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      03-04-2008, 12:18 PM   #1
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1% interest rate drop...

Just recieved an email from my local bmw dealership dropping their 3 series (both coupe, sedan, 328 and 335) to 3.9%. Would have saved me 1000... oh well. If anyone wants me to pass the coupon onto them send me a pm. It is for BMW Northwest in Fife, WA.
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      03-04-2008, 12:32 PM   #2
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My dealer told me that since they technically delivered the car in february, that I could not take advantage of the 1% drop. I did my paperwork in March, so I told the that it they would have to figure something out. I left at 3.9%, so I was happy....
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      03-04-2008, 12:47 PM   #3
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just got word from my dealer that since i have not signed any paperwork yet, and my car is still on it's way, i would get the 3.9% since i'm locked in through BMWFS which means that i would get the lower rate
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      03-04-2008, 02:34 PM   #4
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Same Here.

3.9% from my dealer. I haven't read the fine print, can someone let me know if this rate is good for 60 month financing or is it just a teaser for 36 months and then its staggered 4.9% for 48 months, etc.?
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      03-04-2008, 02:39 PM   #5
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I would love to be have a refinance option...I'm at 6.5% right now.
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      03-04-2008, 02:41 PM   #6
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I would love to be have a refinance option...I'm at 6.5% right now.
Ditto on that, but 6.5% was really good at the time (July 07).
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      03-04-2008, 02:46 PM   #7
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Just recieved an email from my local bmw dealership dropping their 3 series (both coupe, sedan, 328 and 335) to 3.9%. Would have saved me 1000... oh well. If anyone wants me to pass the coupon onto them send me a pm. It is for BMW Northwest in Fife, WA.
Am I missing something? I leased, but the finance rate on my 328xi was 3.9 in February.
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      03-04-2008, 02:48 PM   #8
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Am I missing something? I leased, but the finance rate on my 328xi was 3.9 in February.
previously the 335 was a 4.9 rate, so it really only effects that
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      03-04-2008, 02:50 PM   #9
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I would love to be have a refinance option...I'm at 6.5% right now.


i wonder how much you could trade yours in for? depending on how much you have to pay off, a 2.5% decrease could save you ~4000?

trade in your 335 and get a '08!
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      03-04-2008, 02:55 PM   #10
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my ca just told me that the 3.9 was on 60 month as well for the 335 in march.

good news!
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      03-04-2008, 02:57 PM   #11
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i wonder how much you could trade yours in for? depending on how much you have to pay off, a 2.5% decrease could save you ~4000?

trade in your 335 and get a '08!
Ha ha...I've actually looked at a few options on the finance page at BMWNA, but the problem is (not really a problem I guess) I'm getting a e90 m3 soon. I'm #1 on the allocation list at fife. I should actually be ordering here in the next few weeks. I'll have to wait a bit though, since I want 19" wheels and the M-dct options...which are pushing things back a bit.

