# ED with Bank Financing



## Wine-O (Feb 17, 2010)

I did ED followed by PCD. I just called my insurance agent (USAA), told them the date I wanted my insurance to begin (re-delivery at PCD), gave them the VIN, they gave me a quote, and it was done all in less than 1/2 hour. I certainly wouldn't trust my CA.


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## shark715 (Nov 20, 2011)

I appreciate the responses, and I think I get the picture. My credit union is very small, and I would not be shocked if they have no experience with ED. But I'm willing to put up with some minor headaches because they offer a 1.99% rate on 60 month loans. After reading all the posts, I'm less concerned about any delay with getting them the title as the dealer will already have cashed their check (BTW, on an ED delivery is the check made out to the dealer, or is it made out to BMWUSA?) The credit union may not like the situation, but no doubt they will just wait for the title. Once they understand what's going on, I really doubt they would waste their time and money starting a legal action against the dealer and/or myself.

As for the insurance, I do understand that I don't need it until I take delivery at the dealer. But the credit union is going to want to know that the loan collateral is protected, and presumably they have no relationship with BMWUSA. If I recall correctly, with past loans the credit union would not issue the check until I showed them proof that I had added the new vehicle to my insurance policy (even though my policy does state that newly acquired vehicles are automatically insured; if I recall correctly I have to notify the insurance company within a certain number of days after the purchase). So I guess the worst case is that I might have to pay $150 or so to start the insurance about 2 months earlier than I really need it to start.

As for the timing of the first payment, if the credit union won't change this for an ED purchase, I'm OK with making the first payment on the car even though it may currently be in transit.

Obviously what I should do is contact the credit union this week, and find out what their policies are regarding ED purchases, if they have any policies at all. At least then I will know what issues there will be, if any.

Thanks again.


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## Ninong (May 20, 2014)

shark715 said:


> As for the insurance, I do understand that I don't need it until I take delivery at the dealer.


Correct.



> If I recall correctly, with past loans the credit union would not issue the check until I showed them proof that I had added the new vehicle to my insurance policy (even though my policy does state that newly acquired vehicles are automatically insured; if I recall correctly I have to notify the insurance company within a certain number of days after the purchase).


That's correct, with emphasis on the word "acquired." In this instance, you don't "acquire" the car until it is back here in the states. Your insurance company isn't licensed to cover cars in Europe or on the ship coming over here from Europe. Only after the car hits the US. You and your car are fully covered by the insurance provided through BMW while you're over there.



> So I guess the worst case is that I might have to pay $150 or so to start the insurance about 2 months earlier than I really need it to start.


Actually no. You do not have to start insurance two months early because there would be no insurance in the first place. Your policy doesn't cover the car until it gets here, therefore they can't add the car to your policy, legally, until it's here. I'm assuming they know the car is still in Europe. In order to add it you would have to lie and tell them you already have the car at your house. So the credit union has to be educated to this fact in case they don't already know that. Chances are that they do understand. Just talk to them and explain the situation in case they're confused.



> Obviously what I should do is contact the credit union this week, and find out what their policies are regarding ED purchases, if they have any policies at all. At least then I will know what issues there will be, if any.


They probably already know but just in case they don't, you just have to explain it to them or let the dealership explain it to them.


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## Ninong (May 20, 2014)

shark715 said:


> ... if I recall correctly I have to notify the insurance company within a certain number of days after the purchase).


Each state regulates the insurance policies written in their state. Most states allow a maximum of 30 days following the delivery. However, that's not what your obligation is to your credit union or BMWFS. Your obligation is to notify your insurance company immediately, or as soon as possible following the delivery. That has nothing to do with what state law may allow.

If you know you're going to pick up a new car the next day, you should always call your agent and give him that information ahead of time and tell him the date you're taking delivery. In any case, notify your agent, or the insurance company, as soon as you can following the acquisition of a new car. Don't drag it out for a week or two just because state law says that's allowed. That's okay if you paid for the car in cash but not if you leased it or financed it. Your obligation to the lender is to get this done as soon as you possibly can.

