BMW i3 Bottom Line: $494/mo With No Money Down

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.

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State of Washington Approves BMW i3 REx For Sales Tax Exemption

A little over a month ago we learned that BMW i3 REx buyers in New Jersey wouldn't have to pay sales tax on the vehicle as the State was including it in the zero emission vehicle tax exemption. That will obviously help i3 REx sales immensely since it will likely save the average i3 REx buyer in New Jersey about $3,500. There was never a question of whether the BEV i3 would be tax exempt, since it is truly a zero emission vehicle, but the i3 REx isn't. The range extended Chevy Volt, for example is not tax exempt in NJ. The reasoning behind the i3 REx exemption is two fold. First, the i3 REx has about an 80 mile all electric range which is more than double the Volt's. This means for most buyers the i3 REx will likely be driven on electric much more than the average Volt owner drives their car on electricity. Secondly, the i3's range extender isn't as robust as the Volts. You could easily drive the Volt all the time without ever plugging it in. I don't know why you would buy a Volt and do that, but you could without any problem. The i3 REx on the other hand could not be driven like that, and it really needs to be charged and driven in electric mode most of the time.

So today we got news that Washington State followed New Jersey's lead and certified both the i3 BEV and i3 REx to get the State's zero emission tax exemption, saving i3 REx buyers in The Evergreen State a good chunk of change. In fact, most i3 REx buyers there will likely save as much as the REx option costs-$3,850!

I noticed that InsideEVs just put up a post about this and since I'm currently in Geneva covering the Geneva Motor show for them I figured I'd "borrow" Eric Loveday's post on this. Below is the full post he made for InsideEVs.com:

“We ARE smarter than California,” says Washington state representative Chad Magendanz.

BMW i3 With REx Qualifies For Sales Tax Exemption in Washington

Magendanz made that statement before and now he’s saying it again.

When Magendanz stated that previously, it was to make it know that he was urging the state of Washington to grant the BMW i3 REx sales tax exemption.  This idea was that Washington would jump in front of California, a state that seems reluctant to award EREVs due to the ICE on board.

Now, Magendanz is saying “We ARE smarter than California” again, but this time it’s to celebrate the fact that the i3 REx will be sales tax exempt in Washington.

Per the press release sent to InsideEVs:

• Dept. of Revenue reverses itself, says new electric BMW with made-in-WA parts will get tax exemption after all
• State Rep. Chad Magendanz was happy to find out that one of his prime-sponsored bills is unnecessary, now that a state agency has reversed its position on a tax exemption for electric cars.

The Issaquah Republican had been pushing legislation to clarify that electric vehicles such as the new BMW i3 qualify for a state sales tax exemption. The state Department of Revenue (DOR) told Magendanz last month that the i3 – which has carbon fiber parts made in Washington – wouldn’t qualify because of an optional gas-powered “range extender” BMW offers to consumers worried about their car running out of power. Magendanz introduced the bill to counter the department’s interpretation of the exemption law, but last week DOR informed lawmakers it had changed its mind.

“It’s a great thing when common sense prevails in government,” said Magendanz. “Unlike California, Washington is sending the message that we encourage innovative, environmentally-friendly automotive technology.”

The issue of the sales tax exemption came to Magendanz’s attention when he read that California had backed out of a deal with BMW to grant the i3 the state’s coveted “Clean Air Vehicle” white decal, which gives drivers full access to HOV lanes. California said the range extender – even though it’s optional and not permanently connected to the car – compromised the i-3’s status as a solely electric vehicle.

The i3 is expected to hit the U.S. market this spring. SGL Group in Moses Lake produced carbon fiber components for the car’s passenger compartment.

The bolded statement of “not permanently connected to the car” is clearly inaccurate when one opts for the i3 with REx.  And some of the anit-California comments are untrue too, such as the i3 not qualifying for the white sticker, which is actually does, provided its the BEV version.

Washington joins New Jersey, site of BMW’s US headquarters, in exempting the i3 REx from sales tax.

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