What would you do? Buy, lease, hire, 2nd hand or new?
Discussion
Hi all you hopefully helpful people. I'm new here and in a dilemma!
I have a BMW 320i M Sport (F30 2017 facelift) which comes to the end of its hire purchase contract in June 2021. I think we got it on a bit of a stonking deal over 48 months it was about 1% APR with repayments at £328. It currently has 25,500 miles on the clock. We now have about £11k finance left on the car and are allowed to buy it. Or we could chop it in for another model.
Problem is - the new BMW's are the complete new engines/model upgrades so they have a higher OTR price, meaning we'd still need to put in a lump sum deposit and BMW seems to only be offering 4.99% APR or thereabouts, making another 3 Series around £425pcm with a deposit of £3,000.
Having had a significant income reduction since covid, this just isn't an option. Even looking at other manufacturers (Audi, Volvo etc) who are offering 0% APR e.g. Volvo XC60 it only exists on the most premium models and they still want similar monthly payments etc. I thought about less premium brands like a Nissan Qashqai but even a mid-level Tektro will be about £325pcm.
Ultimately I need a car for commuting and for the family. I want my monthly payments to drop and I don't ideally want to fork out chunks of deposit I'll never see again.
Is it a good idea to:
a) take out a personal loan at 2.6% and buy my existing BMW from the dealer
b) sell my BMW to a friend for a small profit and find a second hand car for around £8,000 which fulfils the criteria
c) lease?? I'm not sure how these deals work or if they're massively different to dealer HPC's
I have a BMW 320i M Sport (F30 2017 facelift) which comes to the end of its hire purchase contract in June 2021. I think we got it on a bit of a stonking deal over 48 months it was about 1% APR with repayments at £328. It currently has 25,500 miles on the clock. We now have about £11k finance left on the car and are allowed to buy it. Or we could chop it in for another model.
Problem is - the new BMW's are the complete new engines/model upgrades so they have a higher OTR price, meaning we'd still need to put in a lump sum deposit and BMW seems to only be offering 4.99% APR or thereabouts, making another 3 Series around £425pcm with a deposit of £3,000.
Having had a significant income reduction since covid, this just isn't an option. Even looking at other manufacturers (Audi, Volvo etc) who are offering 0% APR e.g. Volvo XC60 it only exists on the most premium models and they still want similar monthly payments etc. I thought about less premium brands like a Nissan Qashqai but even a mid-level Tektro will be about £325pcm.
Ultimately I need a car for commuting and for the family. I want my monthly payments to drop and I don't ideally want to fork out chunks of deposit I'll never see again.
Is it a good idea to:
a) take out a personal loan at 2.6% and buy my existing BMW from the dealer
b) sell my BMW to a friend for a small profit and find a second hand car for around £8,000 which fulfils the criteria
c) lease?? I'm not sure how these deals work or if they're massively different to dealer HPC's
Thanks Mobb. I'm veering toward that.
Loads of people say just get rid at the end of the term, I guess if you get terrible APR then that's sensible but this is such low mileage for a 2017 and even with a loan of 2.6% I'd only be paying about 3.6% more than the original otr price.
I'm just pretty nervous, due to always being warned off doing exactly this. Is it expensive do you know to extend a cars warranty?
Loads of people say just get rid at the end of the term, I guess if you get terrible APR then that's sensible but this is such low mileage for a 2017 and even with a loan of 2.6% I'd only be paying about 3.6% more than the original otr price.
I'm just pretty nervous, due to always being warned off doing exactly this. Is it expensive do you know to extend a cars warranty?
robonzo said:
Thanks Mobb. I'm veering toward that.
Loads of people say just get rid at the end of the term, I guess if you get terrible APR then that's sensible but this is such low mileage for a 2017 and even with a loan of 2.6% I'd only be paying about 3.6% more than the original otr price.
I'm just pretty nervous, due to always being warned off doing exactly this. Is it expensive do you know to extend a cars warranty?
Have a look here - https://www.bmw-warranty.co.uk/Login/Index/Loads of people say just get rid at the end of the term, I guess if you get terrible APR then that's sensible but this is such low mileage for a 2017 and even with a loan of 2.6% I'd only be paying about 3.6% more than the original otr price.
I'm just pretty nervous, due to always being warned off doing exactly this. Is it expensive do you know to extend a cars warranty?
Probably even including the warranty cost, it would be much cheaper than getting another new finance deal.
MOBB said:
Also looking at Autotrader, your car for £11k looks like a bargain.
