Financing through BMW FS

[apun426]

Hey guys, piggybacking off a recent thread. Excellent credit and about to pick up our 2017 X5.

Dealer initially quoted a interest rate of 3.9%, with 5K down but said final rate to be determined at time of pickup since this quote was at time of ordering vehicle.

My question: has anyone had success negotiating the rate with the finance people at the dealership? Or is their first offer typically their 'final' offer?

Thx!

[Neuera09]

With an excellent credit rating, I personally wouldn't go with BMWFS unless they are offering 0 down and 0 interest. I bought my truck 15 months ago and I went through my credit union and received a 0.9% rate. At the time the dealer tried to match my rate but could not. Check around if you have time. Credit unions offers the best rate. Good luck.

[apun426]

I was thinking about getting a few rates before heading into the dealership. The only wrinkle in all of this is that when I negotiated my purchase of the vehicle the sale price was contingent on some of the balance being financed through BMW financial services, which does handicap my negotiating capabilities, but I'd even be happy with a 2.9 or less rate (rather than the 3.9% originally quoted)

[Neuera09]

Why not secure the funds through another bank with the lower interest rate and hand the dealership a money order for the full amount. I doubt they'll say "this is not we agreed upon!" Lol.

[MRCUR]

Originally Posted by Neuera09

Why not secure the funds through another bank with the lower interest rate and hand the dealership a money order for the full amount. I doubt they'll say "this is not we agreed upon!" Lol.

It sounds like they're marking up the BMWFS rates, hence the requirement to use BMWFS.

[Neuera09]

Definitely! at least by 1% if not more. OP is not going to know unless he shops around.

[F15GorDe]

Originally Posted by Neuera09

With an excellent credit rating, I personally wouldn't go with BMWFS unless they are offering 0 down and 0 interest. I bought my truck 15 months ago and I went through my credit union and received a 0.9% rate. At the time the dealer tried to match my rate but could not. Check around if you have time. Credit unions offers the best rate. Good luck.

This^^^^^^^^!

[Neuera09]

FYI - Federal Credit Union Rates ..

Auto Loans Terms

New Auto
48 months 1.74%
60 months 1.99%
72 months 2.50%
84 months 3.25%

Used Auto
48 months 1.99%
60 months 2.24%
72 months 2.75%

Motorcylces, RV & Other Vehicles
48 months 3.64%
60 months 3.89%

[dtronics]

You can do much better than a 3.9 with a decent credit score. I purchased a new M4 through a local delaer and I told them that I would do my own financing unless they could beat a 2%. The BMWFS rates were 3%+ at the time but they got me a 1.49% (TD Bank) with no hassle.

I've also done my own financing by going to a local Credit Union. I just checked the rates online at a few local CU's and got 1.79% on 60 months for my wife's last SUV.

Much like the mortgage business, the dealers make more money if they can sell you on a higher rate. 3.9% isn't a good rate, especially with excellent credit. Depending on the term, you should be in the 2% range.

[apun426]

Thank you all for the help. I hope that by agreeing to partially finance through BMW FS, I didn't lose all my leverage. However, that being said, I never signed any paperwork that would bind me to that especially if they are trying to swindle me. My feeling about this is that the dealer will not let me leave the building without the sale, so hopefully they will work with me. I guess I can as a last resort always tell them that if they cannot improve their rate, I will likely need to transfer the loan to a bank that actually provides a reasonable rate as soon as I leave the dealership.

[zinengineer]

Originally Posted by apun426

Thank you all for the help. I hope that by agreeing to partially finance through BMW FS, I didn't lose all my leverage. However, that being said, I never signed any paperwork that would bind me to that especially if they are trying to swindle me. My feeling about this is that the dealer will not let me leave the building without the sale, so hopefully they will work with me. I guess I can as a last resort always tell them that if they cannot improve their rate, I will likely need to transfer the loan to a bank that actually provides a reasonable rate as soon as I leave the dealership.

Just know that if you refinance following the initial sale, a bank or credit union will finance it as a "used car". Generally speaking the rates on a used car are not as good as new

[Grizzles]

Just purchased an x5 2016 used 11k miles at 0.9 for 72 months.

[Flying Ace]

Originally Posted by Grizzles

Just purchased an x5 2016 used 11k miles at 0.9 for 72 months.

...You know would be useful? A bit more Information...

[Grizzles]

Like what?

