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      06-14-2018, 10:38 AM   #1
DriftlessBimmer
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BMW Financing - Prepayment Penalties

With my car soon arriving off the boat, I am trying to get my ducks in a row to figure out which financing option I am going to go with. When I ordered the car, they had a pretty aggressive rebate if the buyer elected to use BMW Financing.

While the BMW financing rates are higher than the local credit unions by a fairly wide margin, I am wondering if anyone is familiar with the typical pre-payment language in the BMW Financing loan documents?

Two of the local credit unions will give you new car financing rates up to 12 months after purchase.

I appreciate the responses.
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      06-14-2018, 02:03 PM   #2
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I've financed a few through BMWFS and paid them off early with no penalties.
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      06-14-2018, 02:12 PM   #3
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You'll really have to ask your finance manager.

However I see you're in Wisconsin and I BELIEVE we have a law where a financial company cannot fine you for paying off a loan early. However, they can if the loan has a backing security (if I'm remembering correctly).

Also I'm locked in for 1.9% financing through BMW which is much better than I expected as they aren't even advertising rates that low.
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      06-14-2018, 02:59 PM   #4
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No prepayment penalties through BMWFS. I made payments through the website a month before my first payment was even due!
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      06-14-2018, 03:52 PM   #5
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Great forums with how responsive and helpful everyone is. Thanks much!

Out of curiosity Tyresian, when did you lock in that rate? I saw the 1.9% financing a couple weeks back but it appears that deal may be gone now.
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      06-14-2018, 04:18 PM   #6
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Quote:
Originally Posted by DriftlessBimmer View Post
Great forums with how responsive and helpful everyone is. Thanks much!

Out of curiosity Tyresian, when did you lock in that rate? I saw the 1.9% financing a couple weeks back but it appears that deal may be gone now.
I locked it in April 16th. I'm curious if I should be concerned about losing the rate, my car is coming in a couple days but I was not told how long this lock lasts and my sales person has not mentioned anything about it.
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      06-14-2018, 04:35 PM   #7
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It's likely locked in already. My rebate is currently locked in all the way back from March 1st.
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      06-15-2018, 06:31 AM   #8
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Once you signed the papers, the responsibility for delivering a car in a reasonable time was in their hands. It's hard to see how they could renege on the deal based on the fact that they might have taken more time than expected to fulfill their side of the bargain.
The real problem is that, being from Wisconsin, you are too nice. You need a New York lawyer. I can recommend Michael Cohen or maybe Rudy Guiliani, both real tough guys who are looking for more work.
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      06-15-2018, 06:36 AM   #9
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Quote:
Originally Posted by DriftlessBimmer View Post
I am wondering if anyone is familiar with the typical pre-payment language in the BMW Financing loan documents?
I'm not, as my local dealer was unable to locate a car for me, and so I never saw the docs. However, I was told that I would have to make only the first six payments before being able to pay the loan off.
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      06-15-2018, 07:25 AM   #10
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Quote:
Originally Posted by morphomeman View Post
Once you signed the papers, the responsibility for delivering a car in a reasonable time was in their hands. It's hard to see how they could renege on the deal based on the fact that they might have taken more time than expected to fulfill their side of the bargain.
The real problem is that, being from Wisconsin, you are too nice. You need a New York lawyer. I can recommend Michael Cohen or maybe Rudy Guiliani, both real tough guys who are looking for more work.
There is truth right here!

That said when they locked in BMW seems to be actually "locked in" when I spoke with other dealerships for ordering different brands (Especially Alfa Romeo) they told me they couldn't lock in an interest rate, it would basically be whatever the current rate was when the car arrived which would have been a screw over with the ever rising rates.
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      06-15-2018, 11:36 AM   #11
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I have inquired about this before through BMW Canada. You can prepay the loan I believe up to a year (I don't know if that has changed as I asked about this 2 years ago). If you prepay they will just put the account on hold for the time being and resume with no penalties.

I am not familiar with US interest rates but when I financed my current car BMW Financial Service had a way better interest rate compared to bank. I was offered 0.90% and on top of that I got a reduction of 0.75% (because preferred customer) so my interest rate right now sits at 0.15%
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