Best Way To Finance An E90 M3...?

[M3Driver]

I've got an E46 M3 at the moment, and after a couple of test drives, I've decided that an E90 M3 will be my next car.

I realise this maybe isn't something that people normally discuss on forums. I'm just wondering what the best option is to finance something like this?

I've specced up my car on the bmw uk configurator, E90 Interlagos Blue saloon (Dct, edc, 19" wheels, bluetooth, logic 7 etc.) by the time I'd finished it came out at £62,500.

My E46 is probably worth about £12,500. So that leaves about £50k to finance. In the past I've only ever taken out a straightforward bank loan on my cars. I've liked the fact that I owned the car once I had paid it off. I think I would keep the car for at least 5 years, possibly longer.

I noticed that Nationwide personal loans came out top in the comparison tables but the maximum amount available was £25k.

Never really got involved with leases, hire purchases, etc. so don't really know anything about them. I'll be doing about 25k miles a year in it anyway. This is not related to business, so I can't put anything through in order to save VAT or anything.

I was curious to find out what other people would recommend, and what my options are. I would consider a used one if I could get a year or two old one with most of my options, but even then, it would be at least £35k, so I'm looking at getting finance for between £22,500 and £50,000. What is the best way to go about this?

[justin220]

Finance it straight through the dealer will be the easiest way.

I take it you would put your M3 down as a deposit (plus cash?!). Either way, you'll then finance the remaining £50k or so, over 3 or 4 years.

Most of them will offer a balloon payment at the end to keep the monthly payments lower.

[BMWBen]

M3Driver said:

I've got an E46 M3 at the moment, and after a couple of test drives, I've decided that an E90 M3 will be my next car.

I realise this maybe isn't something that people normally discuss on forums. I'm just wondering what the best option is to finance something like this?

I've specced up my car on the bmw uk configurator, E90 Interlagos Blue saloon (Dct, edc, 19" wheels, bluetooth, logic 7 etc.) by the time I'd finished it came out at £62,500.

My E46 is probably worth about £12,500. So that leaves about £50k to finance. In the past I've only ever taken out a straightforward bank loan on my cars. I've liked the fact that I owned the car once I had paid it off. I think I would keep the car for at least 5 years, possibly longer.

I noticed that Nationwide personal loans came out top in the comparison tables but the maximum amount available was £25k.

Never really got involved with leases, hire purchases, etc. so don't really know anything about them. I'll be doing about 25k miles a year in it anyway. This is not related to business, so I can't put anything through in order to save VAT or anything.

I was curious to find out what other people would recommend, and what my options are. I would consider a used one if I could get a year or two old one with most of my options, but even then, it would be at least £35k, so I'm looking at getting finance for between £22,500 and £50,000. What is the best way to go about this?

25k miles a year in an M3? Damn that'll be fun :P You sure it's the best idea though? If you're going to be getting rid after 3 years it'll have done 75k miles, and will be worth absolutely jack all/nobody will buy it. For that reason I think you'll struggle to find finance that will allow you to do those miles...

[PIGINAWIG]

M3 buyer:

Assuming you take out the whole 50 thousand in finance and finance it over 60 months, you'll be looking at approx £1000 a month in repayments - maybe slightly less.

When the 5 years is up, you'll have paid approx 70 thousand for your car - which, after 5 years, will be worth approx 20 - 25 thousand (just guessing here!)

That means that you will be paying a thousand a month and losing a thousand a month!

Each to their own and all that - but that's one hell of a hit!

Edited to add: @ 25k miles per annum, your car will be worth a lot less and you'll have spent upwartds of a further 10 thousand on servicing/brakes/tyres/insurance/tax....etc...!!

Edited by PIGINAWIG on Monday 9th August 07:48

[john_p]

You can do a "balanced payments" or "HP with balloon" purchase, which is where you defer, say, £25k of payment until you sell the car (but continue to pay interest on the full amount)

A bit like a more hardcore PCP. (Except without a guaranteed value of the car at the end!)

[kambites]

I guess it depends on how much you can afford to pay back a month and whether you'd be happy to essentially be forced out of the car at the end of the lease or would rather decide when to get rid of it yourself but have to go through the hassle of selling it.

[daemon]

PIGINAWIG said:

M3 buyer:

Assuming you take out the whole 50 thousand in finance and finance it over 60 months, you'll be looking at approx £1000 a month in repayments - maybe slightly less.

When the 5 years is up, you'll have paid approx 70 thousand for your car - which, after 5 years, will be worth approx 20 - 25 thousand (just guessing here!)

That means that you will be paying a thousand a month and losing a thousand a month!

Your calculations are wrong in the above scenario.

The outgoings would be £1000 a month for the finance * 60 = £60K.
Resale value of car in 5 years = £20K.
Cost to buy over 60 months - resale value = £40K.

Therefore if the O/P were to sell it after five years, then it would have cost him £40,000/60 = £666 a month including interest and depreciation.

Edited by daemon on Monday 9th August 09:13

[Deva Link]

john_p said:

You can do a "balanced payments" or "HP with balloon" purchase, which is where you defer, say, £25k of payment until you sell the car (but continue to pay interest on the full amount)

A bit like a more hardcore PCP. (Except without a guaranteed value of the car at the end!)

...except that, for 25K miles per year on an M3, the figures would be immense.

Make sure the option to purchase is available if you go down this route - A standard Personal Lease would be no good as the car has to be handed back at the end.

[daemon]

Deva Link said:

john_p said:

You can do a "balanced payments" or "HP with balloon" purchase, which is where you defer, say, £25k of payment until you sell the car (but continue to pay interest on the full amount)

A bit like a more hardcore PCP. (Except without a guaranteed value of the car at the end!)

...except that, for 25K miles per year on an M3, the figures would be immense.

Make sure the option to purchase is available if you go down this route - A standard Personal Lease would be no good as the car has to be handed back at the end.

Actually theres not a massive difference. Just plugged in 6000 miles on this M3

http://www.bmw.co.uk/bmwuk/auc/car_details/0,,1260...

and the payment comes out at £999.84 with £5K deposit.

34 monthly payments of £999.84
First monthly payment: £1,173.84
Optional final payment: £22,303.95
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £62,472.35
Contract mileage: 18,000
Excess mileage charge (per mile): 13.4p
Typical 12.9% APR

Up that to 25K miles and it 'only' goes up to £1128.77

34 monthly payments of £1,128.77
First monthly payment: £1,302.77
Optional final payment: £16,862.48
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £61,543.43
Contract mileage: 75,000
Excess mileage charge (per mile): 11.3p
Typical 12.9% APR

Edited by daemon on Monday 9th August 09:18

[Deva Link]

Fair enough. Actually, if the OP is pretty certain he's going to keep the car, then on a PCP it makes no odds - you pnly pay the excess mileage charge if you hand the car back.

I think I was more thinking of the 5 year mileage - once the car is over 100K miles that must mess up the value big-time, especially as warranties become difficult at high mileage.

[Pugland53]

I have been looking at these myself as my next car, you can pick up good examples for less than 35k. These cars lose a lot of money in the first couple of years so buying 2 or 3 year old makes sense, as long as you get the BMW warranty. If you sell your car and put a couple of grand down you could get a loan for 20k or so with lower repayments which you could own after the loan period with no balloon payment.

[edo]

fk a duck. £62k on an Em Free? I'd be expecting a decent discount off that.

[TooLateForAName]

daemon said:

Actually theres not a massive difference. Just plugged in 6000 miles on this M3

http://www.bmw.co.uk/bmwuk/auc/car_details/0,,1260...

and the payment comes out at £999.84 with £5K deposit.

34 monthly payments of £999.84
First monthly payment: £1,173.84
Optional final payment: £22,303.95
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £62,472.35
Contract mileage: 18,000
Excess mileage charge (per mile): 13.4p
Typical 12.9% APR

Up that to 25K miles and it 'only' goes up to £1128.77

34 monthly payments of £1,128.77
First monthly payment: £1,302.77
Optional final payment: £16,862.48
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £61,543.43
Contract mileage: 75,000
Excess mileage charge (per mile): 11.3p
Typical 12.9% APR

So, in total it is around £1K cheaper to buy on the basis of the higher miles?

Still paying £11K in interest over the 3 years though.

[KenBlocksPants]

Pugland53 said:

I have been looking at these myself as my next car, you can pick up good examples for less than 35k. These cars lose a lot of money in the first couple of years so buying 2 or 3 year old makes sense, as long as you get the BMW warranty. If you sell your car and put a couple of grand down you could get a loan for 20k or so with lower repayments which you could own after the loan period with no balloon payment.

+1 this is what I would be doing.

Again if the OP can afford the monthlies then fair enough. But the smart money is on second hand in this example.

[daemon]

TooLateForAName said:

daemon said:

Actually theres not a massive difference. Just plugged in 6000 miles on this M3

http://www.bmw.co.uk/bmwuk/auc/car_details/0,,1260...

and the payment comes out at £999.84 with £5K deposit.

34 monthly payments of £999.84
First monthly payment: £1,173.84
Optional final payment: £22,303.95
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £62,472.35
Contract mileage: 18,000
Excess mileage charge (per mile): 13.4p
Typical 12.9% APR

Up that to 25K miles and it 'only' goes up to £1128.77

34 monthly payments of £1,128.77
First monthly payment: £1,302.77
Optional final payment: £16,862.48
Cash price: £49,995.00
Deposit: £5,000.00
Amount of credit: £44,995.00
Total amount payable: £61,543.43
Contract mileage: 75,000
Excess mileage charge (per mile): 11.3p
Typical 12.9% APR

So, in total it is around £1K cheaper to buy on the basis of the higher miles?

Still paying £11K in interest over the 3 years though.

Yeah thats from BMW's site. Not sure how that works out - almost seems a bargain!

[Big E 118]

A bit O/T but I've been looking at E90 M3's (among other cars) recently. You can get a low mileage, FSH, approved used M3 to your spec a couple of years old for approx £45k. Let someone else take that nearly £20k hit for driving it off the forecourt. Especially if you're going to do such a high mileage you're not going to get much back when you go to sell.

I'd love to buy a new one but I'd love to have an extra £20k in my pocket more!

[BlueMR2]

daemon said:

PIGINAWIG said:

M3 buyer:

Assuming you take out the whole 50 thousand in finance and finance it over 60 months, you'll be looking at approx £1000 a month in repayments - maybe slightly less.

When the 5 years is up, you'll have paid approx 70 thousand for your car - which, after 5 years, will be worth approx 20 - 25 thousand (just guessing here!)

That means that you will be paying a thousand a month and losing a thousand a month!

Your calculations are wrong in the above scenario.

The outgoings would be £1000 a month for the finance * 60 = £60K.
+£12,500 deposit
Resale value of car in 5 years = £20K.
Cost to buy over 60 months - resale value = £52.500K.

Therefore if the O/P were to sell it after five years, then it would have cost him £52.500/60 = £875 a month including interest and depreciation.

[jatinder]

Pugland53 said:

I have been looking at these myself as my next car, you can pick up good examples for less than 35k. These cars lose a lot of money in the first couple of years so buying 2 or 3 year old makes sense, as long as you get the BMW warranty. If you sell your car and put a couple of grand down you could get a loan for 20k or so with lower repayments which you could own after the loan period with no balloon payment.

I agree this is a better idea.

[Deva Link]

TooLateForAName said:

So, in total it is around £1K cheaper to buy on the basis of the higher miles?

That does look odd at first glance, but the higher monthly payments mean the amount owed is decreasing faster, therefore the cost of interest is lower.

If the OP has to have some kind of finance, then there's some value in the higher mileage PCP deal as it puts a floor in the residual value (albeit a horrible one) and offers the chance to just walk away, if desired.

[PIGINAWIG]

BlueMR2 said:

daemon said:

PIGINAWIG said:

M3 buyer:

Assuming you take out the whole 50 thousand in finance and finance it over 60 months, you'll be looking at approx £1000 a month in repayments - maybe slightly less.

When the 5 years is up, you'll have paid approx 70 thousand for your car - which, after 5 years, will be worth approx 20 - 25 thousand (just guessing here!)

That means that you will be paying a thousand a month and losing a thousand a month!

Your calculations are wrong in the above scenario.

The outgoings would be £1000 a month for the finance * 60 = £60K.
+£12,500 deposit
Resale value of car in 5 years = £20K.
Cost to buy over 60 months - resale value = £52.500K.

Therefore if the O/P were to sell it after five years, then it would have cost him £52.500/60 = £875 a month including interest and depreciation.

Daemon - I hope you're not an accountant/car dealer......