[Mattl0806]

Hey guys,

I basically looking to know for sure if a dealer is being truthful. I think not, but they are really sticking to their guns.

Rewind 2 weeks ago, I was about to pull the trigger on a 2021 CPO x5m50 and was approved for 72m at 6.49.

Fast forward to today - a diff dealer - 2022 CPO x5 m50 - coming back at first > 8% and now 7.59%. Something smells very fishy. They said the rates went up…. They also originally wanted me to use their BOA guy who was 8.25 and is also now 7.59 after he “called them”. I cannot stand playing games and will not stomach borrowing cash this high. I’ve got tier 1 credit.. I told them I’d only accept the 6.49 from 2 weeks ago.

I know these programs to not change monthly. But I can’t source this information from anywhere.

Anyone else know this stuff well?

Thanks.

[Medic8]

If you can…walk. They will probably find someone else to buy the car but you don’t have to pay that price. Maybe try a credit union.

Rates do suck right now, but that should not force you into something you don’t want.

[eelnoraa]

I think prime rate increased on 3/23, from 7.75% to 8%. So assuming no extra markup game from the same lender, rate should go up accordingly

[Medic8]

8% might be what THAT bank considers prime…

https://www.rocketmortgage.com/learn/prime-rate

This might give some more insight.

BOA considers prime to be 8% …screw them.

[Mattl0806]

Ok so bc the fomc raised rates the bmw program went up? I.e it’s a floating rate with a spread over the benchmark and the benchmark moved?

If so- Still sucks - fomc raised 25bps and my 6 year loan went up 100bp?! They certainly wouldn’t lower it if it was the reverse.

My limit was borrowing around 6-6.5% anything greater I just can’t stomach. I guess I’ll stick the 2023 loyalty lease which MF is implying 3.x% rate

[Mattl0806]

In the monthly programs does it actually say subject to prime rate fluctuations?

[TurtleBoy]

Originally Posted by Mattl0806

In the monthly programs does it actually say subject to prime rate fluctuations?

No it does not. BMWFS sets the rates based on many different factors. Dealers can then add up to an additional 1% to it. The BMWFS rates should not have changed since two weeks ago since they release them at the beginning of the month. The dealer is sending you to outside sources likely since they make more money.

[Mattl0806]

Originally Posted by TurtleBoy

No it does not. BMWFS sets the rates based on many different factors. Dealers can then add up to an additional 1% to it. The BMWFS rates should not have changed since two weeks ago since they release them at the beginning of the month. The dealer is sending you to outside sources likely since they make more money.

Bingo. Thanks TB! That’s precisely my understanding. Program did not change and they are marking me up. It’s so hard to navigate these crooks!!

[EngineGoBrrr]

Rates for cars loans and mortgages are different and take into account multiple factors. This also adds on top that used car loans are also higher than new car loans. Based on your link, with the discount rate being 5% right now, the prime rate should be at minimum 8%.

Last I checked in the beginning of December 2022, the lowest rate on a new BMW from BMWFS was 4.99%. If you tack on the rate hikes from December 2022 to March 2023 (up 75bps) and the inherent higher rates for used cars, it is not unreasonable to see a 7-8% rate even for a prime borrower. Would I take the deal for 8% today? Absolutely not. But considering the market environment it is not a complete ripoff. Keep in mind that it is a 72 month loan so that will also command a higher rate.

[taek]

Sounds about right for a used car from a big bank like BOA. Chase is similar. No idea why anyone uses them for auto loans.

You'll be able to do much better with a credit union. I've been very happy with PenFed.

[swainbmw]

Originally Posted by Mattl0806

Hey guys,

I basically looking to know for sure if a dealer is being truthful. I think not, but they are really sticking to their guns.

Rewind 2 weeks ago, I was about to pull the trigger on a 2021 CPO x5m50 and was approved for 72m at 6.49.

Fast forward to today - a diff dealer - 2022 CPO x5 m50 - coming back at first > 8% and now 7.59%. Something smells very fishy. They said the rates went up…. They also originally wanted me to use their BOA guy who was 8.25 and is also now 7.59 after he “called them”. I cannot stand playing games and will not stomach borrowing cash this high. I’ve got tier 1 credit.. I told them I’d only accept the 6.49 from 2 weeks ago.

I know these programs to not change monthly. But I can’t source this information from anywhere.

Anyone else know this stuff well?

Thanks.

Originally Posted by Medic8

If you can…walk. They will probably find someone else to buy the car but you don’t have to pay that price. Maybe try a credit union.

Rates do suck right now, but that should not force you into something you don’t want.

Ask them what the bank rate was approved for they have to tell you then you’ll see their mark up on the rate .

[Mattl0806]

Originally Posted by swainbmw

Ask them what the bank rate was approved for they have to tell you then you’ll see their mark up on the rate .

