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
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