BMW Finance Decline
Discussion
Derek 911 said:
I paid 48k for the 330d trade value today is probably 15kish so depreciation of 32-33k in 3 years PCP was 580 a month so as others have said the finance company have taken the loss with me on this car which is why PCP is a good deal on new cars but potentially also a factor in why I am being refused car finance now.
Sorry I don't really get you? You got out because you VT'd that car. If you had PCP'd that car for the full term then you would have paid the depretiation for that car without a doubt. Bar the possible couple of thousand pounds equity that might have been left in it vs the balloon payment. 
RM88 said:
Derek 911 said:
I paid 48k for the 330d trade value today is probably 15kish so depreciation of 32-33k in 3 years PCP was 580 a month so as others have said the finance company have taken the loss with me on this car which is why PCP is a good deal on new cars but potentially also a factor in why I am being refused car finance now.
Sorry I don't really get you? You got out because you VT'd that car. If you had PCP'd that car for the full term then you would have paid the depretiation for that car without a doubt. Bar the possible couple of thousand pounds equity that might have been left in it vs the balloon payment. Guaranteed future value was 15k in January 2019, assuming trade price today is 15k for that vehicle we could assume maybe 12-13k at best?
So 48k car minus 13k gives us 35k total depreciation even with the inclusion of the interest on the loan being serviced it looks on those maths that the finance company & bmw still had some hand in the depreciation of the vehicle or at least making it seem that way by inflated retail prices and discounts etc.
But yeah either way you chuck away a ton of money on PCP but buying it outright with cash just doesn’t seem like it’s much of a better deal with that level of depreciation your 48k asset would have been dropping by around £700-800 per month the pcp monthly payment was £580. Pcp wins on that kind of car I would say which is why 88% of new car sales are pcp.
Toaster Pilot said:
Not sure using nearly all of a £3k credit card is that big a deal - if you had £60k available to you and were maxing it out that’s a lot different
Your percentage utilisation is more important than numbers. 2.5k on a 3k card suggests you use all credit available to you. 2.5k on a 15k card suggests more self control.Integroo said:
Toaster Pilot said:
Not sure using nearly all of a £3k credit card is that big a deal - if you had £60k available to you and were maxing it out that’s a lot different
Your percentage utilisation is more important than numbers. 2.5k on a 3k card suggests you use all credit available to you. 2.5k on a 15k card suggests more self control.Derek 911 said:
I have an American Express platinum charge card which you could buy an M3 outright on provided you cleared the balance in the next month obviously, which I couldn’t afford to do but they only give those out if you have good credit and earnings of over 50k I think it is can’t remember application was a few years ago before this recent pickle I’ve got myself into I did have very very good credit that card and 2-3 other normal credit cards all with 5-10k limits and I never used any of them really so I closed them down stupidly enough now benefit of hindsight and all that but I was just aiming to make my life simpler I don’t really use credit cards much my Amex I do but I pay it off every month the balance on the Santander or £2500 was just house costs and Xmas it will get paid off this month so I do feel some of this credit score stuff is a case of here’s some smoke and there’s a big mirror. I get that it could be indicative that someone is struggling or living beyondo means or whatever and it doesn’t help my situation but neither really apply to me I can afford to do what am doing financing high value cars is just the way I choose to buy rather than save up and buy secondhand probably smarter maybe I should consider this now but I’ve done it for 15 years so I do find some of the credit score stuff a bit of a black art.
I'm not commenting on whether or not you can afford it, just how credit scoring works. It would be useful for you to have a much higher credit limit you don't use to improve your score. I have 13k across two cards but I never go above around 1500 - 2500 a month and pay it off in full every month. Similar to you but my utilisation is never above 20%. RM88 said:
Cash will always be the cheapest way of buying fact. Even at the current 3.9% bmw are offering you are still looking at 7k interest charges even after discounts. 7k is 7k! This is coming from someone who likes using PCP (as I can't afford to buy outright 
) and now leases.
