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Message: <blockquote data-quote="erin8817" data-source="post: 632273" data-attributes="member: 28168">AFAIK, the 1st year will be cheap (aka no need downpayment) and the monthly installment will increase yearly.So let's "assume"1st year you pay 1,888 per month, 2nd year- 2,088 p/mo, 3rd year-2,288 p/mo.By the time you reach the last yr (assume 7th yr), you'll be paying 3,088 p/mo.  BUT you'll also need to pay a lump sum- i.e 60K for the final year.  BMW logic is that it assumes you'll sell your car by 7th yr (for at least 60K) and you'll use it to pay the lump sum.If you calculate the annualized interest rate for step-up VS normal bank loan, the step-up is more expensive.But the good thing is that you can have the option of paying less deposit.</blockquote>