Yeah I just looked too. the average price is £17,700 for that year, mileage and spec. Are third party warranty providers decent? I saw motoreasy have a plan covering all engine and key electricals for £24pcm and RAC breakdown would be £7 which beats BMW's £42 per month.I suppose with BMW you'd be getting guaranteed parts and labour at a main dealer though, which is probably good for resale, right?
BrabusMog said:
Unless you're desperate for a new car, I'd go with option A.
I don't think the new versions are much better mechanically. Lots of gadgets and toys like heads up display etc but the drive is the same.I think with personal loan finance plus an extended warranty the monthly payments would be £255, compared to £440 on a new 3 series.
Seems simple. You're getting to buy a £17k car for £11k, even with some finance and warranty\breakdown cover on top it's a deal. On top of that, it's a car you know, which is worth money in itself.
Personally, I'd put the monthly cost of the warranty into a savings account - odds are you'll never need it, and if you do, you have the money.
Personally, I'd put the monthly cost of the warranty into a savings account - odds are you'll never need it, and if you do, you have the money.
robonzo said:
....Are third party warranty providers decent? I saw motoreasy have a plan covering all engine and key electricals for £24pcm and RAC breakdown would be £7 which beats BMW's £42 per month.
I suppose with BMW you'd be getting guaranteed parts and labour at a main dealer though, which is probably good for resale, right?
If I felt the need for an extended warranty, I would only trust a manufacturer'-backed warranty. My father-in-law has/had an extended manufacturer warranty on his BMW (3ltr diesel) which has needed to claim on a few times for quite large sums and he speaks highly of them.I suppose with BMW you'd be getting guaranteed parts and labour at a main dealer though, which is probably good for resale, right?
So many people have issues with cheaper warranty providers that it seems like throwing money away because they find all kinds of ways to avoid paying.
BMW warranty is very good apparently.
I bought a used 325i and did think about taking a BMW warranty. It was a bit pricey but compared to companies like warranty wise etc. seemed to offer more reassurance.
Sadly I opted not to bother and a year later ended up with a £2.5K bill for fuel injectors and sensors. Lesson learned, don't own a BMW out of warranty unless you can work on it yourself. Parts are very, very expensive. It was a lovely car but I'll never have another.
I bought a used 325i and did think about taking a BMW warranty. It was a bit pricey but compared to companies like warranty wise etc. seemed to offer more reassurance.
Sadly I opted not to bother and a year later ended up with a £2.5K bill for fuel injectors and sensors. Lesson learned, don't own a BMW out of warranty unless you can work on it yourself. Parts are very, very expensive. It was a lovely car but I'll never have another.
h0b0 said:
Why not do nothing?
This.Your current deal runs for another year albeit at £328 per month. Why take out another loan for an extended period and stretch things out? Your current APR is 1% which is better than 2.6%
Taking out another loan is like refinances debt. It reduces payments but extends the term and has the potential to tie you in knots in the future.
maz8062 said:
This.
Your current deal runs for another year albeit at £328 per month. Why take out another loan for an extended period and stretch things out? Your current APR is 1% which is better than 2.6%
Taking out another loan is like refinances debt. It reduces payments but extends the term and has the potential to tie you in knots in the future.
But if he buys his monthly payments go from £328 on the finance deal to £255 with the bank loan.Your current deal runs for another year albeit at £328 per month. Why take out another loan for an extended period and stretch things out? Your current APR is 1% which is better than 2.6%
Taking out another loan is like refinances debt. It reduces payments but extends the term and has the potential to tie you in knots in the future.
He'd still need to take out the extended warranty if he just kept the finance deal wouldn't he?
Or am I missing something?
GreatGranny said:
maz8062 said:
This.
Your current deal runs for another year albeit at £328 per month. Why take out another loan for an extended period and stretch things out? Your current APR is 1% which is better than 2.6%
Taking out another loan is like refinances debt. It reduces payments but extends the term and has the potential to tie you in knots in the future.
But if he buys his monthly payments go from £328 on the finance deal to £255 with the bank loan.Your current deal runs for another year albeit at £328 per month. Why take out another loan for an extended period and stretch things out? Your current APR is 1% which is better than 2.6%
Taking out another loan is like refinances debt. It reduces payments but extends the term and has the potential to tie you in knots in the future.
He'd still need to take out the extended warranty if he just kept the finance deal wouldn't he?
Or am I missing something?
Come to think of it, this whole thing doesn't make sense.
Is it an HP agreement or PCP? £328 per month with an expiry of June 2021 means you'll be paying back £2952 - where does the £11k settlement come from? Does the op understand the difference between HP & PCP.
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