What Is BMW Select Financing?

If you’ve been eyeing a new BMW but aren’t quite ready to commit to purchasing one, BMW Select Financing may be an attractive option. This unique financing program combines the lower monthly payments of leasing with the ownership benefits of traditional financing.

In this comprehensive guide, we’ll explain everything you need to know about BMW Select Financing so you can decide if it’s the right choice for you.

An Overview of BMW Select Financing

BMW Select Financing is a type of balloon financing agreement offered directly through BMW Financial Services. With balloon financing, you only pay for a portion of the vehicle’s total cost during the length of the financing term. The remaining unpaid amount is then due as a large “balloon” payment at the end of the contract.

Here’s a quick rundown of how BMW Select Financing works:

You make lower monthly payments, similar to a lease. This is because you’re only paying on a portion of the vehicle’s price over the financing term.
At the end of the contract term, you owe a final “balloon” payment. This is typically a percentage of the vehicle’s MSRP.
When the balloon payment comes due, you have flexibility. You can pay it off and keep the car, trade it in towards a new BMW, or refinance the remaining amount.
Unlike a lease, there are no mileage restrictions or penalties for wear and tear. You own the BMW throughout the financing term.

BMW Select provides the lower monthly cost of leasing with the freedom of ownership. You also have more flexibility compared to traditional financing that requires paying off the entire vehicle cost.

Who Should Consider BMW Select Financing?

BMW Select Financing appeals most to drivers who want the luxury of driving a new BMW but are still building their financial portfolio.

The program allows you to get into a BMW now, with more affordable monthly payments during the contract term. This gives you time to save up for the final balloon payment if you wish to keep the car long-term.

BMW Select also provides flexibility at the end of the financing term. If you aren’t in the position to pay the balloon payment all at once, you can refinance the remaining balance and continue with manageable monthly payments. Or you have the option to trade it in towards a new BMW.

In summary, BMW Select Financing is a strong choice if:

You want lower monthly payments to fit a BMW into your current budget
You are still establishing your finances and need flexibility
You want to drive a BMW but aren’t sure if you’ll keep it long-term
You like the freedom of owning versus leasing restrictions

BMW Select Financing is not offered in Illinois, North Carolina, North Dakota, New Hampshire, Nevada, Pennsylvania, Texas, or West Virginia. Everywhere else, you can take advantage of the program’s unique benefits when you buy a new BMW.

How Does BMW Select Financing Work?

Now that you understand the basics of BMW Select Financing, let’s look at how it works in more detail.

With this balloon financing program, your monthly payments are lower because you are only paying off a portion of the vehicle’s total cost during the initial financing term.

The length of the financing term can vary, but commonly ranges from 24 to 48 months for BMW Select. The longer the term, the lower your monthly payments will be.

You will need to qualify for BMW Select Financing based on your credit score and income, just like with standard auto financing. Interest rates can range from 0% on certain models to up to 5% APR, depending on your creditworthiness. The better your credit, the lower the rate you’ll qualify for.

At the end of the financing term, you will owe the remaining unpaid portion of the vehicle’s cost in a large final balloon payment. To determine the balloon amount, BMW Financial Services uses a percentage of the vehicle’s MSRP along with other factors like your credit score and estimated future value of the BMW model.

For example, if you finance a $50,000 BMW for 3 years with $20,000 paid through your monthly installments, you may owe a $15,000 balloon payment at the end of the term. This amount goes towards purchasing the remainder of the vehicle.

Once the final payment comes due, you decide whether to pay it off in a lump sum, trade in the BMW, or refinance the balance. BMW wants to ensure you aren’t stuck with a payment you can’t manage.

Comparison to Leasing a BMW

Since the monthly payments are lower, you may be wondering how BMW Select Financing compares to leasing.

While the monthly costs are similarly low, there are a few key differences:

You own the BMW: With BMW Select Financing, you own the vehicle from the time you drive it off the lot. A lease is essentially a long-term rental.
No mileage limits: Leases restrict the number of miles you can drive annually to avoid excess wear and tear fees. BMW Select has no mileage constraints.
No wear and tear penalties: Since you own the car, you won’t face any end-of-lease inspection or penalties for normal wear.
Hassle-free: Turning in a lease requires meticulous cleaning and a thorough inspection. BMW Select is hassle-free when your term ends.
Equity: Any equity you have in the vehicle is yours to keep when you trade it in or sell it. With a lease, you walk away at the end with nothing.

For these reasons, BMW Select provides more freedom and flexibility compared to leasing while still offering affordability.

Available BMW Select Financing Terms

BMW allows you to choose from different financing terms to accommodate your budget. Here are some of the more common terms along with down payment options:

24 months – Terms as short as 2 years are possible. Around 10-15% down is typical for a 24 month financing.
36 months – This is one of the more popular BMW Select financing options. You’ll generally put down around 10% on a 3 year term.
48 months – Going up to a 4 year term will maximize the savings on your monthly payment. Around 7-10% down is expected.
60 months – A handful of models are eligible for 5 year financing, typically with a 7-10% down payment.

