It’s nearly time, M4 or M4CP, personal loan or PCP

[sbk1972]

Don't want to sound like a party pooper but Isn't this the modern world, built of image / credit. You have £5K in cash and want to borrow £25K for a 30K car. What about the servicing costs ? tyres ? Can you really afford this car ? I would also be asking, in this current uncertain climate, do you really need this car ? Is it wise to take on this level of debt ? After 6 months of owning it the shine soon dulls and you have an expensive drain sitting on your drive.

I know many people now that have stopped leases, loans and overall exposure to debt and have brought second hand cars for cash. These M4 will also deprecate further once the new models roll out, especially when BMW off deals, meaning you asset will be loosing you money, hence the phrase if it looses money lease it, if it gains money buy it.

Just buy a £5K car, have fun and limit your risk.

[Chestrockwell]

Shanksy87 said:

Chestrockwell said:

I appreciate your thoughts and tips, I think I’d much rather a loan despite PCP being easier as I feel like I have more freedom, for example, I could sell the M4 in a year or in 2 years without having to worry about equity, finance companies and final payments.

As for it being the right car for me, I mean, I don’t think it is, I’d be better off VFM wise in a 440i or even a BMW M2 however the M4 has been a dream car for me since it came out and it’s an itch I need to scratch as anything else will be unfulfilling, I don’t even think I’ll buy a performance car if I can’t get the M4!

The way I’ve justified it is that I paid £1500 initial payment on my current lease car and 390 a month, my previous car was bought via a personal loan and those repayments were 450 a month. I’ve been paying that monthly for the past 4 years so I’m used to it and it’s become a cost of life if you want to call it that.

I see the 5k deposit as if I’m buying the M4 for 3500 and as I’d be paying the same monthly payments I have been for the last 4 years, it starts to make sense. However, the reason my cap is 5k is because I intend to buy a warranty which will be about a grand for the year so while I can afford to pay extra for the competition pack, I don’t think paying more is worth it.

I can't fault your logic as I have done the same in the past, I prefer loans personally, although I have a PCP active right now as the deal was right for me. You know your financial position better than anyone.

Reference the M4 specifically, I think a warranty is always useful but don't let it lull you into thinking it covers all your costs. A major service is a grand, even if they find nothing else that needs doing and other consumables that a warranty doesn't touch can add up.

With respect to the comp pack, every review I've read suggests this is the better car and it is widely held that the later the M4 the more resolved it is. Also having worked in this industry I would strongly recommend getting as new a vehicle as you can, they are always better as every year brings improvements, many not advertised. In essence, i'm saying it is worth paying more and a few grand shouldn't really put you off.

I can afford to run the car, servicing/consumables etc, it’s affordable, I tried buying one back in 2018 and concluded that even though I can buy one, I’d still be living with parents and it would be a lot harder to save for my first property.

Now, nearly 3 years later, times have changed, I’m finally about to get onto the property ladder and the man maths finally make sense.

Regarding the servicing, what’s funny is that I lease a diesel C class, first service set me back £450, just oil service and filter, I’m quite lucky though because they topped up my windscreen washer for free!!

So, I’d happily pay an extra £550 to service a high performance car.

[Phateuk]

Personally I'd go the loan route and is what I've done many times in the past.

One thing no one seems to have mentioned (unless it goes without saying) is to wait until your house purchase has gone through, as the monthlies on the car may (probably will) have an adverse affect on your mortgage affordability.

I was in a very similar situation 5-6 years ago but with the E92 instead - was a dream car and decided to go for it. Car was high £29ks so got a £25k loan and paid the rest from savings. 6 months later we went to buy a house and the bank weren't too impressed with the debt, no real harm done but it limited the lenders available.

I overpaid the loan and now own the car outright, no monthly payments and pretty much zero depreciation now are nice

As has been said its a nice feeling knowing at any point if I needed to release the money I could've sold and paid off the loan, now i can just sell and release the cash if needed.

ETA the rate at the time was low 3's vs 9+ offered by the dealer for PCP.

