. However when you look at what the interest would be on that loan it would be a total of 17,086.

Attachment 3402721

I think the problem with your methodology is because you are basing your interest on the assumption that the principal amount is being reduced proportionally to the time period into the loan. In other words, the balance of the principal would be half of the initial balance halfway into the loan but it is not. As you can see in the amortization table, the principal reduction starts off very low and increases as the loan progress. At the halfway point of the loan the principal balance is greater than half the initial balance.

Attachment 3402744

Was I misunderstanding your methodology or does that make sense?

No disagreement at all. Your calculation produce the exact accurate number. Using the average balance method is an approximation, sanity check if calculation power is limited.

[TurtleBoy]

Originally Posted by eelnoraa

No disagreement at all. Your calculation produce the exact accurate number. Using the average balance method is an approximation, sanity check if calculation power is limited.

[LuckyBrand]

Originally Posted by TurtleBoy

As mentioned before, you can not stack anything with the Corporate discount.

If you can't qualify for NFCU, then go for PenFed sine their rates are lower than a marked-up BMWFS rate.

I found out you don't need to wait 60 days after signing up with NFCU to take a loan out. As soon as you sign up you can apply which is awesome! And their rates rock comparatively.

Thanks for the help!

[TurtleBoy]

Originally Posted by LuckyBrand

I found out you don't need to wait 60 days after signing up with NFCU to take a loan out. As soon as you sign up you can apply which is awesome! And their rates rock comparatively.

Thanks for the help!

You don't have to wait although you may not get the lowest advertised rate if you are a new member. Let us know what you end up getting compared to what is advertised.

[LuckyBrand]

Originally Posted by TurtleBoy

You don't have to wait although you may not get the lowest advertised rate if you are a new member. Let us know what you end up getting compared to what is advertised.

Oh really? Hmm. Boy that would be a kick in the butt if the case and why I was looking at them. I may have to call and ask but ultimately may not know until I actually apply. If I can get at least close though I'd be happy and still get the 4 grand from incentive. I will definitely update once we pull the trigger.

[blau808]

Originally Posted by LuckyBrand

Oh really? Hmm. Boy that would be a kick in the butt if the case and why I was looking at them. I may have to call and ask but ultimately may not know until I actually apply. If I can get at least close though I'd be happy and still get the 4 grand from incentive. I will definitely update once we pull the trigger.

FYI BMWFS has a 2.99% rate for X5's through April 1st.

https://www.bmwusa.com/special-offers.html

I did the math, and for myself, its a wash between $4000 military discount and paying 4.99% for 5 years through NavyFCU, vs the interest saved with a 2.99% rate over the same 5 year term.