I only point this out, not for you specifically, but because some members of the board think it's okay to wait a couple of weeks before calling their insurance agent to add the new car just because state regulations allow that. Some lenders allow a maximum of 10 days for getting this done but your real obligation is "as soon as possible, if not sooner."


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## JSpira (Oct 21, 2002)

There's a lot of misinformation in this thread so let me straighten out a few things.

1.) You need to make sure your credit union is ok with NOT getting the title for what will likely be 8-12 weeks (you need to factor in 
a.) payment perhaps one week or so in advance of delivery
b.) the length of your trip
c.) your drop-off date
d.) then 4-8 weeks for redelivery following drop-off

This could - if something goes wrong like an agriculture inspection at the port or damage that delays redelivery - mean the credit union waits as much as 12 weeks for the title.

If the credit union is not ok with this, you will need to make other arrangements (which could be financing with BMW FS and then refinancing with the credit union down the road).

2.) The credit union will not be ok with chasing you for the title. 

3.) Many people have refinanced after financing with BMW FS - it's not uncommon

4.) Many people here report good results with PenFed

Alles klar?


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## shark715 (Nov 20, 2011)

Thanks again. 

If I read Pen Fed's site correctly, unfortunately I'm eligible to join.

I emailed my credit union a few minutes ago with detailed questions on the titling and insurance issues. Hopefully they are familiar with the ED program and can help me. If not, unfortunately their rates on refinancing are higher than their new car purchase rates.

I will post again when I hear back from them.


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## shark715 (Nov 20, 2011)

JSpira said:


> The credit union will not be ok with chasing you for the title.


I'm thinking that if the credit union is narrow minded on this, that I just apply for the loan (I'll have the VIN by then) and not mention anything about ED. When the title is delayed, they may not be happy, but at that point realistically what is the credit union going to do about it once they understand the situation.

And for the insurance, there's nothing to prevent me from adding the car to my policy (and not mentioning ED) right before the loan is funded so I can show the credit union proof of insurance. Granted I would not be able to collect on the policy if something happens to the car before I take dealer delivery, but that doesn't matter since both myself and the credit union would be protected by BMW's policy.

Granted this would be somewhat devious. but the only downside I see is the cost of the needless insurance until I take dealer delivery.


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## Gary J (Dec 18, 2013)

Wine-O said:


> I certainly wouldn't trust my CA.


That's unfortunate. I would find one i could. There are plenty.


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## JSpira (Oct 21, 2002)

shark715 said:


> I'm thinking that if the credit union is narrow minded on this, that I just apply for the loan (I'll have the VIN by then) and not mention anything about ED. When the title is delayed, they may not be happy, but at that point realistically what is the credit union going to do about it once they understand the situation.


Since it would be fraudulent on your part to do so, the credit union could demand full repayment at once should you fail to deliver the title in a timely manner. It might also have an impact on your credit rating if this happens (I'm guessing on this part, however).


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## Me530 (Feb 17, 2005)

I'm not sure I understand the title part, maybe it's particular to my dealer, but I walked out of my last two ED lease signing sessions with title applied for and license plates in hand / transferred. Maybe I should have made them wait till the car was redelivered to do that? 

PS- It's good to see you online Jonathan!


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## JSpira (Oct 21, 2002)

Me530 said:


> I'm not sure I understand the title part, maybe it's particular to my dealer, but I walked out of my last two ED lease signing sessions with title applied for and license plates in hand / transferred. Maybe I should have made them wait till the car was redelivered to do that?


If you transferred the plates because you took redelivery, how did you drive in the interim?

Also, unless something has changed, the procedure for titling a European Delivery car required the Manufacturer's Certificate of Origin. The MSO is generated by BMW NA when the car arrives (again unless something has changed recently).



Me530 said:


> PS- It's good to see you online Jonathan!


Thanks - I am however always online and here quite a bit, just jumping in where help is needed the most generally.