Thanks. I’ll ask them. This applies for bmw financing too?

[Mattl0806]

Originally Posted by EngineGoBrrr

Rates for cars loans and mortgages are different and take into account multiple factors. This also adds on top that used car loans are also higher than new car loans. Based on your link, with the discount rate being 5% right now, the prime rate should be at minimum 8%.

Last I checked in the beginning of December 2022, the lowest rate on a new BMW from BMWFS was 4.99%. If you tack on the rate hikes from December 2022 to March 2023 (up 75bps) and the inherent higher rates for used cars, it is not unreasonable to see a 7-8% rate even for a prime borrower. Would I take the deal for 8% today? Absolutely not. But considering the market environment it is not a complete ripoff. Keep in mind that it is a 72 month loan so that will also command a higher rate.

Don’t disagree with your assessment here but what I’m questioning is the that bmw fs program did have 6.49 in March for 72month used car financing which according to this new dealer has up and disappeared. This should not be the case as every month bmw sets the rates and they do not change for the whole month. The exact same way lease programs work.

I think I have my reassurance this dealer is marking up the 6.49 on me and lying about it.

[Crusje]

If it's am option just pay for it outright. I didn't want to pay 6% interest back in December so I just wrote them a check.

[Mattl0806]

Originally Posted by Crusje

If it's am option just pay for it outright. I didn't want to pay 6% interest back in December so I just wrote them a check.

It’s not a bad idea. That’s kinda where my heads at too but I am willing to pay 2-2.5% spread over my risk free money markets at 4.3% and keep cash liquid - or keep the cash invested in more riskier higher returns profiles.

The 39m loyalty lease on the 40i is where it’s at. .00145 MF - < 4% implied financing. No sense in putting any money into that one. If you end up over paying depreciation at the end of 39m you buy it out and sell.

[AGONXF30]

Anything above 4 percent for a used/new car is a no go for me. Rates did get jacked recently.

[doublezero]

rates have doubled since last year, whew. check your local credit unions and banks like pendfed for better rates. i lean toward financing autos if you are making more money or close to breaking even on the loan rate vs your interest rate of lower risk investment. depends on how liquid you want to be.

but i came here to say, if you're not financing thru your dealer, be sure to know what they will need from you before you pick up vehicle, especially if you're out of state. they may want you to arrive with a full check in hand from your lender. ran into this on my last dealer purchase and it can be a pain.

[Mattl0806]

Called them out on their BS asking for the bank rate etc. told them I confirmed with another financing department at a bmw dealer on the 6.49 still good.

Dealer told me to have a nice day and good luck with the other dealer. Clearly they just want to earn theirs on these rates. Sucks

[EngineGoBrrr]

The dealer will always earn theirs, whether on rates or price. The other dealer might have been more motivated to sell. It all really depends on how long the car has been sitting on the lot. Maybe try talking to them again a few weeks down the line to see if their numbers change. Ball is always in your court so long as you aren't in a hurry. But if you are determined to get this specific car at this specific dealer, you can always take the price and rate now and refinance it later.

[Mattl0806]

Originally Posted by EngineGoBrrr

The dealer will always earn theirs, whether on rates or price. The other dealer might have been more motivated to sell. It all really depends on how long the car has been sitting on the lot. Maybe try talking to them again a few weeks down the line to see if their numbers change. Ball is always in your court so long as you aren't in a hurry. But if you are determined to get this specific car at this specific dealer, you can always take the price and rate now and refinance it later.

Yea good point. It’s not that much of a hit. Refinancing in a year or two would lesson the blow.
But at this point I mind as well get a new one!

[EngineGoBrrr]

I was thinking more of seal the deal now and start looking to refinance ASAP. Years back when shopping for a Golf R the dealer would only sell to me at MSRP only if I was willing to take their high rate loan (about 4% more than VW financing). Keep in mind that this car rarely went for MSRP in my area and usually has a markup in the range of 2-10k. So I took advantage of the price and went out and got a better rate roughly 6 months later.

[eelnoraa]

Originally Posted by EngineGoBrrr

I was thinking more of seal the deal now and start looking to refinance ASAP. Years back when shopping for a Golf R the dealer would only sell to me at MSRP only if I was willing to take their high rate loan (about 4% more than VW financing). Keep in mind that this car rarely went for MSRP in my area and usually has a markup in the range of 2-10k. So I took advantage of the price and went out and got a better rate roughly 6 months later.

Are we in the say SF Bay area?? I have never bought a car above MSPR. 45e is the first MSRP car I bought, it was because the pandemic . All other cars acquired prior to 2020, were below MSPR, sometime way below MSRP like $10k. Live here for 25 years+, probably acquired 7-8 new cars myself. If including family member, maybe 10ish.