Discussion
Bearing in mind the current question marks around interest rates and what a given motor may be worth in a few years what's the forum view on finance from BMW on an AUC?
1. Pay as much cash as you can up front
2. Get one of the low deposit/monthly/Gauranteed end value arrangements
3. Standard finance over 3yrs to pay off what's left after a deposit left
I'm thinking around best options...
Realistically I'd keep the car 3 years max
1. Pay as much cash as you can up front
2. Get one of the low deposit/monthly/Gauranteed end value arrangements
3. Standard finance over 3yrs to pay off what's left after a deposit left
I'm thinking around best options...
Realistically I'd keep the car 3 years max
dubbs said:
1. Pay as much cash as you can up front
2. Get one of the low deposit/monthly/Gauranteed end value arrangements
3. Standard finance over 3yrs to pay off what's left after a deposit left
Tricky one.2. Get one of the low deposit/monthly/Gauranteed end value arrangements
3. Standard finance over 3yrs to pay off what's left after a deposit left
I think all BMW finance deals are now with a GFV at the end, so because of that you want as small a deposit as possible.
The LIBOR rate is starting to drop as banks start lending to each other, I was offered 1.3% above LIBOR which has fallen from 6.3% on the 10th October to 4.2% yesterday.
To put that into perpective I paid 8.2% apr last month and could get the same deal at 5.5% if I refinanced today, which I may do as I don't pay any set up fees.
That is with Natwest through Lombard.
Now I know BMW are still at between 9 and 12% depending on the customer, so be careful.
Example...
Lombard 5.5%
£38000
£3000 deposit
£615 month over 36 months
£17000 balloon, not guaranteed.
BMW 9%
£38000
£3000 deposit
£690 month over 36 months
£17000 balloon
BMW 12%
£38000
£3000 deposit
£751 month over 36 months
£17000 balloon
Now I know people like a guaranteed final value so they can throw the keys back if there is negative equity, but if you are being offered the higher rate then just use Lombard and pay more each month meaning the final value is lower.
Lombard at 5.5% paying £750 a month means you will only owe £11k after 3 years. Now personally I would rather take the gamble as I don't think £11k is that much of a gamble, I reckon these will still be £20k+ at 3 years.
The only person that pays for the feel good effect of a GFV is you.
I think that sometimes people get hung up too much on the interest rates etc - isnt the most important thing the amount you pay each month?
Sure you want this to be as low as possible but the acid test is how much you want to pay per month. One of the things to consider about the BMW finance is that you can drive a much harder bargain on the car price as the dealer is making money from the finance.
You can't do this if you rock up with a loan from Lombard.
Unless you really want the car then a GFV is a great way of keeping your options open, and to a certain extent you have to pay a premium for this in the overall cost - afterall BMW are taking all the risk.
S
Sure you want this to be as low as possible but the acid test is how much you want to pay per month. One of the things to consider about the BMW finance is that you can drive a much harder bargain on the car price as the dealer is making money from the finance.
You can't do this if you rock up with a loan from Lombard.
Unless you really want the car then a GFV is a great way of keeping your options open, and to a certain extent you have to pay a premium for this in the overall cost - afterall BMW are taking all the risk.
S
skeeterm5 said:
I think that sometimes people get hung up too much on the interest rates etc - isnt the most important thing the amount you pay each month?
Sure you want this to be as low as possible but the acid test is how much you want to pay per month. One of the things to consider about the BMW finance is that you can drive a much harder bargain on the car price as the dealer is making money from the finance.
You can't do this if you rock up with a loan from Lombard.
Unless you really want the car then a GFV is a great way of keeping your options open, and to a certain extent you have to pay a premium for this in the overall cost - afterall BMW are taking all the risk.
S
APR is the only way to work out the true cost when using finance. Sure you want this to be as low as possible but the acid test is how much you want to pay per month. One of the things to consider about the BMW finance is that you can drive a much harder bargain on the car price as the dealer is making money from the finance.
You can't do this if you rock up with a loan from Lombard.
Unless you really want the car then a GFV is a great way of keeping your options open, and to a certain extent you have to pay a premium for this in the overall cost - afterall BMW are taking all the risk.
S
You can convince yourself it is cheaper by raising the balloon or putting more down but apr really does tell you how much the charge for borrowing is.
Apr isnt the best judge of the interest rate, it alters way too much with how long the money is borrowed over and jumps up on a pcp or lease because theirs an end payment, apr is affected by how the money is repaid so distorts if a big chunk say 30% is left till the end.
Only way to work it out is simply look at the payments each month, the doc fees and the end payment if you have one and work out exactly how much you are repaying. Its surprising how little difference the total amount payable differs for wildly varying apr's. Banks have been fiddling with APR's for years by putting payment holidays and loads of other crap in to make their rates look more favourable.