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## Me530 (Feb 17, 2005)

JSpira said:


> If you transferred the plates before you took redelivery, how did you drive in the interim?


We took the risk since the cars were nearly the same and the state has notoriously slow to update systems....


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## shark715 (Nov 20, 2011)

JSpira said:


> Since it would be fraudulent on your part to do so, the credit union could demand full repayment at once should you fail to deliver the title in a timely manner. It might also have an impact on your credit rating if this happens (I'm guessing on this part, however).


I definitely don't agree that my failing to disclose to the credit union that this would be a ED transaction would be fraudulent (unless they specifically asked me to state that it's not an ED transaction, and I lied to them about it).

I suppose they could demand full repayment upon the delay in receiving the title, but why would they, assuming they then understood the situation, and that the title would be arriving in a few weeks and that I was making the monthly payments on timely basis? Why would they bother? Assuming that I refused their demand and ask them to wait, and if they decided to take legal action despite that, they would have the title by the time any legal action commenced anyway, and the basis for the legal action would be moot.

And I don't see how my credit rating or score could possibly be impacted if I made all the payments on time.

Perhaps it's a bit devious, but I would not be injuring the credit union economically in any manner.

I spoke with 4 different people at the credit union today, and each of them said they have never heard of European Delivery by any vehicle manufacturer. It could be that I just have not tracked down the right person yet. Each of them told me that I don't need to provide proof of insurance to obtain the financing check from the credit union...all I need to do is supply my automobile policy number.


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## woron (Dec 13, 2011)

I would recommend using BMWFS for your original loan (they offering 1.9% APR for 60 months for M235i). They will certainly know about ED and how to handle title and insurance issues.

If after receiving your car you can find a better rate, than just refinance it. It will cost $10-$20 if you refinance with CU. Most of them use new car rates for refinancing a current model year car.


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## Ninong (May 20, 2014)

shark715 said:


> I emailed my credit union a few minutes ago with detailed questions on the titling and insurance issues.
> 
> I will post again when I hear back from them.


Your credit union is probably familiar with European Delivery programs. In all my years in the business I can't remember ever coming across a credit union that wasn't aware of ED issues. The problems arose only because the borrower failed to tell the credit union that he was taking delivery in Europe and that therefore there would be a delay in the issuance of a title.

If your credit union is not familiar with this situation, just have them call the dealership and ask for the person in the office who handles registration of new cars. That person can explain everything to them and send them a guarantee of title form if needed. Most credit union checks have a guarantee of title clause printed on the back of the check just above where the dealership's endorsement will go. In essence it guarantees that by cashing the check the dealer guarantees the credit union that they will be named as lienholder on the title.

There should be no problems at all and absolutely no need for you to do anything so unnecessary as trying to add the car to your insurance policy before it has even been legally imported into the US. Good luck and I'm confident everything will be just fine and there will be no issues with the credit union.


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## Ninong (May 20, 2014)

Okay, I just read your response reporting that the people at the credit union are not familiar with European Delivery. Ask the credit union manager to call the dealership and ask for either the office manager or the person who handles new car registrations and ask them about European Delivery and when they can expect to receive the title.

I wouldn't give up on using the credit union if that's what you prefer. It's all just a matter of explaining things to them. Your first payment is still going to come due 30-45 days after you sign the finance contract with them, so that won't change. The only issue, as far as they are concerned, is being aware that they won't receive the title until a couple of months after you take delivery in Munich because it will take time for the car to actually arrive back here in the US.


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## shark715 (Nov 20, 2011)

woron said:


> I would recommend using BMWFS for your original loan (they offering 1.9% APR for 60 months for M235i). They will certainly know about ED and how to handle title and insurance issues.
> 
> If after receiving your car you can find a better rate, than just refinance it. It will cost $10-$20 if you refinance with CU. Most of them use new car rates for refinancing a current model year car.


