# Is there a prepayment penalty if financed?



## CapeBimmer (Mar 16, 2002)

I am negotiating the purchase of an '16 X5. My CA told me if I finance through BMW I will get $500 off of my first two payments; I can then payoff the loan, after the first two payments with no prepayment penalty and no fees. Are there upfront fees?

Is this correct? 

We are $1000 away from making a deal and he is telling me to finance as described above. I was going to do a cash deal.

Thanks for your help . . .


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## bimmer_newbie13 (Dec 27, 2013)

Yes, there is no prepayment penalty. I have paid off the loan earlier without any extra fees.



CapeBimmer said:


> I am negotiating the purchase of an '16 X5. My CA told me if I finance through BMW I will get $500 off of my first two payments; I can then payoff the loan, after the first two payments with no prepayment penalty and no fees. Are there upfront fees?
> 
> Is this correct?
> 
> ...


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## kmersh (Oct 13, 2015)

One of the nurses was able to got a lower price for her 320i if she financed rather than pay in cash, a month later she paid off the car and there was no fees nor penalties for paying off early.


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## M2Pilot (Jun 1, 2007)

Paid off my M3 yesterday after 1 regular payment. No penalties.


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## Kar Don (Aug 4, 2004)

dealer can get charged back if loan is paid off too early. I think it is 60-90 days...


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## ard (Jul 1, 2009)

it depends on the loan they give you.

I guess everyone assumes it will be a BMWFS loan


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## Kar Don (Aug 4, 2004)

ard said:


> it depends on the loan they give you.
> 
> I guess everyone assumes it will be a BMWFS loan


Very true!


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## Ninong (May 20, 2014)

CapeBimmer said:


> I am negotiating the purchase of an '16 X5. My CA told me if I finance through BMW I will get $500 off of my first two payments; I can then payoff the loan, after the first two payments with no prepayment penalty and no fees. Are there upfront fees?
> 
> Is this correct?


BMW Financial Services recently announced a new incentive that they will pay up to $500 of your first and second lease payments ($750 for 6-series). Obviously that would require you to actually have a second payment to get the credit against that payment. Your CA is *probably* correct that you can pay it off after that without you being charged back any part of that incentive. It might be best to wait until your third payment is made and then pay it off a week after that but that's just my way of saying to play it safe.

How long the account has to remain open before the dealer gets hit with any sort of chargeback has varied in the past. However, the only thing you need to verify is how long your account has to remain open for you to get the full benefit and it seems obvious to me that you will have to wait beyond the second payment. Maybe just a week after that or maybe a month. It doesn't make much difference to you. The only finance charge will be based on that accrued during the time the loan was open but rates are so absurdly low that it will still be a big benefit to you to go ahead and accept this incentive offer from BMWFS. They're hoping most people will just leave the account open, but they can't force you to do that.





> We are $1000 away from making a deal and he is telling me to finance as described above. I was going to do a cash deal.
> 
> Thanks for your help . . .


Yes, he's correct, you should do this deal to take advantage of this particular incentive. Instead of just giving you a $1,000 credit against the selling price they have now tied it to financing with them. Clever of them.


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## LycanNyc (Apr 11, 2012)

This only happens if you finance through BMWFS correct?


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## veery (Feb 25, 2015)

I financed (BMWFS) part of my CPO 2011 328xi and was told I had to make 5 payments before I could pay down the balance. At 1.9%, though, I see little point in doing so.


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## Ninong (May 20, 2014)

LycanNyc said:


> This only happens if you finance through BMWFS correct?


Whenever they announce an offer to pay x-dollars of your first two lease payments, it means you have to actually have lease payments with BMWFS in order for them to do that. 

Another Bimmerfest member posted a link to an ad being run by a BMW dealer to that effect and if you read the fine print disclosure you will fine all of the rules. It's on here somewhere.

They have made this type of offer off and on for quite a few years now, so it's nothing new.


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## tturedraider (Nov 11, 2005)

veery said:


> I financed (BMWFS) part of my CPO 2011 328xi and was told I had to make 5 payments before I could pay down the balance. At 1.9%, though, I see little point in doing so.


Lately the generally accepted time frame is four payments made to keep the incentive from being charged back to the dealer. However, there's no requirement to wait placed on the customer. It's just considered a courtesy to your dealer, so he doesn't get stuck with the chargeback.


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## LycanNyc (Apr 11, 2012)

Ninong said:


> Whenever they announce an offer to pay x-dollars of your first two lease payments, it means you have to actually have lease payments with BMWFS in order for them to do that.
> 
> Another Bimmerfest member posted a link to an ad being run by a BMW dealer to that effect and if you read the fine print disclosure you will fine all of the rules. It's on here somewhere.
> 
> They have made this type of offer off and on for quite a few years now, so it's nothing new.


I was told by a dealer that since I'm not currently financing thru BMWFS that I am not qualified for the BMW Loyalty (First 2 payment) offer. Although I am planning to Finance through them on this car.
2 dealers confirmed that BMW just changed the loyalty program =\


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## Ninong (May 20, 2014)

LycanNyc said:


> I was told by a dealer that since I'm not currently financing thru BMWFS that I am not qualified for the BMW Loyalty (First 2 payment) offer. Although I am planning to Finance through them on this car.
> 2 dealers confirmed that BMW just changed the loyalty program =\


Okay, if it's an *owner loyalty* change, then it simply means that instead of the previous $1,000 credit they're offering $500 off the first two payments.

Whatever the deal is, it's on here somewhere if you follow that previous guy's link to the ad. I'm sure the dealers know who is qualified for it.


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## zz6938 (Aug 2, 2010)

CapeBimmer said:


> I am negotiating the purchase of an '16 X5. My CA told me if I finance through BMW I will get $500 off of my first two payments; I can then payoff the loan, after the first two payments with no prepayment penalty and no fees. Are there upfront fees?
> 
> Is this correct?
> 
> ...


no penalty.


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