PCP, hire purchase, or paying up front for new BMW?
Discussion
I'm buying a new BMW 1 Series, and my intention is to keep it for a good while (5 years or maybe even more). The twist is that I can afford to pay for it outright, but I'm being "guided" towards a PCP by the sales person...
Looking at the calculator on the BMW website (which only works from list prices), with all these "contributions" from BMW and the dealership, a PCP with the maximum allowed deposit does seem to be a bit cheaper in total (adding up the monthly payments, the deposit, and the final payment, am I missing anything?).
Doing the same calculation with a hire purchase seems even cheaper (I suppose the terms are a bit more restrictive than a PCP, so you pay for the flexibility?).
Those are based on list price, though, are those "contributions" pretty much *instead* of any discount I ought to be able to bargain when paying for it outright?
Should I do something like going for the hire purchase, and settle it more or less immediately, to be able to take in the contributions?
Seems a bit ridiculous that it might be cheaper to finance than pay for it outright!
Thanks in advance.
Looking at the calculator on the BMW website (which only works from list prices), with all these "contributions" from BMW and the dealership, a PCP with the maximum allowed deposit does seem to be a bit cheaper in total (adding up the monthly payments, the deposit, and the final payment, am I missing anything?).
Doing the same calculation with a hire purchase seems even cheaper (I suppose the terms are a bit more restrictive than a PCP, so you pay for the flexibility?).
Those are based on list price, though, are those "contributions" pretty much *instead* of any discount I ought to be able to bargain when paying for it outright?
Should I do something like going for the hire purchase, and settle it more or less immediately, to be able to take in the contributions?
Seems a bit ridiculous that it might be cheaper to finance than pay for it outright!
Thanks in advance.
Yes essentially dealer contributions are discounts with a different name.
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
But yes take the HP I would say, but make it clear to the dealer you will clear it soon after (some of them have stipulations regarding contributions so you may have to wait 14 days and incur a little interest if not at 0%).
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
But yes take the HP I would say, but make it clear to the dealer you will clear it soon after (some of them have stipulations regarding contributions so you may have to wait 14 days and incur a little interest if not at 0%).
Reading a bit more on this, I'm seeing that I might have to wait until I've paid half of the cost, and it might cause some issues for future financing...
Some people tell me that I should finance, and invest my cash elsewhere, but for that to be an advantage, I'd have to get yearly returns at least as good as the interest rate, and this isn't a 0% interest situation. I don't expect to buy a house in the next couple of years either.
Some people tell me that I should finance, and invest my cash elsewhere, but for that to be an advantage, I'd have to get yearly returns at least as good as the interest rate, and this isn't a 0% interest situation. I don't expect to buy a house in the next couple of years either.
Mo28 said:
If a 1 series is the car you want, avoid going for a brand new example from the dealership and get a 6 month old where the car has taken a decent amount of the depreciation.
Be aware though that some nearly new cars are only marginally cheaper than brand new, particularly if the dealer is offering contributions (discount) on new, which won't be available on used.pphaneuf said:
Reading a bit more on this, I'm seeing that I might have to wait until I've paid half of the cost, and it might cause some issues for future financing...
You are referring to the VT provisions in the finance agreement.If you want to pay off the outstanding finance, you can do so at any time.
Ninja59 said:
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
If the OP is considering outright purchase, he should definitely be researching what third party suppliers can secure.Mo28 said:
If a 1 series is the car you want, avoid going for a brand new example from the dealership and get a 6 month old where the car has taken a decent amount of the depreciation.
I'm looking for a fairly precise set of options that isn't readily available used.I can paid for it, any way I cut it, but I'm not really looking to be a benefactor to BMW or BMW Finance, if I can help it!
V8mate said:
Ninja59 said:
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
If the OP is considering outright purchase, he should definitely be researching what third party suppliers can secure.I hadn't thought to look at those, I've just set up an alert on carwow, if only to get a good idea of what's available. They have the option to show quotes for "cash" rather than PCP financing there, should put me on the right track to bargain, thanks!
pphaneuf said:
V8mate said:
Ninja59 said:
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
If the OP is considering outright purchase, he should definitely be researching what third party suppliers can secure.I hadn't thought to look at those, I've just set up an alert on carwow, if only to get a good idea of what's available. They have the option to show quotes for "cash" rather than PCP financing there, should put me on the right track to bargain, thanks!