Someone who has 50k of cash sitting in their bank is someone who is smarter than me, the reason they have the 50k in cold hard currency is cos they are not daft enough to buy a depreciating asset. ) and now leases. Either than or guys buying M3’s with cash are in a different league to my earnings I do ok but not 100s of thousands a year or whatever it would be to not really miss dropping 50k into a car. Reality is if you are earning less than a 100k your probably going to notice that kind of money going missing on a depreciating asset.
There’s also another arguement to say the guys with 50k sitting in the bank again given that they are very savvy and not a daft petrol head like me are probably interested in maybe investing that 50k in property rentals stock market even classic cars who knows whatever so they could offset 7k in interest to lease by whatever their 50k could make them over the 3-4 years.
In all honesty I think the smart money on the F80 M3 is maybe getting into a standard car 64-65 plate 35-40k saving up a bit and dropping in 10-15k and then do a 2-3 hire purchase on the rest which is something I am considering too
Integroo said:
Derek 911 said:
I have an American Express platinum charge card which you could buy an M3 outright on provided you cleared the balance in the next month obviously, which I couldn’t afford to do but they only give those out if you have good credit and earnings of over 50k I think it is can’t remember application was a few years ago before this recent pickle I’ve got myself into I did have very very good credit that card and 2-3 other normal credit cards all with 5-10k limits and I never used any of them really so I closed them down stupidly enough now benefit of hindsight and all that but I was just aiming to make my life simpler I don’t really use credit cards much my Amex I do but I pay it off every month the balance on the Santander or £2500 was just house costs and Xmas it will get paid off this month so I do feel some of this credit score stuff is a case of here’s some smoke and there’s a big mirror. I get that it could be indicative that someone is struggling or living beyondo means or whatever and it doesn’t help my situation but neither really apply to me I can afford to do what am doing financing high value cars is just the way I choose to buy rather than save up and buy secondhand probably smarter maybe I should consider this now but I’ve done it for 15 years so I do find some of the credit score stuff a bit of a black art.
I'm not commenting on whether or not you can afford it, just how credit scoring works. It would be useful for you to have a much higher credit limit you don't use to improve your score. I have 13k across two cards but I never go above around 1500 - 2500 a month and pay it off in full every month. Similar to you but my utilisation is never above 20%. I understand what your saying as I said in every other application in the past I’ve probably had 2-3 credit cards open with big limits and using nothing I just shut them down to make my affairs easier to manage bear in mind I have the Amex and the Santander card now currently active so 2 was enough.
Yeah but we weren't talking about about investing elsewhere etc you were stating that PCP was the best option on buying a new car as it beats depreciation. Its not, PCP is one of the most expensive way of purchasing but it allows for low monthly payments hence it's popularity. You seem to think it's some magic form of finance where the manufacturer takes the hit on the depreciation that's simply not true at all YOU will be paying practically all of it!
Anyway good luck with your situation
however I think i'll bow out of this thread I don't think you seem to fully grasp the full aspect of PCP and that's not really what your OP was asking. Best of luck.
Anyway good luck with your situation
however I think i'll bow out of this thread I don't think you seem to fully grasp the full aspect of PCP and that's not really what your OP was asking. Best of luck. RM88 said:
Yeah but we weren't talking about about investing elsewhere etc you were stating that PCP was the best option on buying a new car as it beats depreciation. Its not, PCP is one of the most expensive way of purchasing but it allows for low monthly payments hence it's popularity. You seem to think it's some magic form of finance where the manufacturer takes the hit on the depreciation that's simply not true at all YOU will be paying practically all of it!
Anyway good luck with your situation however I think i'll bow out of this thread I don't think you seem to fully grasp the full aspect of PCP and that's not really what your OP was asking. Best of luck.
I get the full concept of PCP and yeah I paid the depreciation of the car but as others have said there is a reason you get that good finance rate from Alphera when your buying a new car & the dealer and bmw offer big deposit contributions and discounts that you will find are lessened when your financing through a third party or you pay cash. Anyway good luck with your situation
however I think i'll bow out of this thread I don't think you seem to fully grasp the full aspect of PCP and that's not really what your OP was asking. Best of luck. It’s why their are threads on here from wealthy individuals buying M3’s outright but first of all agreeing terms of a PCP solely to secure the discounts that come with them and then settling the finance within 14 day period so winding up with no interest.
