36 month balloon or 60 month finance @ 1.9%

RMA · 06-03-2009, 05:21 PM

I know this topic was gently covered a week or so back but I am still on the fence. I will be signing the papers any day this week on a 2009 135i coupe (AW/CR) ZMP, ZPP factory options only (list price $41,375). Anyway with my trade in the equation the ballon is $550 a month for 36 months with a ballon of $23,175 (that will be partially financed or pay in cash, etc) at the end of 36 months. Or finance the whole thing @ a lil over $700 a month and be done with it for 60 months. I love the $550 a month deal but also at the same time at the end of a 36 month finance I will have $17k balance (give or take) with 2 years remaining @ the 1.9%.

new2the3 · 06-03-2009, 05:33 PM

Option 1 baloon = $42,975 total
Option 2 regular finance = ~710/month (you did not specify exactly) = $42,600.

If that is the case, and you only save $375 by doing a traditional finance then I would go with option 1 and enjoy 3 years of lower payments. That is if you are going to pay the balloon amount off in cash.

Otherwise if you were going to refinance the balloon amount at month 36, you would have been a bit better off just doing a regular finance from the beginning.

RMA · 06-03-2009, 08:39 PM

That is what I was thinking as well...chances of paying or wanting to pay in cash 23k 3 years from now is not too appealing

& if I finace part of that amount who knows where rates will be on a 3 year old car by then

AlBel1214 · 06-03-2009, 09:01 PM

Thumbs down to the balloon.. play it safe my friend or you will be kicking yourself when thata 23K payment comes rolling around!

adk749 · 06-03-2009, 09:28 PM

Option 1. It is not even a close call. Take the $7,000 you will save in monthly payments and combine it with the value of the car at the end of the 36 months to pay off your balloon. I assure you that you will not need to use all $7,000 and then get a NEW car in three years, doing it all over again. Do not be afraid of the balloon.

FORCED AIR · 06-03-2009, 09:30 PM

So since you are considering a 60 month standard finance...I am curious why you aren't also looking at the 60 month balloon?
Yes there would be the balloon payment at the end of 5 years but it would be smaller and by then you could either pay in cash or trade in to pay off the balance.

RMA · 06-03-2009, 10:09 PM

Thought about that one as well (4-5 year) but figured just keep it at 3 year being the residual id its best @ 36 months 56% (ballon residuals are different than lease residuals btw).

FORCED AIR · 06-03-2009, 11:27 PM

true true....but if you are fine with keeping the car for 5 years anyway....doesn't BMW have a guarantee on the cars value that goes with the select program? Or maybe that is just in UK.

RMA · 06-04-2009, 06:06 AM

Yes the residual is non negoitable at the end of the term for a balloon (unlike a lease). My guess would be that the cars value would be closer to $20ish with 50-60k or 3 years. So in reality I would be somewhat upside down by then. If I did the standard financing after 3 years there would be approx. $17ish owed (& 2 more years left @ 1.9). So there is apparently a $6k spread there...would make sense being the $160 difference is around $6k for 3 years if you do the math. Decisions, decisions...