My view would be look for a barely old new one 
PCP dont make sense, you only do them if you want to refresh the motor after the end of the period. You buy it on cash/own finance terms (tesco loan) and you have no hassle, a PCP has a contract/terms.
My dad has had issues bargaining on non PCP finance deals, with the state of the figures on car sales can they afford to for long?
PCP dont make sense, you only do them if you want to refresh the motor after the end of the period. You buy it on cash/own finance terms (tesco loan) and you have no hassle, a PCP has a contract/terms.
My dad has had issues bargaining on non PCP finance deals, with the state of the figures on car sales can they afford to for long?
Assuming that BMW are giving decent manufacturer contributions on the 1er, then get the minimum HP finance (was £8k over 4 years @ 2.9% for me). Also get a large dealer discount (they are quite separate). Get the car and when you get it home, pay off the finance.
There is no hassle in doing this, no questions asked (apart from your debit card number!).
I did this for my 4 series and "saved" into 5 figures from retail.
If you are on babybmw forum, then you will know of Tony Lewis as the man to go to.
Broadspeed, DtD etc often show prices with manufacturers contributions taken off, so read the small print.
There is no hassle in doing this, no questions asked (apart from your debit card number!).
I did this for my 4 series and "saved" into 5 figures from retail.
If you are on babybmw forum, then you will know of Tony Lewis as the man to go to.
Broadspeed, DtD etc often show prices with manufacturers contributions taken off, so read the small print.
pphaneuf said:
Seems a bit ridiculous that it might be cheaper to finance than pay for it outright!
I don't know how car manufacturers get away with this, but while they do, you should take advantage.Just make sure you're getting maximum discount as well as any deposit contribution (dealer salespeople will try and convince you the contribution is the discount) then Withdraw within 14 days of signing the paperwork (which may be a few days before you get the car). You'll have to be a few pounds in interest.
If you leave it longer than 14 days then you're Settling and the interest change will be a couple of hundred, plus any fees (although they've largely been done away with these days).
AlwynMike said:
Assuming that BMW are giving decent manufacturer contributions on the 1er, then get the minimum HP finance (was £8k over 4 years @ 2.9% for me). Also get a large dealer discount (they are quite separate). Get the car and when you get it home, pay off the finance.
There is no hassle in doing this, no questions asked (apart from your debit card number!).
I did this for my 4 series and "saved" into 5 figures from retail.
The "minimum" HP finance? I was intending on putting in the maximum deposit (to minimise the financed amount), over 2 years (to minimise the interest, should I let it be after all), is that what you meant?There is no hassle in doing this, no questions asked (apart from your debit card number!).
I did this for my 4 series and "saved" into 5 figures from retail.
The PCP does seem to be slightly more complicated to get out, the HP might be better...
Ninja59 said:
Yes essentially dealer contributions are discounts with a different name.
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
But yes take the HP I would say, but make it clear to the dealer you will clear it soon after (some of them have stipulations regarding contributions so you may have to wait 14 days and incur a little interest if not at 0%).
Just for clarification, finance contributions arent dealer contributions, they're manufacturer contributions. Dont let a dealer tell you "hes already given you his discount" if its a finance contributionAre you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
But yes take the HP I would say, but make it clear to the dealer you will clear it soon after (some of them have stipulations regarding contributions so you may have to wait 14 days and incur a little interest if not at 0%).
V8mate said:
pphaneuf said:
V8mate said:
Ninja59 said:
Are you sure the deal is good as well as some people manage to secure discount (look at carwow,coast2coast etc.) as discount and finance contributions.
If the OP is considering outright purchase, he should definitely be researching what third party suppliers can secure.I hadn't thought to look at those, I've just set up an alert on carwow, if only to get a good idea of what's available. They have the option to show quotes for "cash" rather than PCP financing there, should put me on the right track to bargain, thanks!
pphaneuf said:
The "minimum" HP finance? I was intending on putting in the maximum deposit (to minimise the financed amount), over 2 years (to minimise the interest, should I let it be after all), is that what you meant?
The PCP does seem to be slightly more complicated to get out, the HP might be better...
Yes, that's the minimum sum available for finance.The PCP does seem to be slightly more complicated to get out, the HP might be better...
I was always going to pay it off 8mmediately, so it made little sense to ask for more.
There was a £1 end of finance fee plus a few pence interest (picked up car on the Wednesday and I think I phoned the following Monday)
I don't do finance on principle but the system is there to be used - so use it!
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