Your right I’m not really wanting this thread to degenerate into some arguement you’ve brought up about pcp but perhaps rather than telling me I don’t know what I’m talking about maybe re-read my figures on my last PCP deal and consider that the lessened depreciation vs a potential 3rd party HP agreement came via the bmw select PCP agreement, the discounts that come with it and the rates that are lower than their equivalent product on HP or on approved used I’ve sat in the showrooms and compared the products and seen how it works on new cars being more value for money than anything up to 12-18 months old so it’s just something your maybe not getting.
Derek 911 said:
On the subject of maxing finance I do have 39k on HP outstanding
Derek 911 said:
application for a Yas Marina Competiion Pack M3
DELETED: Comment made by a member who's account has been deleted.So what I bought a 911 and thought I was trading down my daily to get payments a bit lower having both cars but the retailer let me down on sales handover date now I want to just get rid of 911 and get an M3 cos I only want one car on the road Jesus Christ shoot me I’m irresponsible ohhh holy god.
The purchase price of any car I’ve ever got on finance has never been more than 50% of my yearly earnings and I keep them 3-4 years usually but life happens you feel like a change with a 911 and it doesn’t work out so I go back to bmw which is what I know I don’t see how this puts the country into a recession in all honesty it’s my financial affairs and it works out fine for me 99.9% of the time I simply asked a question about credit scoring and I’m getting lectured on what I can and can’t afford and then the finite details of PCP for the last time I can afford what am doing Clydesdale who finance my Porsche confirmed my affordability of the loans I’m servicing is not an issue for them they referred me to my score as it was based purely on that so this is why with an alphera finance rejection and a Clydesdale I have asked the question about credit utilisation or other factors I may be missing I think after stating 3-4 times that I can afford the bloody cars monthly payments I don’t need to go into it again and it is just my preferred way of doing things rather than dropping 10-15k deposits into something losing money anyway?
Back on topic credit scoring........
Edited by Derek 911 on Thursday 22 March 22:01
Why ??? Unless you can offset it against tax ..
Bet you would be just as happy driving a BMW bought outright for the deposit you would be putting down on your new M3 maybe more so after you looked at your bank statement a few months down the line ... I think you have had a lucky escape
Bet you would be just as happy driving a BMW bought outright for the deposit you would be putting down on your new M3 maybe more so after you looked at your bank statement a few months down the line ... I think you have had a lucky escape
Derek 911 said:
I get the full concept of PCP and yeah I paid the depreciation of the car but as others have said there is a reason you get that good finance rate from Alphera when your buying a new car & the dealer and bmw offer big deposit contributions and discounts that you will find are lessened when your financing through a third party or you pay cash.
It’s why their are threads on here from wealthy individuals buying M3’s outright but first of all agreeing terms of a PCP solely to secure the discounts that come with them and then settling the finance within 14 day period so winding up with no interest.
Your right I’m not really wanting this thread to degenerate into some arguement you’ve brought up about pcp but perhaps rather than telling me I don’t know what I’m talking about maybe re-read my figures on my last PCP deal and consider that the lessened depreciation vs a potential 3rd party HP agreement came via the bmw select PCP agreement, the discounts that come with it and the rates that are lower than their equivalent product on HP or on approved used I’ve sat in the showrooms and compared the products and seen how it works on new cars being more value for money than anything up to 12-18 months old so it’s just something your maybe not getting.
It’s why their are threads on here from wealthy individuals buying M3’s outright but first of all agreeing terms of a PCP solely to secure the discounts that come with them and then settling the finance within 14 day period so winding up with no interest.
