Did anyone opt for the MINI Select purchase option? Is it worth it? What are the pros and cons?

Thanks in advance!

 

I did. I'm happy with it. Lower monthly payments, and a car that's still worth significantly more than I owe on it at the end of my 36 month contract.

 

I am opting for it. Because of my situation keeping the lower monthly paymet at this time was important to me. i was not planning to buy a new car at this time but after I totalled mine in the blizzard a few weeeks back, I needed somthing that kept my payments low.

The Pros:
Low monthly payment
No money up front like a traditional lease.
Only paying interest on the amount of depreciation in the terms
Any additional money added to the monthly payment goes to the remaining balloon balance

The Cons:
You will owe a big balloon payment at the end of the term
If you keep the car you will need to refi it
If you don;t plan for the balloon, it could bite you.
There maybe some additional finance charges paid by additional loan terms
The residual value may not be what is projected at the beginning.
The interest rate is about .75 to 1.0 percent higher

My plans are to go 36 monhs and add an additonal 50 dollars a month when it is feasible. To give you an idea or the difference, if I went with a 60 month and 3000 down my purchase at 4.99%, my monthly payment would be around 530 to 540. With the MINI select plan with 3000 my payment will be 378 with a balloon of 16,000 due at the end. I will also plan to put a large chunk of moeny at the end of the term and refi around 10000 for an additional 2 years.

It is not for everyone but it fits my situation right now. Think of it as a lease with the flexibility of ownership

 

I work in finance, but don't have a 100% understanding of Mini in particular.

My understanding is that they will give you a low payment similar to a lease payment. At the end of those payments you will still make a final payment based on how much you still owe on the car. This amount will be higher (possibly much higher) than the purchase price less the payments you made. You can make this payment anyway you want: Cash or finance the lump-sum amount. Assuming you finance the lump-sum amount your payment will be much higher than before. Another option you will have is you could sell the car at that time and hope to get enough out of it to cover the lump payment making yourself free and clear of the car after X years of lower payments.

It all really depends on what stream of payments you want. If you want low payments and then high payments, then do Mini Select. If you want consistent payments, Purchase. If you just want low payments period, lease and don't break the mileage restrictions.

 

Dont be a fool , get a straight loan from a reliable bank/credit union for your needs.

 

Ouch, that's kind of harsh. I can see where this type of plan might be a better fit for some people; particularly college students who aren't currently making a lot but have good prospects in 3-years time.

 

I also hear that you have to have a good credit score to qualify for the MINI select option.

I'm planning on putting down a large chunk up front and going for the 48 month term. From the calculator, I should have about a $210/month payment. I'll pay extra every month when I can and hopefully the balloon will be pretty low or I will be done with the whole thing at/before the 48 months. ... Does that sound like a reasonable plan?

 

I opted for the MINI Select plan. I'm a college student, and not a fool, and this was my first car purchase. I did MINI Select for a 36 month term and put 3 grand down on the car. In three years I can make my balloon payment which if I want, I'll re finance another 3 years. My payment should stay about the same of $388 a month. I'm happy and in 3 years if I want to upgrade, I'll probably sell and get more than what I owe on the car.

 

Im a college student and graduating in the summer. I had may dad co-sign even though I have good credit to keep my payments down. I would rather pay more for the car now when I have no other expenses then when I have to pay for food, rent, ect

 

Get your sh*t straight before you go around calling people fools toolbox!

 

Lol

You just got called a toolbox!


New best Insult EVER!
~I drink to you good sir!

 

Renting/Leasing something that depreciates is not a bad plan. Putting money down on something that depreciates is a bad plan though.

Very rarely does someone carry equity in a car in the first three years.

Ask yourself a few questions before leasing.

1) If I almost total(wreck) this vehicle will I return at the end of the lease?
If you wreck the car...and it just never seems "right" after it's fixed...you can return it. Of course you'll have to have the car fixed, but some people hate driving a car after it's been repaired by an insurance company.

2) Am I in love with THIS vehicle or THIS BRAND of vehicle?

3) Do you see yourself under any circumstance trading this unit in for the "new" latest and greatest model?

4) What restrictions are tied to this lease? mileage? Service completed only at Mini dealership? etc

I personally like Leases if you buy new cars. I however don't buy new cars if I can help it. I try to buy used when I can. These days a lease is just an open ended purchase.

If one can work a no money down lease I think it's the best way in the world to buy a car. If you have to put money down...think of it as a apartment cleaning deposit you'll never get back.

Don't lease if you intended on returning the car, and can't live with the restrictions set up in the Lease.

Let's work over a scenario. Let's make some assumptions. All the figures below are rounded and may not reflect an actually Mini purchase, but the "Lease" concept should be more clear. All figures are calculated without interest to make the math easy.

Assume no money down
Price: 30,000 50% residual, meaning you pay 50% of $30,000 in the first 36 months, and the other 50% is the payoff if you buy at the end.

Purchase payment is $600
Lease payment is $400

You can afford the $600 payment...if not your buying too much car. Don't lease for budget reasons. Buy within your budget.

Pay 36 lease payments, put the extra $200 in the bank each month.

Take the $7200 you put in the bank and refinance the final $15,000 you owe. That will leave you $7800 to finance. Finance that total for 13 months...$600 payment.

Purchase: $30,000 takes 50 months at $600 per month
Lease: $30,000 takes 49 months at $600 per month.

Now...give that dang car back, lease a new one and go it again. After doing that 4 times you be able to pay cash for your next car...assuming in 12 years that same car is made for $30,000.

Seriously though a lease gives you some outs. I like that. It's very late here I probably screwed that explanation all up.

 

Hey, whatever fits for your situation. Certainly, paying more early is always the best option. Some people can't swing that though. Whatever the case, it didn't warrant djam43 calling someone a "fool".

 

In my case I was able to obtain a loan and buy my car outright with a cheaper monthly payment than going with MINI Select. You need to shop around for interest rates. If you can't buy outright you may be setting yourself up for problems when the ballon payment comes due.

If MINI Select has a cheaper monthly payment for you just remember the interest you pay over the term of the lease and the finance of the ballon payment will be huge.

In the long run if you can't afford to buy then you need to look for a used MINI or a cheaper 2nd choice car.

 

Thank you, thank you. I was actually drinking to myself when I wrote that.

 

I hadn't heard about this option when buying my MINI but I have always refused to finance with car companies/dealerships (don't trust them as far as i can throw 'em). Seems like it might bite you in the **** in the end if you're not prepared for the sudden increase in payments....kinda like all the people who took out adjustable rate and interest only mortgages....lol.

I can see how this would work for people who really really know they will have a steady/increased income in a few years and who are really good at planning for that...but for the most part, it looks like just another way to get people in something they can't really afford at the time. I would think if one is really good at financial planning and saving in the first place, they could get a traditional loan at a low rate and have a nice down payment to boot.

but hey if you can work the system so that it works in your favor, more power to you!