Edited by Phateuk on Thursday 28th January 16:39

[Wills2]

david-j8694 said:

Shanksy87 said:

Playing devils advocate here but is this really the right car for you? Saying a £30k is within range when you have £5k in actual cash is a very modern approach to affordability. This isn't to say don't do it, as you may have allocated £5k of a much larger pot for this purpose, but it raises a question, more so given a new set of tyres and brakes will do you for at least £2k, you need to stay liquid to run an M car.

Speaking finance as I've used all available options in the past, I would lay it out as follows:

If £5k really is all or most of your available cash, go PCP as it reduces your exposure and ties the debt to the car. If things go wrong your lose the car, but also the liability.

If you're comfortable with taking all of the risk, I would get the largest and longest 0% credit card going. Typically 2 years is offered, then get a bank loan at 3-4% over a longer period to get you to where you need to be. This weights the repayments at the start of the package thus reducing the risk into the future where life is less certain, it also get you into the cheapest loan bracket. Paying >5% these days for any financial instrument is un-necessary, you just need to get creative.

Are you able to expand on this a bit please? As far as I understood it, with a PCP he's locked in for the duration of the term, unless he VTs half way through, whereas with a loan he's free to sell the car and pay off the loan if he needs to get rid of the car for some reason. I thought getting out of a PCP because "I can't afford it anymore" was quite difficult.

You can sell the car bought via a PCP as well at any time, but of course the outstanding debt against it needs to be settled as part of the transaction.

[russy01]

I’m not going to comment on your finances. But it sounds like your last car was a new PCP? So a brand new car?

Don’t be fooled by these M4’s. They are great, but if you want to drive them properly they’ll chew tyres and brakes!

I see what you’re saying ref your £3500 upgrade. But I’d want at least another £3500 sat to the side to ensure you can foot a bill when it needs it...

Also, please don’t do that loan. That’s just silly at that rate...

[Scrubs]

I love my M4 but just remember that running costs can be a fair chunk of change.

I needed new disks and pads last year front and back, and even with getting them from eBay cost me just over over 1K, saved a bit on fitting as my nephew done that.

Also had the 'big' spark plug service last year and never got much change from 1K.

If you don't have a warranty and things go wrong then factor in double the the price for a lot of parts compared to a 'normal' car. I'd deffo think about only buying AUC from BMW for that reason.

Edited by Scrubs on Thursday 28th January 23:12

[Chestrockwell]

Scrubs said:

I love my M4 but just remember that running costs can be a fair chunk of change.

I needed new disks and pads last year front and back, and even with getting them from eBay cost me just over over 1K, saved a bit on fitting as my nephew done that.

Also had the 'big' spark plug service last year and never got much change from 1K.

If you don't have a warranty and things go wrong then factor in double the the price for a lot of parts compared to a 'normal' car. I'd deffo think about only buying AUC from BMW for that reason.

Edited by Scrubs on Thursday 28th January 23:12

My lease C class first service which was an oil and filter change set me back £450 and that was after I shopped around at a few different dealers! One quotes me £520, for a big service on the M4, £1000 doesn’t seem that bad.

I will also only be buying approved used or a car with an extended warranty. What’s crazy is that hardly any of them have extended warranty! Why don’t people just extend it, I could never run a car without a warranty anymore unless it’s old and cheap. It’s just a piece of mind that I’ve become used to.

[Wills2]

I did 100k in my f80 M3 the running costs were very reasonable.

[FTW]

I’ve used personal loans in the past for freedom and flexibility. Be sure that you don’t go into negative equity though. Plot mileage vs cost for all the cars on the market and see where that puts your car after two years value wise.

Last year I settled the personal loan on my Porsche and it feels great to own it outright.

Remember VT point of a PCP is when you’ve paid 50% of the total value of the car not 50% of the payments.

[as7920]

Can't see it mentioned anywhere else but why not another PCP provider?

Charles and Dean, Magnitude Finance, Oracle Finance, Admiral or your bank? Lloyds and Halifax do good rates for existing customers.

All the above will do somewhere between 5.6% and 6.9% APR. Lloyds/Halifax go as low as 4.9%.

[Geomac79]

That’s my M4, brilliant car and sounds great for a stock car. It’s my 2nd car so I don’t do many miles in it.

