refinancing issues with my M

[Sy546]

Hey guys i was having some issues with refinancing my 1M with a credit union. They wouldn't approve me for the more than the "value" of the car, which they state is only $54,000. But i paid almost $56,000 + fees + taxes rolled in. It came out to almost $61000. They will only give me $54,000. Is this right? If i used them to do the sale from the beginning they didn't have a problem rolling in taxes and the extra options. Idk I'm confused.

will Pen Fed go by the purchase price?

Ill just pay the $7,000 upfront if i really have to since the rate will drop by so much. But id prefer to just roll everything in.

[silvs]

This is not unusual. You are "underwater" so to speak, in that you owe more than it is worth. No one is going to refinance that, as the collateral is not worth what they are giving you.

[Sy546]

Originally Posted by silvs

This is not unusual. You are "underwater" so to speak, in that you owe more than it is worth. No one is going to refinance that, as the collateral is not worth what they are giving you.

isn't that a little weird since if i had purchased the car with a loan from my credit union they would have rolled in everything? Also for the same MY car they consider it a New car purchase.

[RPM90]

Originally Posted by S.hasan546

Hey guys i was having some issues with refinancing my 1M with a credit union. They wouldn't approve me for the more than the "value" of the car, which they state is only $54,000. But i paid almost $56,000 + fees + taxes rolled in. It came out to almost $61000. They will only give me $54,000. Is this right? If i used them to do the sale from the beginning they didn't have a problem rolling in taxes and the extra options. Idk I'm confused.

will Pen Fed go by the purchase price?

Ill just pay the $7,000 upfront if i really have to since the rate will drop by so much. But id prefer to just roll everything in.

Nothing strange here really. The bank is willing to loan based on what the collateral, the car in question, is worth.
The value will not include sales tax, tags, fees, etc...
Why would they? It's not part of the value of the car.

A refinance will take into account that the car is used, and they can and will reduce what they will loan on the car based on the depreciation.
I never roll taxes and fees into a loan or lease that has a rate of higher of 0%. Why would you pay interest on taxes and fees?
If you would have paid the taxes and fees up front, the even with the slight depreciation the value of the car and what the bank will loan would probably be much closer.
Pay the tax and fees up front in cash, and get a loan on the actual value of the car. In the end you will have paid less overall.
Done.

[Sy546]

Originally Posted by RPM90

Nothing strange here really. The bank is willing to loan based on what the collateral, the car in question, is worth.
The value will not include sales tax, tags, fees, etc...
Why would they? It's not part of the value of the car.

A refinance will take into account that the car is used, and they can and will reduce what they will loan on the car based on the depreciation.
I never roll taxes and fees into a loan or lease that has a rate of higher of 0%. Why would you pay interest on taxes and fees?
If you would have paid the taxes and fees up front, the even with the slight depreciation the value of the car and what the bank will loan would probably be much closer.
Pay the tax and fees up front in cash, and get a loan on the actual value of the car. In the end you will have paid less overall.
Done.

I did it that way b.c i make more on that cash in investments than i do with a 2% auto loan. But yeah it seems like thats what i will have to do. They wouldn't even give me purchase price.

[Sy546]

Is there anyway to refinance BMW Select with BMW financing? Because pretty much the dealer i bought my car from screwed me and told me if i wanted to buy the car from them id have to use bmw select with a crazy high interest rate. Even though i was approve for a 4.9% traditional finance with BMW already at a different dealer.

[SNOOPY11]

Originally Posted by S.hasan546

Is there anyway to refinance BMW Select with BMW financing? Because pretty much the dealer i bought my car from screwed me and told me if i wanted to buy the car from them id have to use bmw select with a crazy high interest rate. Even though i was approve for a 4.9% traditional finance with BMW already at a different dealer.

How the hell do these people get away with this?

[cooler2442]

Originally Posted by SNOOPY11

How the hell do these people get away with this?

It's called supply and demand. I'm sure he could have argued and etc but by that time the car would have been gone.

[Lester]

Rob a bank - use the 1M as the getaway vehicle.

[Sy546]

Originally Posted by SNOOPY11

How the hell do these people get away with this?

They also told me there was a 6 month pre payment penalty (lie) and that the 4.9% rate is only at participating dealers, even though i knew someone who got that rate from them. But if i had said no they would have sold the car to someone else. I paid only for the car + clear bra. 3 weeks ago. Most places are asking a standard $5000 above msrp.

