Negotiating PCP

[XJ75]

Has anyone had any success with negotiating the PCP interest rate?

BMW are currently quoting 5.9% and Audi are quoting 4.9% for the X1 and Q3 respectively. I'm wondering if BMW are likely to come down to match Audi?

Obviously I'll ask the question but wanted to know if anyone had success with this kind of thing?

[Stormfly1985]

You should look at the overall cost of the deal - the APR is only one piece of the puzzle.

[XJ75]

Yeh I've already negotiated the car price down quite a lot, and the balloon payment is already pretty reasonable (IMO), so I think the interest rate is the only thing left to try and negotiate on.

[Butter Face]

Not that likely. The low rate deals are normally set by the finance house and a deviation from that rate costs a subsidy which dealers don’t like.

Work out the difference the 1% makes and ask for a bit more money off.

[Rubensolo]

My understanding is that the APR is fixed and non negotiable but I could be wrong.

[SteBrown91]

BMW negotiate on used finance apr but not new as that is set by BMW FS as a national deal

[Rubensolo]

I was thinking of buying a 2nd hand BMW and the dealer mentioned that any vehicle older than 3 months had to be given the 10% APR.

[steve-5snwi]

They have to give a representative figure, however most main dealers will move from the 10% figure you just have to ask. which i guess applies to the 5.9%, just ask them to match Audis 4.9 and see what they say.

[XJ75]

I asked....they said no.

[XJ75]

Two separate dealers recommended that if I wanted the car for 3 years it's better to get a 4 year PCP and give the car back after 3 years as the monthly payments will be lower than 3 year PCP. My brain's a bit slow today, there must be a catch here surely?

[Mandat]

XJ75 said:

Two separate dealers recommended that if I wanted the car for 3 years it's better to get a 4 year PCP and give the car back after 3 years as the monthly payments will be lower than 3 year PCP. My brain's a bit slow today, there must be a catch here surely?

You'll need to do the sums, but presumably you would have a lower monthly payment but on the back of that you'll pay more interest overall.

[Dan W.]

XJ75 said:

Has anyone had any success with negotiating the PCP interest rate?

BMW are currently quoting 5.9% and Audi are quoting 4.9% for the X1 and Q3 respectively. I'm wondering if BMW are likely to come down to match Audi?

Obviously I'll ask the question but wanted to know if anyone had success with this kind of thing?

Being a new car, its unlikely the pcp rate will be changed its dictated by the manufacturer nothing the dealer can do on it.
Used cars the dealer can do what rate they like.

[mabosh]

XJ75 said:

Two separate dealers recommended that if I wanted the car for 3 years it's better to get a 4 year PCP and give the car back after 3 years as the monthly payments will be lower than 3 year PCP. My brain's a bit slow today, there must be a catch here surely?

It will very much depend on the amount of deposit and the balloon payment. Many four year PCPs won't be in a break-even VT position until 3.5 years.

[Mandat]

mabosh said:

It will very much depend on the amount of deposit and the balloon payment. Many four year PCPs won't be in a break-even VT position until 3.5 years.

The VT point is not all that relevant, since you can trade in the car at any point in time that you want to.

But you are right that this is all very much dependant on the combination of deposit and GFV amounts.

[Phleaser]

Rubensolo said:

I was thinking of buying a 2nd hand BMW and the dealer mentioned that any vehicle older than 3 months had to be given the 10% APR.

The Mrs recently bought a used Mini (BMW Financial Services).
Dealer would not budge from 10.9% APR.

So we asked a finance broker (Oracle) to give us their deal on the same car - 7.9% APR.
I told the dealer, and within an hour they adjusted it to 6.9%.... "for month end/twisting my arm/we made no money etc" kick and screams from the dealer.

[Rubensolo]

Phleaser said:

The Mrs recently bought a used Mini (BMW Financial Services).
Dealer would not budge from 10.9% APR.

So we asked a finance broker (Oracle) to give us their deal on the same car - 7.9% APR.
I told the dealer, and within an hour they adjusted it to 6.9%.... "for month end/twisting my arm/we made no money etc" kick and screams from the dealer.

Wouldn’t a personal loan be more cost effective? 3% for up to £30 000 with first direct. Any benefits of choosing BMW finance services? 10.9% APR is just crazy considering interest rates everywhere are so low.

[gazza5]

my last car and this was some years ago, I took the dealer finance so got extra money off, refinanced it a month later with a loan from sainsbury at 3.5% (at the time) - worked out cheaper by about £20 a month.

Only good thing about getting the finance through BMWFS on the car is its secured on the car, a sainsburys loan for example isn't.

[gl20]

Mandat said:

XJ75 said:

Two separate dealers recommended that if I wanted the car for 3 years it's better to get a 4 year PCP and give the car back after 3 years as the monthly payments will be lower than 3 year PCP. My brain's a bit slow today, there must be a catch here surely?

You'll need to do the sums, but presumably you would have a lower monthly payment but on the back of that you'll pay more interest overall.

This. Since you're paying the loan off slower than if you went for 3 years your month end loan at any point is higher therefore accruing more interest. How you will feel this is that the difference in equity at the end will be greater than the total difference in the monthly payments you made before chopping it in. So you'd be worse off (assuming you didn't invest the difference in payments and make more in returns than the difference in interest etc etc)

When dealers come up with stuff like this I'm never sure whether they are knowingly scamming to he get a better commission or think they're doing the customer a favour but are too thick to realise they aren't. Either way as Finance is becoming the norm there must surely come a point when these practices are regulated I.E. 'don't be giving incorrect financial advice'