[Ronin76]

Hi All,

Don't want to bring up boring economic stuff up on a car forum but for guys who plan on financing their cars (yours truly does) this can be a big deal. I was expect a 1/4 of a basis point. Will be interesting what impact this has on car loans.

What do you guys think?

[IamJoe]

Do you know what the current BMW Financial rates are?

[Ronin76]

Originally Posted by IamJoe

Do you know what the current BMW Financial rates are?

I am not 100% sure but someone posted what they saw in a thread the other day and it was lower than my credit union. Currently, my credit union is offering 60 months at 6% and the post in that thread had BMW financial at 5.45% (I think). It was def a decent amount lower than the 6% my credit union is offering.

[Ehloo]

BMW is already subsidizing their current rate. sales is definitely slowing down. more m2’s sitting on the lot

[AZG87]

Originally Posted by Ronin76

I am not 100% sure but someone posted what they saw in a thread the other day and it was lower than my credit union. Currently, my credit union is offering 60 months at 6% and the post in that thread had BMW financial at 5.45% (I think). It was def a decent amount lower than the 6% my credit union is offering.

FYI NFCU is doing 4.49% on 60. This was before the announcement so likely in anticipation of the cuts so doubtful it will be affected or drop any lower but who knows.

[RockCrusher]

Originally Posted by Ronin76

Hi All,

Don't want to bring up boring economic stuff up on a car forum but for guys who plan on financing their cars (yours truly does) this can be a big deal. I was expect a 1/4 of a basis point. Will be interesting what impact this has on car loans.

What do you guys think?

1/4 % or 1/2 % lowering of the interest rate can only lower loan rates.

Will auto companies give all this 1/2% rate cut to its customers who finance/lease cars? Probably not. But still I believe most of it will be used to offer lower rates.

With car lots full of unsold inventory car makers would be foolish not to lower loan/lease rates.

The flip side is even before the rate cut CD interest rates were down. I had a 10 month CD mature that was earning 5.18% (APY) that when I renewed it earlier this month my bank was only offering a 5 month CD for 5.12% APY. I have CD that matures next month and I would not be surprised that even that 5.12% APY 5 month CD will no longer be available.

For a 10 month CD the bank offered an APY of 4.85%.

[BroDoze]

Earning 5.3%+ on cash was fun while it lasted.

[fanofbmwe46]

Originally Posted by BroDoze

Earning 5.3%+ on cash was fun while it lasted.

Helped offset inflation. What sucks though is that gain is taxable.

[BroDoze]

Yup. They’ll get their 10lbs of flesh.

[J-RO]

Its election time!!!

[Carefree]

Originally Posted by J-RO

Its election time!!!

Cackles will take the credit.

[aerobod]

Originally Posted by fanofbmwe46

Helped offset inflation. What sucks though is that gain is taxable.

Luckily in Canada we have Tax Free Savings Accounts that short or long term investments can be placed in and taken out of to avoid tax on any gains, as long as you don't exceed the account headroom on an annual basis (the Government will get nasty with the penalties if you day trade in such an account!).

[fzr100098]

Originally Posted by Ehloo

BMW is already subsidizing their current rate. sales is definitely slowing down. more m2’s sitting on the lot

Where all these M2 sitting on the lot? I only see a few

[Bret]

Originally Posted by Ronin76

Hi All,
What do you guys think?

I think it's an indication that the economy is slowing more than they expected and they want to do everything they can to help their preferred candidate get elected.

Bigger picture, it's pretty easy to justify financing a car when the financing rates are literally zero and your money in the bank is earning zero. This was the case in the recent past. Even with the current reduction, there's now still a spread of about ten percent between what you're paying and what you could be earning. That's terrible from a long-term wealth building standpoint. I think that it's best to sacrifice for your financial future by not financing cars.

[fzr100098]

Unless you can make more in the market than you you lose on the loan

Gold stocks have been great lately and I think that will continue

I will probably take out a small loan, maybe 20k - good for my credit rating

[Carefree]

Originally Posted by Bret

I think it's an indication that the economy is slowing more than they expected and they want to do everything they can to help their preferred candidate get elected.

Bigger picture, it's pretty easy to justify financing a car when the financing rates are literally zero and your money in the bank is earning zero. This was the case in the recent past. Even with the current reduction, there's now still a spread of about ten percent between what you're paying and what you could be earning. That's terrible from a long-term wealth building standpoint. I think that it's best to sacrifice for your financial future by not financing cars.

Totally agree.

I don’t finance cars but totally understand younger folks with kids, mortgage, etc. having to do it. I’m old enough to remember 3 year loans then 4 then 5….

What’s the longest term available now? Just curious.

[fzr100098]

7+

[RockCrusher]

Originally Posted by BroDoze

Earning 5.3%+ on cash was fun while it lasted.

Yep. Rather than take my RMD in kind (leaving it invested in mutual funds) I took the cash out (and paid taxes on the money) and put what was left into a CD.

Of course over the same time span while I was earning just over 5% interest in a CD money in the market (mutual funds) was earning over 17% (YTD).

[RockCrusher]

Originally Posted by Bret

I think it's an indication that the economy is slowing more than they expected and they want to do everything they can to help their preferred candidate get elected.

"and they want to do everything they can to help their preferred candidate get elected."

Agreed. And so much for the "independent" Fed...

[Bret]

Originally Posted by fzr100098

Unless you can make more in the market than you you lose on the loan

What you pay in interest is guaranteed. What you make in the market virtually never is. Playing that game isn't worth the anxiety it creates.

Gold stocks have been great lately and I think that will continue

Gold has given me the best return over the past 15 years, but it's just luck. I really consider commodities speculation rather than true investments. I'll take it though.

I will probably take out a small loan, maybe 20k - good for my credit rating

If you don't really have to take that loan, consider that you're pretty much paying interest to convince other people to loan you money so you can pay them interest.

As you can see, I have opinions and I'm pretty willing to share them. Please just ignore if you find them annoying. I just like to help when it comes to financial strategies.