[double_j]

Just like sales price, the interest rate is always negotiable. The dealer will generally mark up the rates from their partner banks to see if they can get you to bite on the little bit extra they've added on. That all goes into their pocket.

It's tough to say if the dealer will negotiate on the rate in this case without knowing what they've conceded on the actual sales price. There's a chance (albeit a pretty small one) that the salesman is actually telling the truth and that they've cut you an extra sweet deal on the sales price in order to 'keep you whole' despite the higher interest.

3.9% is pretty huge vs. the going rates right now assuming you have excellent credit. Two points extra interest is worth around a couple of thousand bucks over the life of the loan.

Best way to do it is to generally negotiate price and interest independently. Know what rate you should qualify for and demand it since the dealer doesn't dictate what you should be able to get from the banks. Take interest out of the equation all together - either they give you the rate you want or you'll go elsewhere for the financing.

Note that even if you get a rate that the dealer's partner banks can't match, the dealer still has the capability to buy down the rate if they so desire. The argument that they can't give you a lower rate than what their partner banks offer is generally bogus - it generally either means that they think you'll flinch and take the higher rate for convenience, or that you've negotiated a good enough deal that there's not a whole lot of money left in it for them.

[apun426]

I actually called another local dealer that quoted me 1.9% through BMW financial services.

with excellent credit and two prior vehicles that were financed or leased through BMW financial services, I do not think I should settle for anything less than at least 1.9% through the financial services especially if that's being offered at a dealership about 15 miles away from this one.

I got the vehicle for about 13% off msrp, which based on the forums here, is definitely a great deal but by no means the deal of a century which would justify such a high markup of the interest rate.

[Neuera09]

Typical dealership financing! They give you some discount up front only to get it back from the back (on the loan). See if the other dealer with a lower interest rate would give you the same deal!

Ya might want to double check but I think getting 13% offf of the msrp with 3.9% interest would cost you more than an 11% off with 1.9% deal. Make your excellent credit work to your advantage. Good luck and don't forget to post pictures of your new ride!

[dtronics]

Originally Posted by Neuera09

Typical dealership financing! They give you some discount up front only to get it back from the back (on the loan). See if the other dealer with a lower interest rate would give you the same deal!

Ya might want to double check but I think getting 13% offf of the msrp with 3.9% interest would cost you more than an 11% off with 1.9% deal. Make your excellent credit work to your advantage. Good luck and don't forget to post pictures of your new ride!

Agreed. You should have a number, % off MSRP and rate, and tell the dealers exactly what you need to move forward. They will try to maximize their profit at every turn so tell them exactly where you want to be.

[Mexecutioner]

BMW FS could not even come close to what others offered when I got my X5. I got a much better deal with BofA, which was perfect as I bank with them. The dealership did all the legwork to set this up.

[superdog]

I feel like a dope reading this.

I traded in a car that I owned outright and they gave me a decent number for it.

I then planned to finance the rest, which was circa 30k. They gave me a rate of 5.9.

I was in a rush and I wanted to run in and about. The paperwork was waiting for me. I complained about the high rate and they "agreed" that it was basically stupid.

I did not realize that I could negotiate this number. I knew I could go to my bank, but I did not want to deal with the hassle, and again, I was in a rush.

After a few days, I was still relatively annoyed so I just paid off the balance. I would have preferred to simply had a loan with a fair rate.

After reading this thread, I am even more annoyed (mostly at myself). I am in love with my car. Not so much with BMW finance or my dealership. Looks like I shall not be buying another car from them anytime soon.

[Neuera09]

@superdog. Its fair to say that we all have been in your situation at one point or another. We live and learn right? You were fortunate enough that you were able to pay off the balance and not have to deal with BMWFS.

This is exactly why this is a great forum; we get to share the do's and don'ts of owning/leasing a car; from building it, financing it, and most importantly modding it.

Car salesman/dealers and mortgage loan agents are hated because of how they structure their "deals". Of course there are honest ones out there but I'm sure the percentage is not high. Unethical behavior is encouraged in commission based jobs (esp the ones above). The more unprepared a consumer is the more these guys make money.

[alejo_mauer]

I got 2.9% financing through BMWFS for 72 months. Apparently this was the going rate back in Feb, I was fortunate enough that I asked to lock the rate. When I went back to pickup the car the finance guy said the lowest he could go was 3.9. I kept pushing him until he "found" the paperwork saying the rate had been locked for 60 days.