Thanks, but doesn't the 1.9% expire tomorrow? I can't order the car yet as the dealers don't yet have pricing info on the M235 convertibles with Xdrive as production is not going to start on that model until July. I'm assuming BMW will publish a new pricing guide sometime in April, at which point I should be able to place my order.


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## Ninong (May 20, 2014)

shark715 said:


> I definitely don't agree that my failing to disclose to the credit union that this would be a ED transaction would be fraudulent...


Hmmm... Well... It would be a serious oversight on your part to fail to tell the credit union that this car is in Germany and it has not yet been imported into the United States. Therefore, it is not yet legal to operate on any public road in the United States. All technical, I know, but actually the truth.

I think this is all to do about almost nothing. The worst thing you could do is fail to disclose to the credit union that you are taking delivery in Munich and that the car won't arrive here until a month, or more, after you turn it over for shipping. Therefore, there will be a delay in the issuance of the title.

Good luck and I'm confident everything will be fine in the end.


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## woron (Dec 13, 2011)

shark715 said:


> Thanks, but doesn't the 1.9% expire tomorrow?


You can lock your rate 60 days before delivery, so the current BMW offer is no good for you.

If you can't workout ED financing with your credit union, still consider going with BMWFS and refinance later. I used manufacturer's financing for my last two cars in order to get rebates, and then refinanced with my CU a month or two later for a nominal fee. You will pay extra interest just for a few months.


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## SD ///M4 (Jan 24, 2011)

Our credit union would not finance my wife's car for our May 2011 Euro Delivery because they said that they needed to have the car insured before they would release financing. Our insurance company said that they wouldn't insure the car until it was in the US. We explained the Euro Delivery process to our loan officer at the credit union and she said that we could re-finance the car as a new car at new car rates as long as it was still the current model year. Our insurance company said to let them know when the car arrived at the dealer.

Bottom line, we went with BMW FS and informed our insurance company when the car was re-delivered at the dealership after the Euro Delivery.


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## BillKach (Sep 22, 2003)

*Thank goodness for JSpira*

Thank goodness for JSpira pointing out the extensive disinformation in this thread. There are a lot of responses being presented as fact that seem to be based on limited experience.
In your contract with your lender, you will almost certainly agree to give them a lien on your car and meet their minimum insurance requirements.
It is your decision whether you want to enter into a contract and then immediately violate it but on my 4 EDs, I've decided not to.

Also, keep in mind that license, title and insurance procedures vary by state and making blanket statements based on one lender or transaction isn't helpful to the community.
If you use a lender that isn't willing to temporarily waive their rights, you can end up in default on your loan and/or the lender may purchase insurance on your behalf and add it to your loan balance.

Playing games with a lender is way too much risk to save $200 in interest. I always finance with BMWFS and refinance when the car is in the US.
Different lenders have different policies and sensitivities but they are completely within their rights to ask for proof of registration, the title with a lien on it and proof of insurance. Some lenders will work with you on this stuff but it's not safe/wise to count on it.


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## Beach759 (Jun 7, 2014)

shark715 said:


> Thanks again.
> 
> If I read Pen Fed's site correctly, unfortunately I'm eligible to join.
> 
> ...


Anyone can become eligible by making a tiny ($14 or $15) to one of two organizations that support military families. On the eligibility page, check "Other" in the drop-down and you will be taken to the page for making this small donation. This is what I did; I have no other military connection.

PenFed is well-versed in ED. You should still call them to tell them that you are doing ED, and as a result, you may not be able to provide title and insurance info right away.

At some point down the line, you may still receive an automatically-generated letter from Penfed saying that you have been "bad" and haven't provided this documentation yet. If so, no big deal, just give them another call.

All in all, it was very easy.


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## shark715 (Nov 20, 2011)

Beach759 said:


> Anyone can become eligible by making a tiny ($14 or $15) to one of two organizations that support military families. On the eligibility page, check "Other" in the drop-down and you will be taken to the page for making this small donation. This is what I did; I have no other military connection.


