BMW PCP Finance

[lester-mwttq]

I took out a BMW PCP on a 7 series in march, partly to help get a better deal on the car. I have just got a redemption figure and it is more than I borrowed! I borrowed £32500 and have paid 3 monthly payments of app £550 and the quoted redemption is £32640. I spoke to BMW FS who claimed it was all within European law etc . Interest rate was 12.4%. I calculate the interest on this deal to be in excess of 20% given I have not not reduced any capital so all payments must be interest? No warning in agreement about this possibility at all and dealer equally surprised that it has turned out like this. Any thoughts/bright ideas? Online chat says pay bulk off and leave some remaining but not sure I understand all that. Agreement was set up over 49 months.

[Car-Matt]

lolz

[dibblecorse]

Car-Matt said:

lolz

This won't go well for the OP.

[Stella Tortoise]

Car-Matt said:

lolz

Indeed.

[Alucidnation]

lester-mwttq said:

I took out a BMW PCP on a 7 series in march, partly to help get a better deal on the car. I have just got a redemption figure and it is more than I borrowed! I borrowed £32500 and have paid 3 monthly payments of app £550 and the quoted redemption is £32640. I spoke to BMW FS who claimed it was all within European law etc . Interest rate was 12.4%. I calculate the interest on this deal to be in excess of 20% given I have not not reduced any capital so all payments must be interest? No warning in agreement about this possibility at all and dealer equally surprised that it has turned out like this. Any thoughts/bright ideas? Online chat says pay bulk off and leave some remaining but not sure I understand all that. Agreement was set up over 49 months.

[joestifff]

lester-mwttq said:

I took out a BMW PCP on a 7 series in march, partly to help get a better deal on the car. I have just got a redemption figure and it is more than I borrowed! I borrowed £32500 and have paid 3 monthly payments of app £550 and the quoted redemption is £32640. I spoke to BMW FS who claimed it was all within European law etc . Interest rate was 12.4%. I calculate the interest on this deal to be in excess of 20% given I have not not reduced any capital so all payments must be interest? No warning in agreement about this possibility at all and dealer equally surprised that it has turned out like this. Any thoughts/bright ideas? Online chat says pay bulk off and leave some remaining but not sure I understand all that. Agreement was set up over 49 months.

Just done very quick fag packet maths, and I think after three payments, you should owe ~£32,200, plus I am guessing one months interest on the remaining balance as a penalty? ~ £330 = £32,500 + any admin fees.

So to me, it looks about right. Without knowing exact dates etc.

Lesson for you to repay within 14 days (or is it a month) if you have no intention of completing the finance throughout!

[Monkeylegend]

lester-mwttq said:

I took out a BMW PCP on a 7 series in march, partly to help get a better deal on the car. I have just got a redemption figure and it is more than I borrowed! I borrowed £32500 and have paid 3 monthly payments of app £550 and the quoted redemption is £32640. I spoke to BMW FS who claimed it was all within European law etc . Interest rate was 12.4%. I calculate the interest on this deal to be in excess of 20% given I have not not reduced any capital so all payments must be interest? No warning in agreement about this possibility at all and dealer equally surprised that it has turned out like this. Any thoughts/bright ideas? Online chat says pay bulk off and leave some remaining but not sure I understand all that. Agreement was set up over 49 months.

12.4%

They must have seen you coming.

[chow pan toon]

12%

[Joe5y]

12.4% - Oh.My.God.

[jason61c]

I guess you know that when you looked at the finance before signing?

[Wooda80]

You said that you only took the finance to assist in getting a better deal. How much better was the deal?

[lester-mwttq]

Thanks for all the replies. The deal was about £1000 less with the finance, my point is however that no where did it say there was a penalty or that I may owe more than I borrowed. I was assure by the dealer the front end loading no longer exists and that repayment is now non penalising. As it was a main BMW dealer I thought all was good and trusted them . I even said I would repay it within 14 days but the dealer said he would lose all the commission. Like an idiot I thought I would help them out but with no knowledge that this could happen. It just seems like sharp practice to me and not something I would have expected with a company like BMW. The irony is that I had the money all the time, even my part ex was only £8k less than the car I was buying! Lesson learnt I guess but it still feels raw!

[Stella Tortoise]

It's a shame that dealers can't sell cars without all of the smoke and mirrors.

[Chris32345]

lester-mwttq said:

Thanks for all the replies. The deal was about £1000 less with the finance, my point is however that no where did it say there was a penalty or that I may owe more than I borrowed. I was assure by the dealer the front end loading no longer exists and that repayment is now non penalising. As it was a main BMW dealer I thought all was good and trusted them . I even said I would repay it within 14 days but the dealer said he would lose all the commission. Like an idiot I thought I would help them out but with no knowledge that this could happen. It just seems like sharp practice to me and not something I would have expected with a company like BMW. The irony is that I had the money all the time, even my part ex was only £8k less than the car I was buying! Lesson learnt I guess but it still feels raw!

Eh?
It's finance you always pay back more then you borrowed that's how it works if it didn't they wouldn't be any money to be made by the lender

[lester-mwttq]

I am aware of the principle, its the amounts within the quoted APR that I am querying. The payments are designed to cover the interest and reduce the loan, not the other way around!

[RobinBanks]

PCP. 3 months in. Owes more than... hood av thunk it.

The usual suspects will be along to promote pcp shortly

[Monkeylegend]

lester-mwttq said:

The irony is that I had the money all the time, even my part ex was only £8k less than the car I was buying! Lesson learnt I guess but it still feels raw!

I am confused, maybe the heat has frazzled my brain.

You part ex a car that is worth only £8k less than the one you bought but have taken out a PCP for £32500 at a mighty 12.4% and are paying back £550 a month for 49 months?

I am clearly missing something and must deserve a whoosh.

[RobinBanks]

Monkeylegend said:

lester-mwttq said:

The irony is that I had the money all the time, even my part ex was only £8k less than the car I was buying! Lesson learnt I guess but it still feels raw!

I am confused, maybe the heat has frazzled my brain.

You part ex a car that is worth only £8k less than the one you bought but have taken out a PCP for £32500 at a mighty 12.4% and are paying back £550 a month for 49 months?

I am clearly missing something and must deserve a whoosh.

The salesman would have told him to invest the money because everyone on PH that has a PCP is making way more on their investments than the interest on the loan!

[Bob-2146]

Yep PCP is a major scam and is constantly missold.

But wait. Where’s Brooking, Daemon, Deep heat and the gang to attack anyone personally who dares make such an observation?

I’m sure they’ll be along shortly...

Rule of thumb: never use PCP, they cannot be trusted.

[Monkeylegend]

Yes but it beggars belief that anyone could willingly sign up to 12.4% interest rate in the current climate.