Im just going to pay the taxes; etc up front and refi. Even Pen Fed can't beat my Credit Unions rates. 1.54% for 60 months. And i have a mortgage and business loan through them so id rather keep everything with one bank since they help me out a lot.

[TunedM2C]

They will only go up to 115% of the NADA value.

[nebby]

Leasing helps here because you pay for sales tax "as you go". So I did a minimal down lease and so my pay off is low $50s (MSRP was $54,xxx for the fully loaded VO)... I can buy it out and sell the car (without needing to recover paid sales tax) or I can refinance into a lower interest rate once I find it without running into the problem here of being under-water.

[carchrism5]

Originally Posted by nebby

Leasing helps here because you pay for sales tax "as you go". So I did a minimal down lease and so my pay off is low $50s (MSRP was $54,xxx for the fully loaded VO)... I can buy it out and sell the car (without needing to recover paid sales tax) or I can refinance into a lower interest rate once I find it without running into the problem here of being under-water.

Lease taxes vary from state to state. Some states pay tax on the selling price of the car whereas some states pay the tax only on the lease payments.

[Sy546]

Originally Posted by nebby

Leasing helps here because you pay for sales tax "as you go". So I did a minimal down lease and so my pay off is low $50s (MSRP was $54,xxx for the fully loaded VO)... I can buy it out and sell the car (without needing to recover paid sales tax) or I can refinance into a lower interest rate once I find it without running into the problem here of being under-water.

leasing also costs wayyyy more when you can purchase at 1.54% interest rate and if you are planning on keeping the car for longer than 3-4 years. And the 48% residual is pathetic on the 1M.

[1SerieStud]

Entirely normal. Once the car has been titled, even if it has 1 mile on the odometer, it depreciates and as considered "used." Some credit unions won't even refinance for MSRP even if the car is new, much less if you've already added taxes/tag/title to the final number.

[nebby]

Originally Posted by S.hasan546

leasing also costs wayyyy more when you can purchase at 1.54% interest rate and if you are planning on keeping the car for longer than 3-4 years. And the 48% residual is pathetic on the 1M.

Agreed, but the chances of me keeping the car beyond 3 years or even long enough for the interest to matter are 50/50 at best. Yes the money factor on the lease isn't stellar compared to a credit union interest rate, but I didn't have to pay 8.25% up front for sales tax.

Do the math on buy out (assuming you may sell the car after a year) on a lease with a higher money factor for 12 months versus purchasing and paying sales tax with your 1.5% and it's really not that different.

Or better yet, let's use the OP's scenario versus mine as a real world example... my buy out is $53K and his is $61K... nuff said.

[Dee Pee]

4.9% interest? Yeah, BMW Financial tried that crap on me so I went to a credit union and got it at 2.49% which is less than the rate of inflation. I tossed enough at them in a down payment to avoid the gap insurance.

I think you can get a better rate and I also think you should toss a few grand at them just to shut'em up, if you can afford to.

[Sy546]

Originally Posted by nebby

Agreed, but the chances of me keeping the car beyond 3 years or even long enough for the interest to matter are 50/50 at best. Yes the money factor on the lease isn't stellar compared to a credit union interest rate, but I didn't have to pay 8.25% up front for sales tax.

Do the math on buy out (assuming you may sell the car after a year) on a lease with a higher money factor for 12 months versus purchasing and paying sales tax with your 1.5% and it's really not that different.

Or better yet, let's use the OP's scenario versus mine as a real world example... my buy out is $53K and his is $61K... nuff said.

My scenario and urs are the same. If you bought your car from your lease right now, since you rolled in taxes into your lease and are paying the taxes monthly, it comes out to the same. If you wanted to refinance the car right now and buy it out you would have to pay sales tax on the full buy out price. You don't just get it tax free.

Also your comparing two totally different MSRPs + markups + payments lardy made; etc. I haven't made 1 payment yet. The car is 3 weeks old. I also paid for the clear bra and other things as well. So my car was more expensive than your car from the get go.