I'm thinking after this weekend I might re-think the whole thing however.
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      03-04-2008, 03:49 PM   #12
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I would love to be have a refinance option...I'm at 6.5% right now.
Why can't you refinance? I am waiting on the Fed to drop interest rates another 0.75% (or so the rumor goes) on 3/18, and then refinance my loan. Any bank will want your business, even if it is just for 3-4% interest.
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      03-04-2008, 04:16 PM   #13
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Why can't you refinance? I am waiting on the Fed to drop interest rates another 0.75% (or so the rumor goes) on 3/18, and then refinance my loan. Any bank will want your business, even if it is just for 3-4% interest.
Well I suppose I could, I just meant with the 3.9% that BMWNA is now offering. I actually just called one of my banks to get a % rate quote, and they wanted to rape me. If I just looked around I'm sure I could get something better...my credit is excellent. It's just a matter of taking the time to look into it.
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      03-04-2008, 08:34 PM   #14
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3.9% is nice. I'm at 5.5% which was good in 12/06. But in general, it's a shame that BMW's cannot sell without an incentive. We all lose due to poor resale (they can't even move a brand-new car, who would even want used except those who cannot pony up--and at 3.9%!). Ah, but then the solution is to never sell! 3.9% rocks!
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      03-04-2008, 08:37 PM   #15
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Why can't you refinance? I am waiting on the Fed to drop interest rates another 0.75% (or so the rumor goes) on 3/18, and then refinance my loan. Any bank will want your business, even if it is just for 3-4% interest.
If the prime follows suit, my HELOC would be at 4.5% (plan on keeping it at a zero balance, no thanks to borrowing more), it feels like 2002 all over again, only a massive loss of equity and very little buying power even with a six-figure salary...
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      03-04-2008, 11:08 PM   #16
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Why can't you refinance? I am waiting on the Fed to drop interest rates another 0.75% (or so the rumor goes) on 3/18, and then refinance my loan. Any bank will want your business, even if it is just for 3-4% interest.
Unfortunately, it's not so simple. Most banks (at least in the NY area) would not make a new car loan at 3%. If you're interested, it's useful to understand why so that you can gauge what you think is a good rate on any type of loan.

Brace yourself for a quick econ lesson, or change the channel now, before it's too late:

Different financial institutions serve different purposes, have different goals, and back thier loans in different ways. In the end, it all comes down to the investor(s) that drive(s) the company.

BMW Financial's purpose is to make car loans and leases on BMW's for the dealer network. BMW the manufacturer guides them and so they both can accomplish this, So, for example, if you can suddenly buy a new 335i at 3.9%, it's only because the manufacturer has decided to offer it as an incentive. On the whole, the two companies together make a profit because a car was sold, and less from the loan itself. In essence, BMW Financial exists to sell cars, not underwrite loans.

Your common commercial bank, savings thrift, and credit union has a very purpose and needs to worry about cost of funds, and what's called spread. To over simplify, say that Main Street Bank offers savings accounts that pay 2%APY. John Doe deposits $20,000 into his account. Jack Daniel then comes to the bank because he wants his new 335i and needs a $20,000 loan. Ignoring an unimaginable number of factors and regulations that would actually complicate this, Main Street Bank loans Mr. Daniel the same $20,000.00 at a rate of 3%APR. The cost of the money the bank is loaning is 2% and the income they're earning on it is 3%, leaving the spread at 1%. (3% Earned - 2% Cost to pay depositor = 1% Profit on spread)

Now, like I said, there's literally volumes of other factors at work here and not all banks earn thier primary income off of spread. However, the important part to understand is that for a bank to write a loan, the interest they earn has to be more profitable than or at least as profitable as what they could do with the money otherwise. At 3%, taking into account all the costs of administering the loan and operating the place, the bank would probably be losing money. To boot, they probably could have bought a short term bond or other securtiy that would pay the same or more, would be less likely to not make a payment, or go bankrupt. (Unless they buy something speculative and risky, but again, that's another story)

I'm not saying it can't happen, and it certainly can't hurt to look around, but I've never seen a bank in this area offer car loans that low. The bottom line is that BMW can offer you 3% because they're also selling you a car. Banks, well, can't.

We do have lovely free keychains and lollipops though. I mean, c'mon, 6.5% is definately worth all the lollipops you can eat for 5 years! Think about the cost of the candy, here.

Always shop around though. It's good to know what's out there. Just because the first 7 banks you call are offering say 6%-7% on a 30 mortgage, doesn't mean there isn't another one that's running a promotion at 5.5%. Also, if you own a home and are confident in your job security, always compare any financing against Home Equity Loan rates. Often these types of loans offer little to no closing costs, and some banks are even writing lines of credit with fixed rates. I had one gentleman come into my branch once and take out a $20,000 5 year fixed home equity to buy a car because the rate was actually 1.125% lower and the dealer wanted to charge over $300 in closing and doc fees, vs. our $40 fee to file the loan with the county.

