Thoughts on this M4 PCP deal?
Discussion
Hello all -
New to PCP and found an M4 that ticks all my 'must have' boxes, car is a 2015 model priced at £41,995 at a main BMW dealer.
Went in looking for at least 8K for my car (which they agreed to) plus adding another 7K to make a 15K deposit as was wanting monthlies of around £300.
The BMW configurator had an APR of 7.9%, which gave me monthlies based on the above of £353.
Managed to haggle a bit (which I'm hopeless at) and got him down to £320 a month. Unsure if he took money off car price or adjusted down the
APR.
Is 7.9% (or slightly below) is a decent rate for a BMW main dealer? They usually seem to have a standard rate of 10.9% on used cars.
Need to call the guy again tomorrow, but thinking of saying I'm not going above my stated £300 a month original target. He seemed pretty adamant that the £320 was their best deal.
Any advice/abuse appreciated..
New to PCP and found an M4 that ticks all my 'must have' boxes, car is a 2015 model priced at £41,995 at a main BMW dealer.
Went in looking for at least 8K for my car (which they agreed to) plus adding another 7K to make a 15K deposit as was wanting monthlies of around £300.
The BMW configurator had an APR of 7.9%, which gave me monthlies based on the above of £353.
Managed to haggle a bit (which I'm hopeless at) and got him down to £320 a month. Unsure if he took money off car price or adjusted down the
APR.
Is 7.9% (or slightly below) is a decent rate for a BMW main dealer? They usually seem to have a standard rate of 10.9% on used cars.
Need to call the guy again tomorrow, but thinking of saying I'm not going above my stated £300 a month original target. He seemed pretty adamant that the £320 was their best deal.
Any advice/abuse appreciated..
t APR, absolutely sNo PCP expert but to get a good interest rate on borrowing money you would need a bank loan not PCP for the whole amount, issue here is too borrow 27k for £300 a month would be 7 1/2 to 8 years.
What's the end of term value they are putting on car, what's your plan hand back, or get loan to cover this?
You may even find the cost of a new M4 isn't alot different monthly at least as they will do a better rate on a new car.
What's the end of term value they are putting on car, what's your plan hand back, or get loan to cover this?
You may even find the cost of a new M4 isn't alot different monthly at least as they will do a better rate on a new car.
mikey P 500 said:
No PCP expert but to get a good interest rate on borrowing money you would need a bank loan not PCP for the whole amount, issue here is too borrow 27k for £300 a month would be 7 1/2 to 8 years.
What's the end of term value they are putting on car, what's your plan hand back, or get loan to cover this?
You may even find the cost of a new M4 isn't alot different monthly at least as they will do a better rate on a new car.
Cheers for the replies.What's the end of term value they are putting on car, what's your plan hand back, or get loan to cover this?
You may even find the cost of a new M4 isn't alot different monthly at least as they will do a better rate on a new car.
I would be looking to hand back after the 4 year period. The GF Value they set is at £17.5K I do realise tho that PCP would be the expensive way to make a purchase beyond the set term if I wanted to buy it. My own financial situation just now means that I have 7K available (plus my own paid off car) to use and the lower monthlies would suit me better. Certainly saves a few quid over the term having a larger PCP deposit.
Not sure how far to try and squeeze them hence the APR question. Thinking of calling back and saying get the monthlies to £300 or i'll just leave it. Don't want to shoot myself in the foot either if they don't budge!
3% - 3.5% Apr is easily achievable via banks. I bought my m135i via bmw at 8.5%, I was using taking there finace as a bargaining tool. Within 28 days I paid it all off (£15k) with a first direct loan at 3.2%. Saved over 2k in interest charges by using a different loan provider over bmw finance. Although I am not on a pcp deal (hpi), I have no ballon payment at the end.
Edited to include hip not pcp statement.
Edited to include hip not pcp statement.
Markbarry1977 said:
3% - 3.5% Apr is easily achievable via banks. I bought my m135i via bmw at 8.5%, I was using taking there finace as a bargaining tool. Within 28 days I paid it all off (£15k) with a first direct loan at 3.2%. Saved over 2k in interest charges by using a different loan provider over bmw finance.
Is that a PCP or straight up loan? I can certainly get a loan of 25K at around 2.8% over 60 months. Problem is the monthly payments are around £460 a month compared to the £300 of the PCP.EDIT: Just seen your edit about it being HP and not PCP
That deal is not too shabby , yes you can get a loan for 3-3.5% Apr but that won't have the convenience and low monthlies of a PCP though.
Having said that I strongly urge you to think about what you will do when the four years have passed, you have a nice £15k deposit now but the equity in the car won't be anything like that much so to get in to a similar car next time around you will need either another bundle of cash or be prepared to stomach much higher monthlies.
Having said that I strongly urge you to think about what you will do when the four years have passed, you have a nice £15k deposit now but the equity in the car won't be anything like that much so to get in to a similar car next time around you will need either another bundle of cash or be prepared to stomach much higher monthlies.
27k personal loan over 7 years, 3.3% APR, total interest if you let it run to the end of the seven year term (which you're not intending to, so total interest will be less because of the rebate you'll get) £3200, £360 monthly.
Four year PCP at BMW's rates costs you £6800 in interest over the four years.
It's a no-brainer, the PCP costs you at least an extra £3600 in interest, probably over £4k once the rebate on the personal loan is taken into account. The extra finance payments on the personal loan over the four years (320 vs 360 p/m) come to just under two grand.