At the end of your selected financing term, the remaining unpaid balance will be due as a final balloon payment. Know that refinancing this amount is always an option if you need more time to pay it off.

BMW OwnersChoice Balloon Financing

In a few states, BMW offers a very similar balloon financing program called BMW OwnersChoice. This program is available in Illinois, Texas, and Georgia as an alternative to Select Financing.

The main difference with OwnersChoice is that BMW Financial Services will guarantee the future value of your BMW when calculating the final balloon payment. This adds extra peace of mind by locking in the remaining amount you’ll owe at the end of the term.

OwnersChoice shares all the same benefits in terms of lower monthly payments and flexible end-of-term options. Everything discussed about BMW Select Financing also applies to OwnersChoice for IL, TX, and GA residents.

Getting Approved for BMW Select Financing

Wondering if you’ll qualify for BMW Select Financing? Here are some tips for getting approved:

Credit score: A minimum credit score around 680 is recommended for the best approval odds. The higher your score, the better the interest rate you can qualify for.
Down payment: A 10-15% down payment will look most favorable for approval and getting you the best rate.
Debt-to-income ratio: Lenders prefer this ratio to be below 30-35%. The lower the better for your chances.
Income: Expect to provide proof of income through pay stubs, tax returns, etc. A stable and predictable income helps.
Application: The standard auto financing application through BMW Financial Services also serves as your application for Select Financing.

Improving your credit score and debt-to-income ratio in advance will go a long way in getting approved hassle-free.

BMW Models Eligible for Select Financing

Virtually every brand new BMWmodel sold at authorized dealerships will be eligible for the BMW Select Financing program. This includes sedans like the:

BMW 3 Series
BMW 5 Series
BMW 7 Series

As well as BMW luxury SUVs such as:

BMW X3
BMW X5
BMW X7

And performance models like:

BMW M3
BMW M5
BMW M8

There are also BMW hybrids and electric vehicles that qualify:

BMW i4
BMW i7
BMW iX

The full range of new BMW cars, SUVs, coupes, and convertibles are available with Select Financing. Your local BMW dealer can confirm eligibility when you visit.

BMW Select Financing vs Traditional Financing

How does BMW Select Financing compare to traditional auto financing? Here are some of the major differences:

Monthly payments – Lower with Select since you’re only paying on a portion of the total cost during the term.
Balloon payment – No large final payment with standard financing. You pay off the full amount.
Interest rate – Depends on credit but rates are similar between the two.
Ownership – You own the car immediately with either financing type.
Flexibility – Select offers more flexibility at the end of the term.
Term length – Traditional financing terms are often longer, up to 72 months.

Select Financing offers affordability through lower monthly payments. Traditional financing has the benefit of simply paying off the car in full over your chosen term length.

Your BMW dealer can help you decide which type of financing best aligns with your budget and needs.

FAQs About BMW Select Financing

How much is the down payment on BMW Select?

You can expect to put down 10-15% of the vehicle’s price as a down payment or trade-in. This helps secure approval and get the best interest rate based on your credit.

How long do BMW Select Financing terms last?

The most common terms are 24, 36, and 48 months – but terms up to 60 months are available depending on the BMW model. Longer terms have lower monthly payments.

What credit score do I need for BMW Select approval?

Aim for a minimum credit score of 680 for the best chance of approval. Over 720 will help you qualify for the lowest available interest rates.

Can I get 0% APR with Select Financing?

Yes, 0% APR promotions are occasionally available on certain BMW models. Offers vary, so check with your dealer for current promotions.

What is the maximum mileage for BMW Select Financing?

Unlike leasing, there are no mileage restrictions with BMW Select. You own the vehicle, so you can drive as many miles as you want without penalties.

Deciding if BMW Select Financing is Right For You

In summary, the BMW Select Financing program provides an excellent middle ground between leasing a BMW and traditional financing.

The balloon payment structure results in more affordable monthly payments by only paying off a portion of the car’s price during your contract term. This makes driving a luxurious new BMW more accessible.

You also get all the perks of ownership, like no mileage limits, the flexibility to modify or customize the car, and the equity should you trade it in later.

BMW Select Financing is ideal for those who want access to BMW’s luxury vehicles but don’t need to commit to 6 years of payments. The program provides flexibility at the end of your term to refinance, pay off the remainder, or get a new BMW.

If you want lower monthly costs to fit a BMW into your budget along with flexible end-of-term options, BMW Select Financing has outstanding benefits unavailable through standard financing.

Visit your local BMW dealer to learn more about available terms, interest rates, and models eligible for the Select Financing program. They can advise you further about this financing option to decide if it’s the right fit.