Also your assuming this car isn't going to hold its value. IMHO it will holds its value very very well. So if in 3 years i do want to sell it i can for a better price than the 48% residual that they would be giving you. Whats your monthly payment? I bet its within $100 of what I'm paying monthly. @ 48% it makes no sense to lease this car. Besides the horrible money factor + residual that bmw gives you you don't have the same freedom i do of selling the car. Yes you can do swap a lease but i don't see too many people interested in leasing this car. Most want to purchase.

[Sy546]

Originally Posted by Dee Pee

4.9% interest? Yeah, BMW Financial tried that crap on me so I went to a credit union and got it at 2.49% which is less than the rate of inflation. I tossed enough at them in a down payment to avoid the gap insurance.

I think you can get a better rate and I also think you should toss a few grand at them just to shut'em up, if you can afford to.

I decided I'm just going to pay the taxes up front and than refi at 1.54% with my credit union. My Credit Union also includes the GAP insurance for me. I don't like putting anything down just b.c i make more on my $$ than the 1.54% it costs to borrow someone else's $$.

But i might not have the car too long. I just got an offer today for the car. At a INSANE price. I wasn't even trying to sell. But the offer is so good idk what to do.

[nebby]

Originally Posted by S.hasan546

My scenario and urs are the same. If you bought your car from your lease right now, since you rolled in taxes into your lease and are paying the taxes monthly, it comes out to the same. If you wanted to refinance the car right now and buy it out you would have to pay sales tax on the full buy out price. You don't just get it tax free.

Well, if I sell the car, which I likely will before the three years are up, then yes, I did get it tax free, kind of. In a scenario where you are selling the car, the lease + buyout is better because you pay sales tax on the buy out only if you register the car. When I sell the car, I will pay off the buy out price, get the pink slip and hand it over to the buyer, so the only sales tax I paid is the amount that was added to each lease payment.

Originally Posted by S.hasan546

Also your comparing two totally different MSRPs + markups + payments already made; etc. I haven't made 1 payment yet. The car is 3 weeks old. I also paid for the clear bra and other things as well. So my car was more expensive than your car from the get go.

Not true, I haven't made a single lease payment either. My lease was a fully loaded car at $54,xxx less $1000 discount from the Olympic Drive event and $900 cap reduction. My payoff is $53K. Your car was only more expensive if you paid a mark-up and then the sales tax you already paid.

Originally Posted by S.hasan546

Also your assuming this car isn't going to hold its value. IMHO it will holds its value very very well. So if in 3 years i do want to sell it i can for a better price than the 48% residual that they would be giving you. Whats your monthly payment? I bet its within $100 of what I'm paying monthly. @ 48% it makes no sense to lease this car. Besides the horrible money factor + residual that bmw gives you you don't have the same freedom i do of selling the car. Yes you can do swap a lease but i don't see too many people interested in leasing this car. Most want to purchase.

Huh? I absolutely plan on the car holding its value AND I have ultimate flexibility... just find a buyer, pay off the car based on whatever the current buy out is and the leftover money goes in my pocket. And I don't need to recover the sales tax you already paid when figuring out if I made a profit from selling or not.

So if I wanted to sell the car today for $58K based on market conditions (only has 800 miles on it)... I would agree with the buyer at $58K and then pay off the car by wiring BMW the $53K. The pink slip arrives and I sign it over to the buyer and take his money... and put $5000 in my pocket...simple. The buyer pays sales tax upon re-registering the car under his name.

Let's hear how you can sell the car for $58K today if you wanted to since you have "more freedom" in selling your car?

[Dee Pee]

Originally Posted by S.hasan546

I decided I'm just going to pay the taxes up front and than refi at 1.54% with my credit union. My Credit Union also includes the GAP insurance for me. I don't like putting anything down just b.c i make more on my $$ than the 1.54% it costs to borrow someone else's $$.

But i might not have the car too long. I just got an offer today for the car. At a INSANE price. I wasn't even trying to sell. But the offer is so good idk what to do.

I'd drive it for a couple months. If you think that the offers are insane now, just wait until the last ones are delivered and people really start getting desperate.

[nebby]

Originally Posted by S.hasan546

I just got an offer today for the car. At a INSANE price. I wasn't even trying to sell. But the offer is so good idk what to do.

Originally Posted by Dee Pee

I'd drive it for a couple months. If you think that the offers are insane now, just wait until the last ones are delivered and people really start getting desperate.

Agree with Dee Pee!

But then again, if they're offering over the $61K you owe... that's not shabby at all!