Yes, slightly higher monthlies but it costs you two grand less overall, just for financing the car a different way.
There's another benefit too, at the end of the four year PCP you need to pay £17k (or hand the car back) to finish the finance. At the end of four years if you use the personal loan you need to find less than £10k - so you should have a lot more equity in the car than if you PCP'd it.
The downside is that you don't have a guaranteed future value, so if somehow your M3 is worth less than ten grand four years from now you're in negative equity, but the chance of that is tiny.
This obviously assumes you have a good credit rating.
Four year PCP at BMW's rates costs you £6800 in interest over the four years.
It's a no-brainer, the PCP costs you at least an extra £3600 in interest, probably over £4k once the rebate on the personal loan is taken into account. The extra finance payments on the personal loan over the four years (320 vs 360 p/m) come to just under two grand.
Yes, slightly higher monthlies but it costs you two grand less overall, just for financing the car a different way.
There's another benefit too, at the end of the four year PCP you need to pay £17k (or hand the car back) to finish the finance. At the end of four years if you use the personal loan you need to find less than £10k - so you should have a lot more equity in the car than if you PCP'd it.
The downside is that you don't have a guaranteed future value, so if somehow your M3 is worth less than ten grand four years from now you're in negative equity, but the chance of that is tiny.
This obviously assumes you have a good credit rating.
What would be your plan after the 4 years, hand the car back or pay the GFV (sorry if you've already answered that and I missed it)? That's the thing I don't get about PCP, surely you wouldn't be happy handing the car back and losing the £15k deposit you put in, that's a huge sum of money!
I thought that APR you've been quoted isn't that bad for a used car. The rate for used are never as good as a personal loan or the APR on a new car...but other peeps here saying 7.9 is terrible (confusing)!!!
If I had 'only had' £300 a month for a car I'm not sure I'm be in the market for a 40k car. Think I'd be looking £30k and under and get a more fitting deal. C63 would do it
I thought that APR you've been quoted isn't that bad for a used car. The rate for used are never as good as a personal loan or the APR on a new car...but other peeps here saying 7.9 is terrible (confusing)!!!
If I had 'only had' £300 a month for a car I'm not sure I'm be in the market for a 40k car. Think I'd be looking £30k and under and get a more fitting deal. C63 would do it
If you get a Personal Loan then you'll be paying around 3% you don't get a GFV but to be honest your car will be worth roughly the GFV anyway as they normally steer towards the low number rather than the higher one but if it's worth less & it will only be slightly less does that make the extra 4% APR worthwhile?
Only you can decide this one OP.
Forgot to add that if you're getting a significant dealer contribution then go with their finance for 6 months then get a bank loan.
Only you can decide this one OP.
Forgot to add that if you're getting a significant dealer contribution then go with their finance for 6 months then get a bank loan.
Edited by ZX10R NIN on Sunday 6th August 10:49
Scrubs said:
Unsure if he took money off car price or adjusted down the APR.
thinking of saying I'm not going above my stated £300 a month original target. He seemed pretty adamant that the £320 was their best deal.
Any advice/abuse appreciated.
Assuming the dealer plays only with the APR and all else remains the same, getting to a £300 a month is achieved with an APR of 5.5%thinking of saying I'm not going above my stated £300 a month original target. He seemed pretty adamant that the £320 was their best deal.
Any advice/abuse appreciated.
Or, It's also achievable if they keep the same interest rate and reduce the price by £1,895.
Or, change nothing else except change the GFV to £20,100.
Or, adjust the PCP period to over 5 years, and increase the GFV to £18,000 (unlikely!).
HIAO said:
Assuming the dealer plays only with the APR and all else remains the same, getting to a £300 a month is achieved with an APR of 5.5%
Or, It's also achievable if they keep the same interest rate and reduce the price by £1,895.
Or, change nothing else except change the GFV to £20,100.
Or, adjust the PCP period to over 5 years, and increase the GFV to £18,000 (unlikely!).
Thanks for that info.Or, It's also achievable if they keep the same interest rate and reduce the price by £1,895.
Or, change nothing else except change the GFV to £20,100.
Or, adjust the PCP period to over 5 years, and increase the GFV to £18,000 (unlikely!).
I've still been dithering over the price all morning and just got a call from dealer to say someone has came in and bought it. That's what I get for being so indecisive I suppose. Oh well, what's for you won't go by you etc. The hunt goes on. Cheers for the replies.
mikey P 500 said:
In your position I would prob set my budget for around 30k as with your deposit and £320 a month over 4 years you could own the car outright at the end and not need to hand back at 4 yrs. I'm sure there are plenty of nice cars for that budget anyway.
That's what I said!!BUG4LIFE said:
mikey P 500 said:
In your position I would prob set my budget for around 30k as with your deposit and £320 a month over 4 years you could own the car outright at the end and not need to hand back at 4 yrs. I'm sure there are plenty of nice cars for that budget anyway.
That's what I said!!That would make far more sense.
This seems like a very expensive way to drive about in a used BMW for 4 years - £15,000 deposit + £320 a month x 48 = £30,360 with heading towards £20K still owed at the end of it.
I'd be looking for a V8 M3 at around £25-30K and taking out a bank loan for the £15K OR even borrow £20K and go for an early M4 at around the £35K mark and borrow £20K over 5 years.
Edited by daemon on Monday 7th August 13:17
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