Your right I’m not really wanting this thread to degenerate into some arguement you’ve brought up about pcp but perhaps rather than telling me I don’t know what I’m talking about maybe re-read my figures on my last PCP deal and consider that the lessened depreciation vs a potential 3rd party HP agreement came via the bmw select PCP agreement, the discounts that come with it and the rates that are lower than their equivalent product on HP or on approved used I’ve sat in the showrooms and compared the products and seen how it works on new cars being more value for money than anything up to 12-18 months old so it’s just something your maybe not getting.
.......ok it's something I'm not getting. rockin said:
You're absolutely right.
Although voluntary termination provides a safety net for consumers, it generally loses the finance company money. Usually, you haven’t paid off enough to cover your car’s depreciation, so the finance company is taking back a car which is worth less than the outstanding finance amount.
Understandably, finance companies do not like this one bit. But there is nothing they can do to stop it as the law protects termination rights.
The reality is if you do voluntary termination properly, they can’t stop you. What’s more, voluntary termination will not affect your credit score or credit rating. However, some finance companies may decline any further finance applications from you. And you can't blame them.
I can say that bmw finance were happy to give me a new agreement even though I have vt'd two cars back to them previously with zero issue at all.Although voluntary termination provides a safety net for consumers, it generally loses the finance company money. Usually, you haven’t paid off enough to cover your car’s depreciation, so the finance company is taking back a car which is worth less than the outstanding finance amount.
Understandably, finance companies do not like this one bit. But there is nothing they can do to stop it as the law protects termination rights.
The reality is if you do voluntary termination properly, they can’t stop you. What’s more, voluntary termination will not affect your credit score or credit rating. However, some finance companies may decline any further finance applications from you. And you can't blame them.
Derek 911 said:
Again you need to read the thread properly I can’t be arsed explaining that I can afford this again. My mortgage and my address has been in the same place for last 15 years I was living with my girfriend for a couple of years still registered and paying the same mortgage on the place I live right now.
So what I bought a 911 and thought I was trading down my daily to get payments a bit lower having both cars but the retailer let me down on sales handover date now I want to just get rid of 911 and get an M3 cos I only want one car on the road Jesus Christ shoot me I’m irresponsible ohhh holy god.
The purchase price of any car I’ve ever got on finance has never been more than 50% of my yearly earnings and I keep them 3-4 years usually but life happens you feel like a change with a 911 and it doesn’t work out so I go back to bmw which is what I know I don’t see how this puts the country into a recession in all honesty it’s my financial affairs and it works out fine for me 99.9% of the time I simply asked a question about credit scoring and I’m getting lectured on what I can and can’t afford and then the finite details of PCP for the last time I can afford what am doing Clydesdale who finance my Porsche confirmed my affordability of the loans I’m servicing is not an issue for them they referred me to my score as it was based purely on that so this is why with an alphera finance rejection and a Clydesdale I have asked the question about credit utilisation or other factors I may be missing I think after stating 3-4 times that I can afford the bloody cars monthly payments I don’t need to go into it again and it is just my preferred way of doing things rather than dropping 10-15k deposits into something losing money anyway?
Back on topic credit scoring........
50% of your earnings is mentalSo what I bought a 911 and thought I was trading down my daily to get payments a bit lower having both cars but the retailer let me down on sales handover date now I want to just get rid of 911 and get an M3 cos I only want one car on the road Jesus Christ shoot me I’m irresponsible ohhh holy god.
The purchase price of any car I’ve ever got on finance has never been more than 50% of my yearly earnings and I keep them 3-4 years usually but life happens you feel like a change with a 911 and it doesn’t work out so I go back to bmw which is what I know I don’t see how this puts the country into a recession in all honesty it’s my financial affairs and it works out fine for me 99.9% of the time I simply asked a question about credit scoring and I’m getting lectured on what I can and can’t afford and then the finite details of PCP for the last time I can afford what am doing Clydesdale who finance my Porsche confirmed my affordability of the loans I’m servicing is not an issue for them they referred me to my score as it was based purely on that so this is why with an alphera finance rejection and a Clydesdale I have asked the question about credit utilisation or other factors I may be missing I think after stating 3-4 times that I can afford the bloody cars monthly payments I don’t need to go into it again and it is just my preferred way of doing things rather than dropping 10-15k deposits into something losing money anyway?
