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In case you were interested in driving a BMW i3 but were afraid of getting into a traditional lease, there's some good new for you. We think. BMW recently announced that it would offer something called "OwnersChoice" and "OwnersChoice with Flex" to make the elegant city EV an easier purchase. Or temporary purchase, anyway.

Something called "OwnersChoice with Flex" is not listed on the federal government's consumer information page on vehicle financing and we couldn't get a better explanation out of BMW than the official announcement, but the gist appears to be that an i3 buyer can make a gigantic balloon payment at the end of the contract term in order to pay less in monthly costs along the way.

The way Automotive News describes it, the typical balloon note chains the buyer to the car in such a way that, while you can get lower monthly payments, you're still on the hook for the amount of the financing even if you return the car. With OwnersChoice, if you give the i3 back after the contract is done (usually after three years), you're in the clear. With OwnersChoice with Flex, you need to pay up no matter if you keep the car or not, but you can take the $7,500 federal tax incentive and increase your balloon payment by - let's see here, what's the amount? ah, yes - up to $7,500, which would knock $208 (7,500 divided by 36) off your payment every month.

BMW Group Financial Services (GFS) came up with this new lease/payment hybrid thing, and Fred Isele, BMW GFS vp of sales and marketing, says it lets owners get, "a comfortable payment for one of the highest technological and efficient premium electric vehicles available to date."
Show full PR text
BMW GROUP FINANCIAL SERVICES OFFERS 'OWNERSCHOICE WITH FLEX' FINANCING PRODUCT WITH PURCHASE OF NEW i3 -- PROVIDES END-OF-TERM OPTIONS SIMILAR TO LEASING, YET BENEFITS OF OWNERSHIP

WOODCLIFF LAKE, NJ – February 25, 2014 – With the launch of the BMW i3, the brand's first premium electric vehicle, BMW Group Financial Services becomes one of the first in the industry to create a financial solution to ownership that provides eligible customers with the options to lower their monthly payment and return the vehicle at the end of their contract term. The financing product called 'OwnersChoice with Flex,' provides eligible BMW i3 customers the option to increase their final OwnerChoice balloon payment due at the end of their contract term by up to $7,500. This increased final balloon payment reduces the amount of the customer's required monthly payment. Eligible buyers of a new i3 may also be able to receive a Federal EV Income Tax Credit. Customers should consult with tax professionals to determine if they qualify for the tax credit as eligibility is complicated and subject to change.

According to Fred Isele, Vice President of Sales and Marketing for BMW Group Financial Services, 'OwnersChoice,' is similar to a lease program in that the retail contract provides low monthly payments followed by a balloon payment at the end – however, the distinct difference remains in ownership.

"Owners can gain a comfortable payment for one of the highest technological and efficient premium electric vehicles available to date, and know that we've created end-of-term options including optional return of the vehicle, while providing them a means to own the vehicle," said Isele.

End-of-term options include completing the purchase of the car by paying the full balloon payment due at the end of their contract term, or returning the car in exchange for a pre-determined vehicle price and paying the remaining amount of the balloon payment at that time.

'OwnersChoice' will be available in 48 states for the new BMW i3 subject to credit approval, state restrictions, and other conditions. Isele notes that while the program provides ownership, it includes a walkaway vehicle return option similar to a lease.

About BMW Group Financial Services

BMW Group Financial Services was established in the U.S. in 1992 to support the sales and marketing of BMW products. Since then, the Group has expanded to provide service to markets in multiple countries and continues to evolve beyond its role as a captive finance unit.

BMW Group Financial Services offers a wide range of leasing, retail and commercial financing and banking products tailored to meet the needs of the BMW customer. The Group also provides financing to BMW dealers for expanding dealership capabilities and enhancing overall operations. With more than $36 billion in serviced assets and 1,031,000 automotive lending customers across the U.S., Canada and Mexico, BMW Group Financial Services finances almost three-quarters of the BMWs sold or leased in North America. BMW Group Financial Services employs more than 800 people, including consultants and temporary workers, most of whom are located in the Hilliard, Ohio, Regional Service Center, which serves the U.S., Canada and Mexico.

In 2001, the MINI Financial Services division was established to provide support for the brand's dealers and its customers by offering financing and leasing options and branded financial services products. Alphera Financial Services was established in 2006 to provide financial services to multi-brand dealers.

BMW Group Financial Services also offers credit card products through its subsidiary, the BMW Bank of North America. up2drive.com is a division of BMW Bank of North America, a wholly-owned subsidiary of BMW Financial Services NA, LLC. BMW Insurance Agency, Inc., a property and casualty producer is also part of BMW Group Financial Services.

Information about BMW Group products is available to consumers via the Internet at:

www.bmwgroupna.com
www.bmwusa.com
www.bmwmotorradusa.com
www.miniusa.com
www.rolls-roycemotorcars.com


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    • 1 Second Ago
  • 6 Comments
      fairfireman21
      • 1 Day Ago
      I hate it when they say "you get $7500 back with the tax credit". That is not always true. First to get the $7500 you must have paid in $7500 min as income taxes. To give you an example if you pay about $500 per month in taxes which comes to $6000 per year, you would only get a max tax credit of $6000. You do not get $7500 every time right off the bat, the Government will not give you more than you have paid.
      CoolWaters
      • 1 Day Ago
      Are you saying: 1) You have a lease-to-buy arrangement. You lease for 3 years, then you go to your bank and finance a 5 year auto loan, and make a "balloon" payment to buy the car. 2) Also, you can take the Federal Tax credit in Year 1, but you pay for the credit in the balloon payment portion. if you're in an upper tax bracket, I guess it makes sense.
      gomducks
      • 1 Day Ago
      CoolWaters, no this is not a lease at all. It is a purchase loan with a balloon payment at the end equal to the projected value of the car. BMW offers a guaranteed buy back when the balloon is due so you can pay the balloon or walk away from the car. If you choose you can add your $7500 tax credit to the balloon and presumably pay that when your tax credit comes in. If you don't, then at the end of the balloon you would have to pay that $7500 to walk away or pay the balloon which includes the $7500 to keep the car.
        Marco Polo
        • 1 Day Ago
        @gomducks
        @ gomducks The is a very common form of auto-finance outside the US.
      Michael
      • 1 Day Ago
      I see this ending in confusion for a lot of people.
        Tunagimp
        • 1 Day Ago
        @Michael
        Yep, that's why this once and former Electronaut walked away after being shown lease and purchase numbers that resembled home mortgage payments in much of America. There was also the part where the poor sales guy (A truly nice guy, by the way) and I had a very difficult time keeping the laughter under control during most of this session. Fortunately for me, the Fiat "Studio" is right next door (owned by the same company) and I drove off in a 2014 500e with a sunroof for $995 down and $220/month. Word to the wise, the Fiat people have a ton of these things to unload and they're dealing. And really folks, lose the "Compliance Car" mantra, if BMW had seen it fit to make their EV based on a 1 series hatchback, I'd be driving one. As it is, I'm shopping for slapshoes and a wig to match my new ride. The nose was already in the glove box. Cue, Mr. Baloney drop by to bury this post in 5,4,3,2.......