[Beowulf65]

We are waiting for our 2016 replacement (Halifax Ice Storm recall) 435xi GC and delivery is not likely until late December/early January. Our 2015 finance rate was 1.9%. We were originally offered a 2.9% finance rate and that was the rate offered by BMWFS in September. The rate dropped to 1.9% in November. Both these rates were the rates currently offered on BMW Canada and confirmed by CarCost Canada.

I requested that the dealer confirm that we would be able to get the 1.9% rate and this is what I received:

"The interest rate fluctuation will not affect you whether it goes up or down because BMW is providing you with the a payment comparable to your previous contract. BMW is subsidizing the interest rate in both cases. The 2.9% quote is a combination of rate subsidy and discount. The 1.9% rate is the same as your previous contract so BMW is essentially reallocating the discount funds required at 2.9% to the rate subsidy (which was the case on the 2015 model)."

I can see no "rate subsidy" that we are receiving relative to any other buyer as the standard rate offered was 2.9% and is now 1.9% As well, how is there any "discount" in the rate, when it is the same rate offered to all buyers?

Thoughts on what is going on here and how to deal with this will be appreciated!

[tex2670]

Originally Posted by Beowulf65

We are waiting for our 2016 replacement (Halifax Ice Storm recall) 435xi GC and delivery is not likely until late December/early January. Our 2015 finance rate was 1.9%. We were originally offered a 2.9% finance rate and that was the rate offered by BMWFS in September. The rate dropped to 1.9% in November. Both these rates were the rates currently offered on BMW Canada and confirmed by CarCost Canada.

I requested that the dealer confirm that we would be able to get the 1.9% rate and this is what I received:

"The interest rate fluctuation will not affect you whether it goes up or down because BMW is providing you with the a payment comparable to your previous contract. BMW is subsidizing the interest rate in both cases. The 2.9% quote is a combination of rate subsidy and discount. The 1.9% rate is the same as your previous contract so BMW is essentially reallocating the discount funds required at 2.9% to the rate subsidy (which was the case on the 2015 model)."

I can see no "rate subsidy" that we are receiving relative to any other buyer as the standard rate offered was 2.9% and is now 1.9% As well, how is there any "discount" in the rate, when it is the same rate offered to all buyers?

Thoughts on what is going on here and how to deal with this will be appreciated!

The only way that I see that working is if (1) BMW gives a cash incentive against your purchase price to get you to the same down payment and monthly payment you would have had with the lower rate or (2) pays funds to BMWFS to get them to bring down the rate to 1.9%--similar to paying points on your mortgage to get a lower rate. The message you received isn't clear at all.

[Beowulf65]

Originally Posted by tex2670

The only way that I see that working is if (1) BMW gives a cash incentive against your purchase price to get you to the same down payment and monthly payment you would have had with the lower rate or (2) pays funds to BMWFS to get them to bring down the rate to 1.9%--similar to paying points on your mortgage to get a lower rate. The message you received isn't clear at all.

Yes...the message is as clear as mud. Thanks for the thoughts. I will pursue clarification with my dealer.