I would totally recommend the convertible, this is my first and with the new M4 being a soft top I’m sure they will hold there value.

[Chestrockwell]

Geomac79 said:

That’s my M4, brilliant car and sounds great for a stock car. It’s my 2nd car so I don’t do many miles in it.

I would totally recommend the convertible, this is my first and with the new M4 being a soft top I’m sure they will hold there value.

Is that a competition pack? The convertibles are actually well within budget, M4 LCI CP’s going for 33-34 approved used and the non CP’s are even cheaper. Seeing as the convertibles have the same seats, the only thing I’d be missing in a non CP convertible would be the exhaust and after watching a few YouTube videos, they don’t sound too bad!

[Chestrockwell]

as7920 said:

Can't see it mentioned anywhere else but why not another PCP provider?

Charles and Dean, Magnitude Finance, Oracle Finance, Admiral or your bank? Lloyds and Halifax do good rates for existing customers.

All the above will do somewhere between 5.6% and 6.9% APR. Lloyds/Halifax go as low as 4.9%.

I spoke to Oracle and they offered me 6.9% for HP to borrow 28k over 5 years which sounds good and that’s what I might do, that’s if I can’t get Lloyd’s to match it as ideally I’d like a loan that isn’t tied to the car, for example, if I sold the M4 after a year without losing a lot of money, I could buy something else

[northo]

Try the Magnitude calculator - it shows a better rate than that.

[SELON]

Chestrockwell said:

Is that a competition pack? The convertibles are actually well within budget, M4 LCI CP’s going for 33-34 approved used and the non CP’s are even cheaper. Seeing as the convertibles have the same seats, the only thing I’d be missing in a non CP convertible would be the exhaust and after watching a few YouTube videos, they don’t sound too bad!

I think there are a few other differences between the LCI/non LCI versions.

Suspension and power levels and power delivery are different, I think. I’ve the LCI car and I like that. It’s still a hooligan if you press a little harder on the throttle

However, I’m pretty sure that I’d like the non-LCI version too. I’ve done the autobahn more than a few times and I like a ‘spirited drive’ too, but I doubt I’ve touched peak power very often, if ever. It’s plenty quick.

The other LCI bits like “shadow line” pack (black badge, dark grill), lights etc, I guess, can be options.

Convertibles are at a very good price point at the moment (sadly for me) but hope they firm up in the spring.

[nickfrog]

Chestrockwell said:

for a big service on the M4, £1000 doesn’t seem that bad.

I don't get why the big service (with the plugs) is that much when it's listed at £622 on the BMW site for the M2. And that's before dealer discount and supplying my own oil so closer to £500. Perhaps it is because my car is 4 years old.

The other thing of a post April 2017 car is that the tax will be closer to £500 for the first 5 (6?) years rather than £300.

That's one rear tyre per year saved

If noise is important then perhaps consider an original M2 with the (heavily enhanced) N55. I know you prefer a M4 but perhaps a quick M2 test drive (whenever possible) might change your views (it's a better steer too).

[nickfrog]

sbk1972 said:

Don't want to sound like a party pooper but Isn't this the modern world, built of image / credit.
(...)
I know many people now that have stopped leases, loans and overall exposure to debt and have bought second hand cars

There has always been debt idiots. I think your view is a little simplistic though. I looked at second hand for the family car but the delta in depreciation/warranty/repair/consumables vs a £200 amortised lease deal (minus tax and opportunity cost) is ridiculously small, if not negative in some cases.

[Pioneer]

Infotainment screen went to touch as well late 2017 early 2018. Can't remember exactly when. I know ours was the last mth to have the non-touch screen. Don't think it was part of the LCI though

[Soloman Dodd]

Chestrockwell said:

Now, nearly 3 years later, times have changed, I’m finally about to get onto the property ladder and the man maths finally make sense.

That alone should be your Number One priority.

A roof over your head is more important than a set of shiny wheels under your arse.

Get the car later, when you know who your neighbours are.

[Chestrockwell]

Soloman Dodd said:

That alone should be your Number One priority.

A roof over your head is more important than a set of shiny wheels under your arse.

Get the car later, when you know who your neighbours are.

Have you been reading this thread? The plan is to buy the car after I move in