I've been trying to figure out what route to go - and wondered if anyone has any extensive research in this area...

I have all of 5 options:

Pay in cash (do NOT want to do, as I will end up borrowing a little bit to do this anyways)

Lease-to-buy (high residual value seems prohibitive, I think it will cost me around 4,000 more)

MINI Select (MA told me it was much more costly than leasing)

Traditional Financing (from MINI - anyone know what this is like?)

Finance through Bank (investigating this route as I write, will cost me 2,000 in the long run due to interest)


What I am interested in are the options provided by MINI. Anyone gone either of the three routes?

Thanks!

John

 

Here is what I did when I took delivery of my '05 MCS in late March. I took an online loan with www.capitaloneautofinance.com for 30 months @4.09% (Today their lowest rate is 4.65% ). Put $10K cash down and financed the rest. I will own the car outright in about 2 years or less if I pay it off sooner. Capital One is the best! I don't work for them but I have financed 3 new MINIs with them in the past 3 years and the customer service, rates, etc have been unbeatable. I find them I much better deal than my credit union. Just walk in into the dealership as a "cash" customer, you are in control with the blank check.

Depending on your financial situation, leasing may work or not work out for you. I am not a big fan of leasing because over the long run the car is more expensive than financing it or purchasing it outright. Also you have to keep an eye on the mileage and wear and tear to keep from getting nailed at the end of the contract. In my opinion lease a BMW, Lexus or Mercedes, but a cool and fun car like the MINI is meant to be fully owned and enjoyed without the restrictions from some cold and obscure leasing institution.

Just my humble opinion...

 

We all had most if the same options. I voted to go the credit Union route where I got a 6 year note (which I promised to pay back early... that was 8/02 and it hasn't happened yet) for about 1% point less than Mini could get me. Still, now that I'm down to about a 10G payoff it won't be long till a little windfall could let me be free and clear. Just get pre-approved at your bank/Credit Union and keep telling the finance guy, "no thank you".

 

I too, went the credit union route. ALL dealers will try to give you the highest interest rate that they can get away with, financing is another profit center.

If you go in knowing what your credit history deserves and what a local lender will give you, you can negotiate from a position of strength. I got 3.49% from my CU a year and a half ago. The dealer started me at 6.5%. I just said no. They never could get under 4%, so I didn't use MINI.

I think it's a good idea to write all your options down and look at them on paper . . . let us know which way you go.

 

Before you start applying for loans/leases, get a copy of your personal credit report from the 3 main bureaus:


www.equifax.com

www.transunion.com

www.experian.com

Make sure (and don't just assume) your credit is in pristine condition and there are no errors on your reports.

 

Ahh, a few more things to note...

I have 0 credit - my dad will most likely take it out, until I build my credit up (college student with very very good job, never had a credit card). My parents credit is good.

I am cheaper than the guy who checks public telephone change returns.

I have been tasked with selling two cars - this *could* happen without me getting a MINI, but would be difficult - one is a really bad Honda which will sell for at most 500.00. The other is a GM Safari which should run about 3,500. The Safari has a camper, which could "easily" sell for 3,500 as well. The Safari is driven daily. The Honda is started every week, but not driven. Any takers : )

I've applied at my CU to see what kind of rate I'm eligible for. I don't mind paying anywhere from 1,500 to 2,000 extra if I go the bank route. If I get the financing rate I'd like.

Thanks for the input! I'd rather not waste the time getting quotes at the dealer (either MCM or Classic) if the rates are not "fairly" assigned.

John

 

I went to Capitol One and got approved for the loan for the Mini.
I went to BMW and applied.
Walked into the dealership the day the car was delivered. Checked the BMW rate. Showed the F&I guy the rate from Capitol One. Let him offer to beat the rate.
Walked out with the car at 6.09% for 4 years through BMW/USA.

Make the lender work for you, not the other way round.

FWIW, i have less than stellar credit and I'm self employed.

 

Hey, that's exactly what I did! Except that mine loan was from my credit union and cost me about 5% (3 years ago). After about a year I looked at how much I was paying for the loan and what I was getting for my savings, and promptly paid off the remainder of the loan. The MINI's been aaaall mine ever since!

Being old school (sounds so much nicer than just plain old!) I get real uncomfortable with the idea of car loans that last longer than 3 or 4 years. I figure if you can't pay off a car within four years, you should probably look for a less expensive car. Fortunately MINIs are holding their value well so you probably don't have to worry about owing more than your car is worth, but that may not last forever. Besides, with a four year loan you'll have your car paid off when the warranty runs out and you start paying for repairs!

BTW you might want to play with an on-line loan computer to see how much various loan terms and rates will cost you. Here's a link to one:
http://www.golden1.com/calculators/kje2/AutoLoan.asp

 

Mini Financial Services offers a College Grad program you might wanna look into...

 

This may be getting a bit into the details, but for figuring out how much a loan costs, you have to figure out something called the present value of the money you're going to spend in the future. This takes into accout the fact that the future $ will "cost less" because of inflation, and if you go the extra mile in the calculation, you can even take into account the money that the capital will earn while you have your loan.
What it comes down to is that the real interest you pay on the loan is actually lower than just figuring out the interest rate minus inflation. Also, we're at a very low interest rate period, with hints that it's ending. IF you get a fixed 6 year loan at around 4%, and inflation goes up more than 1%, the loan in free! If interrest rates go up more, taking a loan and putting the cash to work actually EARNS you money.
If you're already deciding on some sort of financing, all the opportunity costs (what your cash can earn) and present value calculation cancle out (at least for options of the same term), and it just comes down to finding the lowest interest rate (duh!).
but by using slightly more complete financial models of the loan, you can really ensure that you are paying the least cost for the highest value.....