 Thanks, appreciate the info.


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## gregsX5 (Sep 3, 2012)

I just read through this thread can someone knowledgable set this straight for me:

1) I ordered and financed a car through BMWFS in January
2) Did the Euro Delivery tour in March
3) Will pick up PCD in May

My dealership insisted on adding the car to my insurance policy in January. They said it's a BMWFS requirement. We did that.
Now my insurance company just realized (in April) that the car will not be registered in the US before May and removed it from the policy retroactively. They will only start coverage once the dealer registers it.
So right now there is a bit of standoff between the dealership and the insurance agency, and I don't know who is right?

Is there someone here from BMW or someone deeply familiar with BMWFS policies?


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## Wine-O (Feb 17, 2010)

Your car is fully covered up to the day you pick it up at the Performance Center. Coverage should begin then. All BMWFS needs is confirmation of your current insurance policy. They should know that. They can confirm with your insurance agent that you do and will have coverage when you pick up.


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## Lionnutz (Jul 24, 2014)

Ur insurance is right. Many inexperienced dealers think the car has to be insured once u have paid for it but that is not true. Ur insurance would not have covered any losses until u pick it up at PCD so no point in the policy. There's the ED insurance and shipping insurance that would have. 

Ur insurance is good for picking that up. It saves u 4 months of unnecessary premiums.


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## gregsX5 (Sep 3, 2012)

Thanks guys that's very helpful!


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## Ninong (May 20, 2014)

gregsX5 said:


> I just read through this thread can someone knowledgable set this straight for me:
> 
> 1) I ordered and financed a car through BMWFS in January
> 2) Did the Euro Delivery tour in March
> ...


The dealership is wrong.



> Now my insurance company just realized (in April) that the car will not be registered in the US before May and removed it from the policy retroactively. They will only start coverage once the dealer registers it.


The insurance company is correct.



> So right now there is a bit of standoff between the dealership and the insurance agency, and I don't know who is right?
> 
> Is there someone here from BMW or someone deeply familiar with BMWFS policies?


Whoever is telling you that at the dealership is totally uninformed and obviously not a licensed insurance agent. Is it your client adviser who is telling you that? If so, he's not well trained. If it's anyone in F&I or anyone in management, then I'm surprised and disappointed.

Your car is fully covered in Europe by the insurance provided through BMW AG. It's fully covered in transit to the US through the shipping company. It's fully covered at the VPC through BMWNA. It's fully covered in transit to the dealership by the trucking company's insurance company. It's fully covered at the dealership before you take delivery by their insurance.

Your insurance cannot cover the car before it is registered to you in the US. It won't be registered to you in the US until you are ready to pick it up. There is no coverage by your insurance before that even if your policy was improperly dated weeks or months before. It wouldn't pay off because the policy was null and void.

So your insurance agent is correct and he's having the premium refunded to you as required. The insurance company can't charge you for coverage that didn't exist.


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## obmd1 (Jan 17, 2005)

Me530 said:


> I've never had a finance that let me drive for 60 days without paying. I guess this is something new.


BMW financial holds the first payment for 60 days with ED. And my rate is 1.5%. Hard to beat, and easy peasy. I was told most outside lenders are unfamililar with the process, and didn't want to get hassled.


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## Ninong (May 20, 2014)

obmd1 said:


> BMW financial holds the first payment for 60 days with ED. And my rate is 1.5%. Hard to beat, and easy peasy. I was told most outside lenders are unfamililar with the process, and didn't want to get hassled.


Many banks and all but the largest credit unions are nervous about the idea of financing a car that won't even be in the country for a couple of months or more after they actually pay for it. Some of them don't understand why the insurance can't start the date their customer signs their finance contract.

On a finance contract for European Delivery, BMWFS allows the dealership to make the first payment due in up to 60 days instead of the usual 30-45 days. As with any finance contract, the finance charges accrue from the date of the contract. It's just a convenience for the customer to give him time to get back home before the first payment comes due.


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