I apologize for the rant. I'm a banker, and I love this crud, and yes, that makes me a huge geek, I know. If anyone ever needs basic info though, I'd be glad to share everything I know. (Or if you're in North Jersey and need a loan, by all means let me see if I can help you)

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      03-05-2008, 01:02 AM   #17
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Also, if you own a home and are confident in your job security, always compare any financing against Home Equity Loan rates. Often these types of loans offer little to no closing costs, and some banks are even writing lines of credit with fixed rates. I had one gentleman come into my branch once and take out a $20,000 5 year fixed home equity to buy a car because the rate was actually 1.125% lower and the dealer wanted to charge over $300 in closing and doc fees, vs. our $40 fee to file the loan with the county.
Although it's very tempting with the current overnight lending rates, and the Fed poised to possibly lower them again at their next meeting; generally speaking, borrowing against equity in your house to pay off a car loan is a bad idea. If times get rough (and they are about to get very rough) you can do without a 50k Bimmer. You can't do without shelter however and foreclosure is a terrible thing to go though

I've had friends go through it because they over-extended themselves with HEL(OC)'s and credit lines. A couple even used HELOC's to finance their cars and guess what? They lost their cars AND their houses. The extra couple hundred bucks tacked onto a mortgage can sometimes mean the difference between scraping by and giving the property back to the bank.
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      03-05-2008, 05:12 AM   #18
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(Or if you're in North Jersey and need a loan, by all means let me see if I can help you)
-The Colonel
I get the feeling that so many people simply see a monthly payment going down as meaning win-win all around. They don't seem to realize BMW's are not selling as well as they should, even though they are highly desirable cars. BMW has to sell cars, even to a general public who has less buying power. It's like a prescription drug that costs $565/mo., $35 co-pay, but the co-pay waived due to the drug co. subsidizing their name brand drug which has no generic. There's a cost to that free drug (to the end user) and a reason why the mfg. subsidized it.

Yeah, I'll be contacting you in a year or two to borrow the money I need to pay my 21k property tax bill. By then they'll probably be giving 3 Series away at 0% financing and the resale will be next to nothing!
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      03-05-2008, 07:08 AM   #19
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Although it's very tempting with the current overnight lending rates, and the Fed poised to possibly lower them again at their next meeting; generally speaking, borrowing against equity in your house to pay off a car loan is a bad idea. If times get rough (and they are about to get very rough) you can do without a 50k Bimmer. You can't do without shelter however and foreclosure is a terrible thing to go though

I've had friends go through it because they over-extended themselves with HEL(OC)'s and credit lines. A couple even used HELOC's to finance their cars and guess what? They lost their cars AND their houses. The extra couple hundred bucks tacked onto a mortgage can sometimes mean the difference between scraping by and giving the property back to the bank.
Agreed. I wouldn't recommend an variable rate HELOC for a car purchase and, again, you have to be comfortable that you're going to be able to repay the loan and will continue to have income. I also wouldn't recommend financing $50k on a car, either.
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      03-05-2008, 07:17 AM   #20
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Yeah, I'll be contacting you in a year or two to borrow the money I need to pay my 21k property tax bill. By then they'll probably be giving 3 Series away at 0% financing and the resale will be next to nothing!
Tell me about. You pretty much rent your home from the state up here... and we're about to be reassesed.
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      03-05-2008, 08:50 AM   #21
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Doh about 15 days to late and 1000 dollars short now, I got the 4.9 they had last month.
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      03-05-2008, 12:20 PM   #22
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Doh about 15 days to late and 1000 dollars short now, I got the 4.9 they had last month.
Set it, and forget it...you'll go crazy thinking about it too much. I'm at 5.5% which was good back then. What bothers me is incentives ruin the resale value, and BMW was supposed to have excellent resale. Wouldn't surprise me if the 335 is flirting with $1/mile in operating costs now....I'd want a Porsche for those numbers.
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