I wrote this post a few days ago for BMWBLOG. There has been so much speculation and incorrect information circulating in regards to the OwnersChoice with Flex option that BMW FS is offering on the i3 that I wanted to get some info out there on it. It's a new product, so it's certainly understandable why there are questions. However I've read where people have gone as far to call it a "convoluted scam" as if it's just a way to charge the customer more money and in fact it's the opposite. Using OwnersChoice with Flex you can drive off in a base i3 BEV with no money out of pocket for as little as $494/month depending on where you live. Now that BMWBLOG has had it for a couple days and InsideEVs has run it also, I figured I'd put it up here also. If you have any questions, please fell free to ask in the comments and I'll answer whatever I can.
BMW i3 Bottom Line: $494/mo With No Money Down
There has been a lot of speculation with regards to financing rates and residual values for the BMW i3. A few months ago we ran this story where we posted preliminary i3 residual values that were lower than the residual values of other electric cars.
BMW Financial Services evidently took a closer look and now that the official financing figures are out we see they increased the residual values by 4% across the board.
Original Reported Residuals Actual Residuals
- 24 month residual – 49% 53%
- 30 month residual – 44% 48%
- 36 month residual – 39% 43%
- 42 month residual – 34% 38%
- 48 month residual – 28% 33%
- 54 month residual – 25% 29%
- 60 month residual – 21% 25%
(These figures are based on 15,000 miles per year. Add 2% for 12,000 mile/year leases, 3% for 10,000 mile/year leases. Extra mileage is charged at 20 cents per mile.)
Additionally, the online “Build your Own” BMW i3 site now features monthly payment calculations for OwnersChoice with Flex. Up until now, only the MSRP was listed. OwnersChoice with Flex is a new product created by BMW Financial Services specifically for the i3. It allows the customer to take up to $7,500 off the price of the car as a capitol cost reduction, thus allowing lower monthly payments. The customer does not have to pay the money up front and basically owes that to BMW FS. The reason $7,500 is the cap is because that is the maximum amount of the federal tax credit that the i3 qualifies for. BMW FS is basically lending the customer the money so they can have lower monthly payments.
The customer can repay the Flex capitol cost reduction anytime (like when they get the money back on their taxes) or wait until the end of the term. At the end of the specified term, the customer has the choice of returning the car and paying the amount they took as the capitol cost reduction (if they didn’t repay it already), or keeping the car and paying the residual value, plus the unpaid capitol cost reduction. It’s really a purchase, that offers the benefits of a lease and lets the customer decide whether they want to keep the car or return it at the end of the term.
So what’s the bottom line on a 36 month OwnersChoice with Flex work out to? With no money out of pocket, depending on where you live you can drive off in a base i3 BEV and your payments will be $494 per month for 36 months. That’s with taking the full $7,500.00 capitol cost reduction (which you then owe BMW FS) and with only 10,000 miles per year allowed. If you load the BEV i3 up with every available option the monthly payment raises up to $661 per month. It’s worth noting that these figures do not include sales tax. There are states where electric vehicles are sales tax exempt (like New Jersey where I live) and it appears the i3 site does not add the sales tax regardless of whether you use a zip code where sales tax is collected or not. Perhaps that will be corrected though, as they only updated the site to show the monthly payments within the past day or so.
The OwnersChoice with Flex was developed by BMW Financial Services specifically so i3 customers can realize the full $7,500 electric vehicle federal tax credit. When leasing an i3, BMW FS will only pass $4,875.00 of the $7,500 federal tax credit along to the customer. They are standing by their statement that they do not get the full $7,500 credit, and are passing along every dollar that they do get to the customer. This likely makes leasing a poor option on the i3 when compared to OwnersChoice with Flex.