BMW Finance Quesion
Discussion
A question for those knowledgeable in finance agreements, BMW in particular.
In November last year we traded in my wife's 116d for a 3 year old X3 and financed part of this transaction through BMW finance. We did this as a straight loan, no balloon or lease agreements. The interest rate was high (10.9%) however we got 2 years free warranty and I was told that we could pay the loan off earlier and not lose the warranty. I justified the high interest rate with the warranty benefit and knowledge in a couple of months I could start adding more to the standard payments. We've cleared some other debts which now means I can start ploughing additional payments into this loan. Initially I did this as an extra £100, but was told any additional payment needed to be at least £500. I wasn't particularly happy about this however we decided that changed some finances around and could pay an additional £500 a month and therefore set up a direct debit. I've done this twice and on both occasions have been contacted by BMW with 2 differing views -
1. If I wanted to make an extra payment I would need to obtain a quote and that paying extra may actually add total interest paid to the loan (???)
2. That any additional payments actually needed to be more than £1000!
It seems like they will do everything in their power to stop you reducing the total interest payable on the loan? I'm a bit surprised and frustrated by this and was planning on contacting the Financial Ombudsmen to make a complaint as I don't believe this behaviour is legal? Has anyone else had this issue?
In November last year we traded in my wife's 116d for a 3 year old X3 and financed part of this transaction through BMW finance. We did this as a straight loan, no balloon or lease agreements. The interest rate was high (10.9%) however we got 2 years free warranty and I was told that we could pay the loan off earlier and not lose the warranty. I justified the high interest rate with the warranty benefit and knowledge in a couple of months I could start adding more to the standard payments. We've cleared some other debts which now means I can start ploughing additional payments into this loan. Initially I did this as an extra £100, but was told any additional payment needed to be at least £500. I wasn't particularly happy about this however we decided that changed some finances around and could pay an additional £500 a month and therefore set up a direct debit. I've done this twice and on both occasions have been contacted by BMW with 2 differing views -
1. If I wanted to make an extra payment I would need to obtain a quote and that paying extra may actually add total interest paid to the loan (???)
2. That any additional payments actually needed to be more than £1000!
It seems like they will do everything in their power to stop you reducing the total interest payable on the loan? I'm a bit surprised and frustrated by this and was planning on contacting the Financial Ombudsmen to make a complaint as I don't believe this behaviour is legal? Has anyone else had this issue?
There are banks offer up to £25,000 on 2.8 or 2.9% apr out there. We nearly went down this route when deciding between a 3 month old car and new order. As it stands, the new car makes more sense for us in terms of cash flow and impending house purchase so ordered new.
Next purchase will be nearly new financed with big deposit and top up loan for the balance. Definitely the cheapest way to run a car!
Next purchase will be nearly new financed with big deposit and top up loan for the balance. Definitely the cheapest way to run a car!
I took HP on my car as BMW finance then made a contribution to the cost of the car (£1500 IIRC) then paid it off within a month.
All the detail should be in the Terms and Conditions of the loan agreement. Dig it out and take a look. I was surprised how difficult it was to actually get to see the full terms of the HP agreement prior to signing up, it was like they intentionally tried to keep them from me. I won't sign up to anything without time to run through the conditions though so they eventually relented and sent them over, they made a bit of a fuss about it all though.
All the detail should be in the Terms and Conditions of the loan agreement. Dig it out and take a look. I was surprised how difficult it was to actually get to see the full terms of the HP agreement prior to signing up, it was like they intentionally tried to keep them from me. I won't sign up to anything without time to run through the conditions though so they eventually relented and sent them over, they made a bit of a fuss about it all though.
130idvg said:
There are banks offer up to £25,000 on 2.8 or 2.9% apr out there. We nearly went down this route when deciding between a 3 month old car and new order. As it stands, the new car makes more sense for us in terms of cash flow and impending house purchase so ordered new.
Next purchase will be nearly new financed with big deposit and top up loan for the balance. Definitely the cheapest way to run a car!
You’ll only get the 2.9% with a very high credit score. Many people will be offered a different, higher rate than that as part of the application process. Something to watch out for Next purchase will be nearly new financed with big deposit and top up loan for the balance. Definitely the cheapest way to run a car!
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