Personally in the current climate I would get something with a guaranteed end value, put down a relatively small deposit say 10% max and do it that way, if the crap hits the fan and the cars worth nowt at the end its the finance companies problem not yours and you have no negative equity.
Other way is put a decent deposit down, do it over 5 years and once you have paid half again if the crap hits the fan just hand it back to the finance company if the cars worth less, ideal way if you do high mileage.
Only way to work it out is simply look at the payments each month, the doc fees and the end payment if you have one and work out exactly how much you are repaying. Its surprising how little difference the total amount payable differs for wildly varying apr's. Banks have been fiddling with APR's for years by putting payment holidays and loads of other crap in to make their rates look more favourable.
Personally in the current climate I would get something with a guaranteed end value, put down a relatively small deposit say 10% max and do it that way, if the crap hits the fan and the cars worth nowt at the end its the finance companies problem not yours and you have no negative equity.
Other way is put a decent deposit down, do it over 5 years and once you have paid half again if the crap hits the fan just hand it back to the finance company if the cars worth less, ideal way if you do high mileage.
After_Shock said:
Apr isnt the best judge of the interest rate, it alters way too much with how long the money is borrowed over and jumps up on a pcp or lease because theirs an end payment, apr is affected by how the money is repaid so distorts if a big chunk say 30% is left till the end.
I think you are thinking of a Flat Rate, this changes depending on...how long it is over, whether you take a payment break etc. etc. APR is the amount of interest you pay annually on the existing amount of funding.
It is the only true way to compare loans.
Edited by gizlaroc on Tuesday 18th November 23:11
So,
3k down, 15k left after 3 years on a 32k purchase.
How much would that be? Think that's realistically what I'd be looking at if I want to conserve cash.
If I wanted an ealry exit clause, say at 18month, what kind of deal do need and will it negatively increase cost or do they like that sort of thing anyway to de-risk?
3k down, 15k left after 3 years on a 32k purchase.
How much would that be? Think that's realistically what I'd be looking at if I want to conserve cash.
If I wanted an ealry exit clause, say at 18month, what kind of deal do need and will it negatively increase cost or do they like that sort of thing anyway to de-risk?
http://www.dynamic-webs.co.uk/information/car_loan...
Good calculator.
I think the best you will get at the moment is a 45% balloon, that will be £14400.
Depends on the rate, if you get it down to 6% apr it will be about £515 a month.
get stitched up with BMWs current 11.9% and it will be £615 a month.
That is why getting the finance right is as important as getting a good deal on the car.
Good calculator.
I think the best you will get at the moment is a 45% balloon, that will be £14400.
Depends on the rate, if you get it down to 6% apr it will be about £515 a month.
get stitched up with BMWs current 11.9% and it will be £615 a month.
That is why getting the finance right is as important as getting a good deal on the car.
Hi,
I was looking at a used 08 e93 yesterday. While I managed 3K off of list to 33K, the finance guy wouldn't go under 5.5 flat for the PCP. I think thats around 11% apr ish. I was expecting the IR to be about 9%. He then tried to massage the monthly payments by switching from 36 to 48 months. Is the rate he offered competitive, or is there margin for improvement in there?
Thanks,
C
I was looking at a used 08 e93 yesterday. While I managed 3K off of list to 33K, the finance guy wouldn't go under 5.5 flat for the PCP. I think thats around 11% apr ish. I was expecting the IR to be about 9%. He then tried to massage the monthly payments by switching from 36 to 48 months. Is the rate he offered competitive, or is there margin for improvement in there?
Thanks,
C
Edited by contracttor on Saturday 29th November 11:15
contracttor said:
Hi,
I was looking at a used 08 e93 yesterday. While I managed 3K off of list to 33K, the finance guy wouldn't go under 5.5 flat for the PCP. I think thats around 11% apr ish. I was expecting the IR to be about 9%. He then tried to massage the monthly payments by switching from 36 to 48 months. Is the rate he offered competitive, or is there margin for improvement in there?
Thanks,
C
I just bought a Dec '06 Z4MC on HP (no balloon) and got 8% APR in the end - which was very close (within 0.2%) to the best deal I could get through anyone else, plus I have the 'protection' of handing it back after half has been paid back if I really need to.I was looking at a used 08 e93 yesterday. While I managed 3K off of list to 33K, the finance guy wouldn't go under 5.5 flat for the PCP. I think thats around 11% apr ish. I was expecting the IR to be about 9%. He then tried to massage the monthly payments by switching from 36 to 48 months. Is the rate he offered competitive, or is there margin for improvement in there?
Thanks,
C
It was £22k over 5 years and worked out at £440/month.
Edited by mmm-five on Saturday 29th November 12:02
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