Matt

 

CASH!!!!!

Cash is the only way to go if at all possible. Even if you have to borrow a small amount from a relative or friend, cash without a doubt is the best way to go.

If you do any financing the car will cost more money than you could believe even if the rates you get are low. And the finance fees are something that you never get back once you go to sell the car. A $25,000.00 car can easily cost you way over 30 and you will never know
it because you rip yourself off blindly.

CASH, CASH, CASH

 

Are you planning to mod it? cause if you pay cash and use up all your funds
dedicated for your car you might not be able to... if you're going to
leave it stock I suggest you pay cash.


example:
1) Payoff now, but can't mod and drive around couple of years with 90% satisfaction (if you're a person that likes to mod cars)

2) Payoff later, mod it now, and drive around with 100% satisfaction.

 

The only mods I plan are: Parcel Shelf (maybe), Aux input, arm rest (maybe), and 2005 cup holder (maybe). Just cosmetic. But not immediately. Probably via eBay. Nothing performance wise.

I also got a postcard yesterday in the mail from my CU - it offers 1% off an auto loan. Hmmm. However, I have to present the card when I apply - they probably bump the % up then take off % so it looks like I get a deal.

My dad's indicating that anything over 3% is too high - and he is under the impression that he can get that rate OR around there.

Regarding the loan calculator - thanks! My CU has one, but you have to go through several menus...

John

 

Unless you can invest that cash instead into something that pays a higher rate that you're paying. If interest rates go up, that $25k that you just paid up front, could be making money for you.

 

CASH - as long as you have your "emergency fund" - that's what dave ramsey would tell you haha

 

Cash. The other options for me were not very great. They ended up being 3,000+ over cost of vehicle. I needed a bit o' assistance from my parents, but I think it will be worth it. In the long run, I will either sell the car or get the GE extended warranty (if MINI doesn't come out with one first).

Wish me luck...

 

Something to keep in mind to everytime you apply for a loan it brings you score slighty down, so don't apply til you're sure.

 

I went cash when I got KITT. Granted the choice for you is what will fit you best but here are the reasons why I went cash.
1)Any dealer will agree if you're paying in cash you have more pull or they may give you a slighty better break on the car or free crap. (I got lots of free crap when I got my cause I paid in cash)
2) no interest to pay at all ever!
3) no leins... which was great cause I ended up moving out of state 6 months after getting the car (which I didn't know would happen before hand) if I had, had a lein life would have been a living hell transfering everything.
4)Leasing you have to be kinda careful of what mods you add and how and milesage except if you buy it out at the end...
5) If a car is leased or there is a lein etc etc my companys will make you take full insurance coverage on the car til it's paid off meaning higher insurance. Granted full coverage is a good idea, but on my old car the amount i have after the loan was done and I changed the coverage slighty at four years old was like $400 a year.
6) will you have the money to make the balloon payment at the end of the lease?
The re-sell value of these cars is awesome I think you money may be better on in the mini than in any savings account or stocks etc etc. Say you savings account get 2% interest but you paying 4% on the mini loan.... it's not gonna to make up for it.
Those where my reasons, best of luck and keep us posted.
Liz

 

Well, like I said, I'm paying cash :smile:

The reasons you mentioned were exactly why I'm doing the cash route. It may not be the best if I'm in a pinch, but with the family vehicles I will be selling, should be relatively secure.

Thanks for all the responses!!

 

Not really. There have been changes to the Fair Reporting Credit Act (FRCA) in the last few years and among those changes, consumers "Shopping" around for big ticket items such as cars and homes can apply more than once on a short period of time for loans as it is assumed these consumers are applying for the best possible rates/terms given their current credit situation. Applying in 2 or 3 dealerships (or banks) when buying a new vehicle will not lower your FICO credit score.

On the other hand, consumers applying frenetically for loans or unsecured credit cards (And such requests are rejected) will face lowered FICO scores.

You have to make the distinction between shopping around and those people with financial problems trying to open new lines of credit left and right to "solve" thier problems.

 

But not everyone is in the financial position to pay "cash" for a brand new car. While the MINI have incredible resale values (Just ask me, I sold my '04 MCS for $700 above of what I originally paid for it brand new), I don't think it is very wise to "invest" it all at once on a seemingly depreciating item.

I am not an advocate of leasing either. What I prefer to do is to put down 40%-50% of the total price of the car and finance the rest at no longer than 36 months. My '05 MCS I put down $10K cash and financed the rest for 4.09% APR for 30 months (27 to go, but plan on pay it off way sooner).

If I don't want to pay interest, I can apply for a Discover Platinum card with 0% APR for life, transfer out the remaining balance from the existing loan and pay it down with no interest accrued. This way I don't have to tie up all my cash into the car at once

My other MINI, a '02 MC CVT is already paid off, free and clear. I originally took out a 36 month loan for 3.49% APR and paid it off in about 10 months.

 

You are on the right track to pay cash. As soon as you get your MINI, start saving up for your next car. Plan ahead, be disciplined and live within your means. You are young, and if you start early you will be way ahead in the long run. Happy motoring:smile: