Am I being ripped off with this PCP scheme from BMW?

[chrisgunn]

"Hi everyone UPDATE!

BMW came back to me with a different offer..magically?

9.7% apr..better than the bank was offering, strange a? after multiple calls they lowered it

anyways the game isn't over. I have a friend involved who works in finance. He will be coming with me this week for advice and some help to bring down the deal even more as they have added all the extras on..insurance, paint protection etc, things I don't need

anyways if all goes to plan and they let me remove it and keep to same rate it will be with the new calculations below.

2k up front deposit , £214 a month x 36 , balloon payment of £8351(optional payment) totalling at the end = £18055 for a £15890 car on a medium size credit rating of mine

This can work out cheaper if they lower the apr even more

will keep you posted smile"




I decided to buy a car on PCP at the weekend, I will later on in the week go and collect the car. However the details I've been given seem a bit off.

The car is worth £15,890 , I put a deposit down of £2000 (£1000 being a part exchange of my vehicle)
The monthly payments are £323 for the next 3 years and this is for a 13 plate BMW 1 series 116i which only has 10,000 miles on the clock.more spec in the link at the bottom of this post.

Anyways the balloon payment also known as the Guranteed Future Value, is set at just over £8000 , meaning
if I was to keep the car(which I don't plan to) but let's say I did it would cost me a further £8000.

Meaning in total the monthly payments + the deposit + the GFV = £21,600ish

This is over £5000 more?

The finance taken out is at 7.45% on pcp

Anyways is this correct, or seem correct to everyone thanks Chris

The only win I see in this is the monthly payments in the short term is cheaper than a standard loan.

http://www.sytner.co.uk/bmw/search/bmw-1-series-ha...

Edited by chrisgunn on Monday 19th January 00:26

Edited by chrisgunn on Wednesday 21st January 12:55

[BritishRacinGrin]

Are you kidding me? Are people really spending 22k on second hand 1.6 litre hatchbacks?

[Pommygranite]

BritishRacinGrin said:

Are you kidding me? Are people really spending 22k on second hand 1.6 litre hatchbacks?

Don't be a tit - the guy just wants views on his finance deal not a critique on his car.

[Matt UK]

Seems madness - based on those numbers you are agreeing to pay £13,628 over 3 years to rent a £15,890 car you will never own.

What exactly is the advantage of this PCP? (Genuine question, I'm not an expert)

Would chopping your car in at WBAC and taking a loan out for £15k really increase your monthly payments by much?

A quick google and First Direct suggest
£15k loan
36 Monthly repayments of £442.00
Interest rate 3.9% p.a. (fixed)Representative 3.9% APR
Total repayable is £15,911.88

Edited by Matt UK on Monday 19th January 00:35

[BritishRacinGrin]

If you're determined to blow as much cash as possible on a base model 1-series you can buy a brand new one for two grand less than you're proposing to spend?

[McSam]

Matt UK said:

Seems madness - based on those numbers you are agreeing to pay £13,628 over 3 years to rent a £15,890 car you will never own.

What exactly is the advantage of this PCP? (Genuine question, I'm not an expert)

Would chopping your car in at WBAC and taking a loan out for £15k really increase your monthly payments by much?

My thoughts exactly. Unless you're an absurd risk, which I presume if offered 7.45% APR you're not, this deal cannot be the most efficient way to "buy" this car.

Mental to dispose of almost its entire current value and then just give it away after three years.

I have little experience of these schemes (for obvious reasons), but I can't see how the payments are worked out either. Seems you're borrowing £5,890, how the fk that ends up at £323 x 36 I have no idea.

[greggy50]

This sounds a serrious rip off

Why leave a £2k deposit before checking the financial stuff however? Bet the dealer is laughing to the bank

Would be better to get a bank loan and just buy the car as probably cost you £50 extra a month or so but actually have a £7/8k asset at the end of 3 years rather than sweet fa

[speedking31]

Don't know the exact vehicle details, but using the BMW online calculator here it looks like you could get a new car cheaper

[chrisgunn]

Just to let everyone know I only left a £500 deposit I have not signed anything as of yet, the £500 is just to reserve the car.
So thankfully only verbally left a desposit of £2000 not written

Edited by chrisgunn on Monday 19th January 00:52

[james28]

They get you to leave a deposit on car to reserve it incase anyone else wants it so they claim.
Your finance sounds terrible i recently got offered a 9000 loan from car finance company for 215 a month over 4 years so at 3%

[chrisgunn]

Basically they've taken out a £14,000 loan for me at 7.5% with a balloon payment of £8000 at the end. These figures don't make sense to me at all, maybe is it worth just buying the car on normal finance? Sainsburys offers 3.7%

[james28]

You really dont need an answer to that if you qualify for a bank loan then thats the best and cheapest route to take ?

[BritishRacinGrin]

Or see if anybody has a 0% finance deal on a new 1-series? No idea if BMW ever offer such a deal but if so, 1-series start at less than 20k. Alternatively, buy a car you can actually afford?

[jw673]

chrisgunn said:

I decided to buy a car on PCP at the weekend, I will later on in the week go and collect the car. However the details I've been given seem a bit off.

The car is worth £15,890 , I put a deposit down of £2000 (£1000 being a part exchange of my vehicle)
The monthly payments are £323 for the next 3 years and this is for a 13 plate BMW 1 series 116i which only has 10,000 miles on the clock.more spec in the link at the bottom of this post.

Anyways the balloon payment also known as the Guaranteed Future Value, is set at just over £8000 , meaning
if I was to keep the car(which I don't plan to) but let's say I did it would cost me a further £8000.

Meaning in total the monthly payments + the deposit + the GFV = £21,600ish

This is over £5000 more?

The finance taken out is at 7.45% on pcp

I assume "7.45%" was quoted verbally by the salesperson? and it wasn't followed by "APR"?

On the figures quoted I believe that to be ~18% APR - which is the reason it is so expensive.

1 Series 3 Door Retail Offers

1 Series 5 Door Retail Offers

Whilst it is true that a new 1 series PCP is cheaper (see above links) - this is on the basis of obtaining the rate quoted on the site (6.4% APR). If they've offered you ~18% APR, which even for used car PCP is very high, I guess you may not have the best credit rating?

Either that or they're pulling your pants down.

[h0b0]

Look at lease deals. A 116 5 door will be 700 down and 225 a month for 8k miles. This is the first deal I saw so will not be the best

[chrisgunn]

Would it be worth applying for a traditional loan at 3.6% apr

[Matt UK]

chrisgunn said:

Would it be worth applying for a traditional loan at 3.6% apr

I think it might be...

[ging84]

they get you on the flat interest rates
7.5% means 7.5% on top for each year, so 7.5% x 3 years means 22.5% of the initial amount borrowed is what you pay in interest

the apr turns out to be a lot more, but it seem like 7.5% isn't even right for a flat rate, given you're paying about £5k to borrow £13k for 3 years
seems more like about 13%, the apr will be even higher

[b0rk]

The rate is 18% APR the dealer has probably quoted "flat" interest, at 7.8% APR you'd be paying £236 per month or £3,456 less over the term.

Buying new would be cheaper BMW are currently offering manufacturers and centre contributions on 1 series, 6.4% APR (representative) so 116i 5dr with no options would £340 per month if you put £1,000 in at the outset either cash or P/X. You can incidentally lease a 116i on a 36 month term for less than the deal you've been quoted.

[ging84]

apr of 17% comes out as £323.33 per month

i still don't see how it amounts to 7.5% even at a flat rate
seems like even the flat rate is actually much higher than 7.5%