# pay off BMW Financial Services loan



## agentsmith (Jan 26, 2010)

Is it possible to use the incentives (holiday cash, etc.) and get the loan from BMW financial services, and pay it off or refinance with someone else right away? I'm curious if there's a penalty or time limit.

I'm looking at $3250 of incentives - $925 acquisition fee for $2325 savings.


----------



## cchrisv (Aug 14, 2012)

If you play to pay it off right away get a loan with BMW and not a lease. There is no acquisition fees on financing.


----------



## agentsmith (Jan 26, 2010)

cchrisv said:


> If you play to pay it off right away get a loan with BMW and not a lease. There is no acquisition fees on financing.


Thanks, that's good to know. Are they going to let me pay it off right away after giving me the incentives though? I assume they would want to make some from the interest.

Also, is there a minimum loan limit from BMW financial to qualify for the incentives; .e.g. if I make a big down payment, will I still be eligible for the holiday cash, etc.?


----------



## cchrisv (Aug 14, 2012)

Min amount is $7500. You will be hit with a penalty if you pay it off before 6 months.


----------



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

There is absolutely no prepayment penalty on a BMW FS *loan*. You can pay it off the next day if you want. However, the dealer may be penalized if the loan is paid off within either 3 months or 6 months.

Search is your friend. There are plenty of posts in the last two years that talk about this.


----------



## Campfamily (Sep 20, 2010)

When I bought my car, I did exactly what you are doing to take advantage of the incentives. I financed $10,000, paid it off in three installments, and closed the loan. No pre-payment penalties, and according to my Sales Advisor, he got his credit for the loan as well. However, I wasn't refinancing the car with a different lender, I simply didn't want a loan for the car, and had the cash on hand to pay it off.

Keith


----------



## agentsmith (Jan 26, 2010)

Thanks everyone.

Keith, that's exactly what I'm going to do. Thanks.


----------



## zerovector (Jul 20, 2012)

SD Z4MR said:


> There is absolutely no prepayment penalty on a BMW FS *loan*. You can pay it off the next day if you want. However, the dealer may be penalized if the loan is paid off within either 3 months or 6 months.
> 
> Search is your friend. There are plenty of posts in the last two years that talk about this.


Jon Shafer disagrees in this post. http://www.bimmerfest.com/forums/showpost.php?p=7210243&postcount=3

Was there a change recently?


----------



## ard (Jul 1, 2009)

zerovector said:


> Jon Shafer disagrees in this post. http://www.bimmerfest.com/forums/showpost.php?p=7210243&postcount=3
> 
> Was there a change recently?


Nobody has ever posted the language in which BMW discloses there IS a penalty if you pay off a loan that had an incentive. Would be very helpful for someone to provide the proof.

Yes I know Jon said it. but there are 50 states, and many have pre-payment penalty rules...
'
Anyone with an agreement care to blank it out and scan it?????


----------



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

When we bought our car last year this is what we were told. We purchased for ED in May and there were no rebates or incentives involved. I'm pretty sure that we checked our loan docs and I'm pretty sure that it must have said this because I don't remember that there was a discrepancy because it was something that we were seriously considering. Bottom line, our CU rate was within 0.01% so we just kept the BMW FS loan. I'll check tomorrow.

Sounds like the real answer is...it depends.


----------



## gpburdell (Sep 23, 2012)

ard said:


> Anyone with an agreement care to blank it out and scan it?????


I'll try to remember to pull mine out of my files and look through it over the weekend. I financed through BMWFS in September.

I don't recall seeing any prepayment clause when I read through it before signing (I have no problem taking all the time I need), but will look again to verify.


----------



## ard (Jul 1, 2009)

Thanks! To be clear, we are discussing only a 'pre payment penalty' on the incentive component... Not on the whole loan. So it may be in a separate disclosure. Ie. if you are getting the incentive it my be a separate page from the BMWFS note document....

Thx!


----------



## Ace535i (Jan 28, 2012)

Campfamily said:


> When I bought my car, I did exactly what you are doing to take advantage of the incentives. I financed $10,000, paid it off in three installments, and closed the loan. No pre-payment penalties, and according to my Sales Advisor, he got his credit for the loan as well. However, I wasn't refinancing the car with a different lender, I simply didn't want a loan for the car, and had the cash on hand to pay it off.
> 
> Keith


What credit does a sales advisor get from the loan?


----------



## SARAFIL (Feb 19, 2003)

Ace535i said:


> What credit does a sales advisor get from the loan?


Dealers get a reserve payment from the bank for placing a loan. It could be a flat fee, or if they mark up the interest rate, a percent of the markup. Salesman doesn't usually get paid on any of this, it goes to the finance manager and dealer management.


----------



## Ace535i (Jan 28, 2012)

BMW finance rate is 3.29% which is redicilously high. Is BMWFS giving at least 2% back to the dealership?


----------



## Jon Shafer (Dec 15, 2001)

zerovector said:


> Jon Shafer disagrees in this post. http://www.bimmerfest.com/forums/showpost.php?p=7210243&postcount=3
> 
> Was there a change recently?


Please note that my post was made in the context of early payoff as it pertains to REBATES specifically. In general, BMWFS uses a simple interest contract (i.e., not prepayment penalty). If you are financing just to claim INCENTIVES you must keep the loan active for 5 months before paying it off or face chargebacks.


----------



## ard (Jul 1, 2009)

Jon Shafer said:


> If you are financing just to claim INCENTIVES you must keep the loan active for 5 months before paying it off or face chargebacks.


Still love to see that actual disclosure!:angel:


----------



## Jon Shafer (Dec 15, 2001)

ard said:


> Still love to see that actual disclosure!:angel:


Everything is "E-contracted" nowadays. I am relying on what our Director of Finance tells me.


----------



## ard (Jul 1, 2009)

Jon Shafer said:


> Everything is "E-contracted" nowadays. I am relying on what our Director of Finance tells me.


Oh, so you actually dont have confirmation????l

Everybody walks out with documents, e-contracted or not. A buyer will get a disclosure describing the penalty - if there isnt anything in the disclosure, there is no penalty.

As my grandma used to say "get it in writing"


----------

