BMW i3 Owners Choice and Owners Choice With Flex Explained By BMW Finance General Manager

MAR 14 2014 BY ERIC LOVEDAY 11

Finalized BMW i3 Finance Details

Finalized BMW i3 Finance Details

With the US launch of the BMW i3 comes several lease/purchase options, including one (Owners Choice with Flex) that’s entirely new to BMW.

As the graphic above shows, BMW has released its finalized lease/purchase options for the BMW i3, though both Owners Choice and Owners Choice with Flex are so confusing that we figure we not let an expert chime in to try to clear up some of the details.

First, let us point out that BMW has modified is i3 rates, residuals and balloons since we first broke news of the “preliminary” figures.  There are some changes, so look over both the finalized figures (above) and preliminary figures (below) before proceeding.

Here's a Look at the Previously Released i3 Preliminary Finance/Lease Document

Here’s a Look at the Previously Released i3 Preliminary Finance/Lease Document

Mike van Bemmel, general manager of sales analytics for BMW’s captive finance company, tires to explain the i3’s confusing Owners Choice with Flex to Automotive News, which the news outlets paraphrased as follows:

“Under the new feature, called OwnersChoice with Flex, BMW Group Financial Services will advance BMW i3 customers up to $7,500 in anticipation of the tax credit.”

“The amount — which the customer has to repay at the end of the plan’s term, which is typically 36 months — is applied to the balloon note, which serves to reduce the customer’s monthly payment.”

“In a balloon note, the balloon note amount is analogous to the residual value in that a higher balloon note means a lower monthly payment.”

Okay, but BMW’s balloon note works differently, says van Bemmel.

“There are balloon products on the market that do not provide a walk-away option. In other words, the customer has to pay off the balloon or refinance the balloon.  OwnersChoice and OwnersChoice with Flex are different than these products as both products provide the customer with a walk-away option.”

Confused yet?  As van Bemmel points out, Owners Choice allows the i3 buyer to simply return the car at the end of the term and walk away:

“In other words, returning the vehicle to us at the end of term satisfies the balloon they owe us.”

But Owners Choice with Flex is different.  As Automotive News states:

“Unique to the BMW i3 will be OwnersChoice with Flex, the “flex” part being the customer’s ability to add another $7,500 to the balloon note. Over a typical 36-month term, a $7,500 reduction works out to reducing the payment by $208 per month. That helps make balloon note payments competitive with a lease payment.”

“Customers who opt for OwnersChoice with Flex must repay the flex amount at the end of term, whether they purchase the car and keep it or turn the car in.”

Now you’re surely confused, right?

Here’s our advice: Avoid these two overly complicated options and instead either straight up buy the BMW i3 or pay $700-plus per month to go with the traditional lease deal.  Just buy it.  That’s the most logical and financially sound option here.

Source: Automotive News

Categories: BMW

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11 Comments on "BMW i3 Owners Choice and Owners Choice With Flex Explained By BMW Finance General Manager"

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FYI, Owners Choice with Flex is not legal in a few states – NH, IL, PA and NC.

The kicker here is still the residuals as compared to the “giveaway” lease deals other manufacturers are offering on their EVs. I mean, heck my Volt’s lease residual was over 62% – crazy for them, but great for me!

I am non-the-wiser

I know I sometimes catch grief for my personal stance of “always buy if you can” …but I can’t imagine taking much heat for this decision when it comes to the BMW i3.

Can anyone calculate a basic 36 mo 15k a year lease on a base I3 and a Base REx I3 ?
with 2,000 down to compare things to other cars

we need BMW to advertise and actual payment on their site for a conventional 36 mo lease

+1 that’s really what matters most….

Lease = $670/month (w/ $7500 = $456/month)
Rx Lease = $738/month (w/ $7500 = 524/month)

But that’s compared to financed at 60 months top tier = $706/month (Rx = $776)

Does not count state tax, DMV fees, state incentives or negotiated prices but that’s a good first base comparison.

What I don’t understand is that the federal $7500 should be going to whoever’s name is on the title. For a lease, the Manufacturer gets the credit, not the consumer. Unless I’m missing something, Dun-Dun-Dun.

456 for i3 and 524 for Rex version are about what the market will bear

If that pans out it could work for many
The who’le flex pay balloon tax 7500 deal requires a well heeled and financially sophisticated buyer to appreciate and maneuver thru
Car buying is complicated enough on an ice lease, add in an EV with evse installation issues, and some fancy financing option with balloons and you might as well be trying to land on the moon again
Good luck bmw

The question for me will be “Is this car worth 50% more than my Volt?” since that’s what the payments are. And that’s using my 2012 Volt’s pricing…a new one is even cheaper. Heck, in a couple of ways it is WORSE than my Volt. My test drive is still a month away…tick tock.

What a shell game. Many more choices available now.

IMO, if you will lease an i3, OC is better simply because of the Federal (and state credits/rebates). Why? Because YOU are the owner of the vehicle. This enables you to receive the credit instead of your lease company.
Of course, this is a value if you are actually entitled to a credit (consult your tax pro). If you are, you will receive the credit and you will only be taxed once when you initially buy should you decide to pay off the balloon later. Furthermore, the OC w/flex, let’s you effectively take your federal credit up front in whatever amount is best for you rather than wait until the following tax year when you can file your return. This reduces your monthly but increases your residual (balloon). Then when you actually receive your refund, you can pay down the balloon at that time.
I hope that made sense. Again consult your tax professional for your own situation.