Advice with Select Finance

[M370z]

Hey guys,

Looking for some advice here on a select finance for a 2016 M3. I currently have a negotiated price of $700 above invoice, which I think is pretty good. However, with the crappy lease rates, I'm really leaning towards doing a 60 month select finance as the numbers just seem to make more sense. I have top tier credit, so the payment is about $100 less per month with nothing out of pocket.

That being said, we likely will only put about 5-6k miles per year max on the car and it will also be garage kept. Taking that in to account, do you think I will be even-up after three years or so on a Select finance? With only 15k miles give or take at that point, I assume that I would be (or very close to it), but I'm just curious what you guys think.

Thank you

[mdefalco25]

I apologize for not having an answer for your question, and don't mean to hijack this thread, but wanted to ask if you could share how you identified invoice prices for the M3? I have used Edmunds to get invoice pricing, but was curious if there was a better location to identify pricing so I can determine how good the estimates I'm receiving are. Thanks!

[hadeed]

Originally Posted by mdefalco25

I apologize for not having an answer for your question, and don't mean to hijack this thread, but wanted to ask if you could share how you identified invoice prices for the M3? I have used Edmunds to get invoice pricing, but was curious if there was a better location to identify pricing so I can determine how good the estimates I'm receiving are. Thanks!

There are pdf posted in one of these pricing threads.. But invoice is 93% of MSRP.

[hadeed]

I'm doing select as well, as it makes more sense for me. Unless the lease rates get back up to 66% residuals in April when I take delivery, I will stick with select.

[blinkme323]

I'm in somewhat of a similar boat, but yes, if you stick to about 5000 miles per year and keep the car in good condition, then it's not unreasonable at all to be at break-even after three years.

[Rain49king]

Last month I traded in my my 2015 M4 for a 2016 M3, the M4 was purchased under the select program. I chose to go select again on the M3, the main reason sales tax credit. If you have a trade of significant value ($62,000 in my case) you need to consider this. If you lease you only get the equity not the tax credit. My deal for example $60,000 payoff $62,000 trade value. If I leased only the $2000 equity went towards the lease making the payments on the car I bought $869 with tax and $0 down. With the select purchase the same $2000 equity went towards the purchase as well as $3720.00 in tax credit (I paid less than $700 in tax just the difference in the price of the new one and my trade). This made my Payment come in at $780 ish on the select purchase and when I decide to trade I will once again receive my tax credit. Before you dismiss this by saying if you lease you only pay tax on the payment so it doesn't matter remember this the $3720.00 is tax I already paid on the trade, so if you lease there is no way of ever getting that back also when you buy your next ride NO TAX CREDIT from lease car.

One other factor for those that do not know the formula, .00131 money factor equates to 3.14% in interest which is a full point higher than what select program offers. Only down side to select is you do pay interest on the full note including the balloon payment! To me select makes for a good decision if you can pay the balloon out of pocket at the end or plan on trading in a 2-3 year span.

[M370z]

Originally Posted by Rain49king

Last month I traded in my my 2015 M4 for a 2016 M3, the M4 was purchased under the select program. I chose to go select again on the M3, the main reason sales tax credit. If you have a trade of significant value ($62,000 in my case) you need to consider this. If you lease you only get the equity not the tax credit. My deal for example $60,000 payoff $62,000 trade value. If I leased only the $2000 equity went towards the lease making the payments on the car I bought $869 with tax and $0 down. With the select purchase the same $2000 equity went towards the purchase as well as $3720.00 in tax credit (I paid less than $700 in tax just the difference in the price of the new one and my trade). This made my Payment come in at $780 ish on the select purchase and when I decide to trade I will once again receive my tax credit. Before you dismiss this by saying if you lease you only pay tax on the payment so it doesn't matter remember this the $3720.00 is tax I already paid on the trade, so if you lease there is no way of ever getting that back also when you buy your next ride NO TAX CREDIT from lease car.

One other factor for those that do not know the formula, .00131 money factor equates to 3.14% in interest which is a full point higher than what select program offers. Only down side to select is you do pay interest on the full note including the balloon payment! To me select makes for a good decision if you can pay the balloon out of pocket at the end or plan on trading in a 2-3 year span.

That's great insight thank you. I do plan on trading in about 3 years and I'm hoping that the super low mileage will offset the premature trade.

[trey100]

Originally Posted by Rain49king

Last month I traded in my my 2015 M4 for a 2016 M3, the M4 was purchased under the select program. I chose to go select again on the M3, the main reason sales tax credit. If you have a trade of significant value ($62,000 in my case) you need to consider this. If you lease you only get the equity not the tax credit. My deal for example $60,000 payoff $62,000 trade value. If I leased only the $2000 equity went towards the lease making the payments on the car I bought $869 with tax and $0 down. With the select purchase the same $2000 equity went towards the purchase as well as $3720.00 in tax credit (I paid less than $700 in tax just the difference in the price of the new one and my trade). This made my Payment come in at $780 ish on the select purchase and when I decide to trade I will once again receive my tax credit. Before you dismiss this by saying if you lease you only pay tax on the payment so it doesn't matter remember this the $3720.00 is tax I already paid on the trade, so if you lease there is no way of ever getting that back also when you buy your next ride NO TAX CREDIT from lease car.

One other factor for those that do not know the formula, .00131 money factor equates to 3.14% in interest which is a full point higher than what select program offers. Only down side to select is you do pay interest on the full note including the balloon payment! To me select makes for a good decision if you can pay the balloon out of pocket at the end or plan on trading in a 2-3 year span.

Good stuff. What is the residual on this program and over how many months? Is the monthly payment calculated the same as the lease calculator?

[CRtoE92]

Originally Posted by trey100

Good stuff. What is the residual on this program and over how many months? Is the monthly payment calculated the same as the lease calculator?

39%/60mo

[STOOF]

I need to explore this option. Got a sales price of 500 under invoice. 800+ credit score.

Coming from a lease so i dont have a trade.

[MrSmileyDC]

Penfed Payment saver is basically the same thing, but probably has better rates. A three year old M4 with low miles and a few options will easily sell in the high 40's private party. I followed the 2011's for awhile a few years back and that's how they were. If we end up getting a little inflation then they might be near 50k.

[M370z]

Originally Posted by CRtoE92

39%/60mo

Yep...and depending on credit, I believe this can go up to 42%. As for the rate, I was quoted at 2.79%.

[CRtoE92]

Originally Posted by M370z

Yep...and depending on credit, I believe this can go up to 42%. As for the rate, I was quoted at 2.79%.

39% is for top tier credit The residual does not VARY depends upon your credit score, only the interest rate

[blinkme323]

Originally Posted by CRtoE92

39% is for top tier credit The residual does not VARY depends upon your credit score, only the interest rate

Yep, this is correct.