Back on topic credit scoring........
Edited by Derek 911 on Thursday 22 March 22:01
To be honest I never really expected this kind of response on the best known car enthusiasts forum on the net. Basically the feedback from the question on my original post is:
1. I’m going to cause a recession
2. I might also cause the nuclear holocaust
3. I have no idea how PCP works
4. I have no idea how anything works
5. I shouldn’t be buying desirable cars
6. I should just buy a cheap older bmw instead.
It’s either a lot of folk on this forum with way more money than me buying every single car on the roads outright and can afford the new M3’s & 911’s etc cash & if that’s the case I wouldn’t mind you’s sharing with me how you’s are doing it cos I wouldn’t mind a bit of whatever income you are getting.
Or
It’s load of folk who love these kinds of cars cos this is a website for discussion on them after all but you’s would rather keep money in your bank and spend on other things and drive older models or cheap to run transport?
1. I’m going to cause a recession
2. I might also cause the nuclear holocaust
3. I have no idea how PCP works
4. I have no idea how anything works
5. I shouldn’t be buying desirable cars
6. I should just buy a cheap older bmw instead.
It’s either a lot of folk on this forum with way more money than me buying every single car on the roads outright and can afford the new M3’s & 911’s etc cash & if that’s the case I wouldn’t mind you’s sharing with me how you’s are doing it cos I wouldn’t mind a bit of whatever income you are getting.
Or
It’s load of folk who love these kinds of cars cos this is a website for discussion on them after all but you’s would rather keep money in your bank and spend on other things and drive older models or cheap to run transport?
Derek 911 said:
To be honest I never really expected this kind of response on the best known car enthusiasts forum on the net. Basically the feedback from the question on my original post is:
1. I’m going to cause a recession
2. I might also cause the nuclear holocaust
3. I have no idea how PCP works
4. I have no idea how anything works
5. I shouldn’t be buying desirable cars
6. I should just buy a cheap older bmw instead.
It’s either a lot of folk on this forum with way more money than me buying every single car on the roads outright and can afford the new M3’s & 911’s etc cash & if that’s the case I wouldn’t mind you’s sharing with me how you’s are doing it cos I wouldn’t mind a bit of whatever income you are getting.
Or
It’s load of folk who love these kinds of cars cos this is a website for discussion on them after all but you’s would rather keep money in your bank and spend on other things and drive older models or cheap to run transport?
You do what you want it's your life and your money ... However a paid up mortgage and a account with the Queens bank gives you a warm glow .1. I’m going to cause a recession
2. I might also cause the nuclear holocaust
3. I have no idea how PCP works
4. I have no idea how anything works
5. I shouldn’t be buying desirable cars
6. I should just buy a cheap older bmw instead.
It’s either a lot of folk on this forum with way more money than me buying every single car on the roads outright and can afford the new M3’s & 911’s etc cash & if that’s the case I wouldn’t mind you’s sharing with me how you’s are doing it cos I wouldn’t mind a bit of whatever income you are getting.
Or
It’s load of folk who love these kinds of cars cos this is a website for discussion on them after all but you’s would rather keep money in your bank and spend on other things and drive older models or cheap to run transport?
Integroo said:
50% of your earnings is mental
DELETED: Comment made by a member who's account has been deleted.
tty tone of lot of these posts it’s like a bunch of keyboard warriors talking adding 2 + 2 & getting 5. So I like my cars, so what it’s a car forum this is just a weird attitude in general, 50% purchase price of my 1 year earnings spread over 3-4 years winds up being less than 20% of my takehome pay on monthly payments or alternatively if you saved up for 4 years then bought the car then. My only other notable outgoing is mortgage payment which is 15% of my monthly take home pay, that leaves me 65% earnings left over for food & daily running costs of house car & whatever else comes up in life.
I don’t drink, I don’t smoke, I don’t spend massively on clothes or any of that stuff I have no family to support cars are my thing what is the big deal? Where is the recession coming out of my behaviour?
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