06-03-2009, 05:21 PM	#1
RMA Major 38 Rep 1,015 Posts Drives: 2009 135i M sport coupe Join Date: Jul 2008 Location: Tampa, Fl iTrader: (6) Garage List 2009 135i M sport c ... [0.00]	36 month balloon or 60 month finance @ 1.9% I know this topic was gently covered a week or so back but I am still on the fence. I will be signing the papers any day this week on a 2009 135i coupe (AW/CR) ZMP, ZPP factory options only (list price $41,375). Anyway with my trade in the equation the ballon is $550 a month for 36 months with a ballon of $23,175 (that will be partially financed or pay in cash, etc) at the end of 36 months. Or finance the whole thing @ a lil over $700 a month and be done with it for 60 months. I love the $550 a month deal but also at the same time at the end of a 36 month finance I will have $17k balance (give or take) with 2 years remaining @ the 1.9%. __________________
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06-03-2009, 05:33 PM	#2
new2the3 Colonel 382 Rep 2,067 Posts Drives: 2020 X3M Competition Join Date: Jun 2006 Location: San Diego iTrader: (0)	Option 1 baloon = $42,975 total Option 2 regular finance = ~710/month (you did not specify exactly) = $42,600. If that is the case, and you only save $375 by doing a traditional finance then I would go with option 1 and enjoy 3 years of lower payments. That is if you are going to pay the balloon amount off in cash. Otherwise if you were going to refinance the balloon amount at month 36, you would have been a bit better off just doing a regular finance from the beginning. __________________ 2020 X3MC 2009 135i: AW/CR Aluminum Trim, 6 speed, M-Sport, Premium, Heated Seats, Ipod, BMW Performance Pedals, BMW Performance SSK, BMW Performance Exhaust, BMW Performance Grills E93 M3 FSB
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06-03-2009, 08:39 PM	#3
RMA Major 38 Rep 1,015 Posts Drives: 2009 135i M sport coupe Join Date: Jul 2008 Location: Tampa, Fl iTrader: (6) Garage List 2009 135i M sport c ... [0.00]	That is what I was thinking as well...chances of paying or wanting to pay in cash 23k 3 years from now is not too appealing & if I finace part of that amount who knows where rates will be on a 3 year old car by then __________________
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06-03-2009, 09:01 PM	#4
AlBel1214 Major 52 Rep 1,118 Posts Drives: past 135i, now c6, future M3?? Join Date: Aug 2008 Location: Philly iTrader: (0)	Thumbs down to the balloon.. play it safe my friend or you will be kicking yourself when thata 23K payment comes rolling around! __________________ -----LS3 C6----- *z51 suspension,* *NPP dual mode exhaust(wild2mild),20% tint,* zr1 replica wheels, gloss black fender stripes** R.I.P SGM 135i w/ some mods
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06-03-2009, 09:28 PM	#5
adk749 First Lieutenant 27 Rep 347 Posts Drives: '09 135i Join Date: May 2008 Location: New Jersey iTrader: (0)	Option 1. It is not even a close call. Take the $7,000 you will save in monthly payments and combine it with the value of the car at the end of the 36 months to pay off your balloon. I assure you that you will not need to use all $7,000 and then get a NEW car in three years, doing it all over again. Do not be afraid of the balloon. __________________ 2009 135i Coupe, 6 Speed MT, Black Sapphire Metallic, Black Leatherette, High Gloss Black Trim, Sports Package, BMW Assist, iPod/USB Adapter, Heated Seats \| Ordered: 5/18/09 Completed: 6/2/09 Shipped: 6/11/09 Delivered: 7/2/09
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06-03-2009, 09:30 PM	#6
FORCED AIR Got Boost? 7 Rep 234 Posts Drives: 2010 135i, Msport Join Date: May 2009 Location: The Desert iTrader: (1)	So since you are considering a 60 month standard finance...I am curious why you aren't also looking at the 60 month balloon? Yes there would be the balloon payment at the end of 5 years but it would be smaller and by then you could either pay in cash or trade in to pay off the balance. __________________ - - My Car Domain - - 2010 BMW 135i AT, AW, ///M Sport JB4\|BMS DCI\|MS 3" cattless DPs\|Golf Tee\|33% Tint\|///M Pedals
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06-03-2009, 10:09 PM	#7
RMA Major 38 Rep 1,015 Posts Drives: 2009 135i M sport coupe Join Date: Jul 2008 Location: Tampa, Fl iTrader: (6) Garage List 2009 135i M sport c ... [0.00]	Thought about that one as well (4-5 year) but figured just keep it at 3 year being the residual id its best @ 36 months 56% (ballon residuals are different than lease residuals btw). __________________
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06-03-2009, 11:27 PM	#8
FORCED AIR Got Boost? 7 Rep 234 Posts Drives: 2010 135i, Msport Join Date: May 2009 Location: The Desert iTrader: (1)	true true....but if you are fine with keeping the car for 5 years anyway....doesn't BMW have a guarantee on the cars value that goes with the select program? Or maybe that is just in UK. __________________ - - My Car Domain - - 2010 BMW 135i AT, AW, ///M Sport JB4\|BMS DCI\|MS 3" cattless DPs\|Golf Tee\|33% Tint\|///M Pedals
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06-04-2009, 06:06 AM	#9
RMA Major 38 Rep 1,015 Posts Drives: 2009 135i M sport coupe Join Date: Jul 2008 Location: Tampa, Fl iTrader: (6) Garage List 2009 135i M sport c ... [0.00]	Yes the residual is non negoitable at the end of the term for a balloon (unlike a lease). My guess would be that the cars value would be closer to $20ish with 50-60k or 3 years. So in reality I would be somewhat upside down by then. If I did the standard financing after 3 years there would be approx. $17ish owed (& 2 more years left @ 1.9). So there is apparently a $6k spread there...would make sense being the $160 difference is around $6k for 3 years if you do the math. Decisions, decisions... __________________
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