BMW Select

[eco21]

Hi,

Been looking at getting a 320d 2007ish plate - and went along to local BMW Garage to have a bit more detailed look.

Had a look at few cars and very briefly spoke to sales guy. He said that could get a new 2010 3 series for £400 a month on BMWSelect and a balloon at the end.

I was wondering is it possible to get BMWSelect financing on an Approved BMW, i.e get a year old one, similar specced one but that has done a bit of depreciating and will be less a month?

Thanks,

[Mattt]

You'll be able to finance AUC cars of course, what is so special about this particular package? There's also many 3rd party PCP/Finance providers.

[eco21]

Hi,

I was just unsure of being able to use BMWSelect for AUC.

Just was looking at getting direct loan for car plus my deposit, as wanted to own car at the end, but perphaps getting a better car and paying a similar amount a month and giving back at end maybe better option?

Edited by eco21 on Monday 22 March 10:01

[john_p]

Yes, BMWSelect is just another name for a PCP and is certainly available on used cars. And although BMW will try to discourage it (they want the profit!), you can use any other finance company to finance your purchase.

Make sure you do all the sums and work out exactly how much it will cost you. I'd rather buy an older car on HP than a brand new one on a PCP, but work it all out in Excel first.


e: the basic finance salesman trick is to work out how much you can spend a month, then convince you that actually you can buy a new car for the same money.

But overall, it costs you more, because you end up with a much smaller stake in the (admittedly newer) car at the end. Whether this is worth it to get a new car is entirely up to you, but just be prepared to question the figures every step of the way.

Edited by john_p on Monday 22 March 10:01

[richterswil]

Almost without exception HP will work out cheaper than a PCP deal overall.

If having a new/better car is a priority the extra 'real' cost might be worth it to you.

When I bought my E60 I considered a PCP plan but decided against it. As I recall, the amount I was committed to pay i.e. deposit plus monthly payments for the term of the agreement but NOT the balloon would have been about £7k less (£150ish per month) than the amount I ended up committing to pay on a HP agreement.

However, the HP method means I own the car with nothing further to pay - the balloon was going to be around £14k - in other words a total difference of around £7k over the full finance term allowing for full ownership, which in turn is a larger deposit on the next car and so on.

It means for the same car you need to be able to live with a higher monthly outlay of course but it is cheaper in the long run which is precisely why the dealers are keen to sell PCP plans.

[MidlandDan84]

Out of interest what sort of deposit is the scheme requiring?

[Deva Link]

PCP works best on new cars as the deal is usually supported by the manufacturer with a deposit contribution and/or lower interest rate.

The residual risk is greater on used cars so the final value/baloon will be much lower.

Both those things together mean the monthly payments could be just as much on a used car as they are on a new one.

[richterswil]

MidlandDan84 said:

Out of interest what sort of deposit is the scheme requiring?

Minimum 10 per cent is pretty typical

[paoloh]

The APR on a 2nd hand car is normally higher than new.

Check it out carefully as some times, a new car is actually cheaper than 2nd hand on a monthly basis.

[gizlaroc]

Push them for an APR figure too, as BMW are giving flat rate figures out again which mean sod all.
Mainly as their apr is so high at the moment it is laughable.

Good calculator to double check your figures.

http://www.dynamic-webs.co.uk/information/car_loan...

New cars have usually loose around 30% in year one and then 10% each year after, so buying at 12 months old and financing outright with a loan over 5 years may be alot cheaper than new and you own it.
Now a PCP is usually over 36 months, however the balloon between 36 and 48 months is not that big a difference so we are seeing more and more quotes over 48 months as it reduces the monthly figure a fair bit making new metal easier to sell. However, do the maths carfully as you may find 12 more months at the same price with a straight loan and it is yours rather than you owing £7k still.



£25000 320d
10% deposit
22500 over 48 = £486
Balloon of £7500

£2500 320d
10% deposit
22500 over 60 months £453
The car is yours.


That is because BMW are quoting around 5.5-6% flat where as a loan from one of the indy lenders is around 8% apr.

Be careful.

[gizlaroc]

Oh, and if you bought the 12 month old car for around £18k it would be..

£18000 320d year old
£2500 deosit
36 x £483
60 x £312

And you own it, no balloon.

Problem is looking at used prices many are only 10% off a new price, and you can buy from a broker with 10% off for a new one.
You would have to buy private to get the usual 30% off at a year old, or an indy dealer. Not a problem though as still warrantied and you can get the finance from Lombard or similar.

[skeeterm5]

re HP = all well and good if you dont want the risk of ending up after a couple of years with a car worth less than the finance on it...... so you have to keep the car for 5 years - who wants to do that?

Pays your money and pays your choice. PCP has advantages over HP, best advice is to understand both products fully and then make an informed choice.

S

[richterswil]

skeeterm5 said:

re HP = all well and good if you dont want the risk of ending up after a couple of years with a car worth less than the finance on it...... so you have to keep the car for 5 years - who wants to do that?

Pays your money and pays your choice. PCP has advantages over HP, best advice is to understand both products fully and then make an informed choice.

S

Can't argue with that although HP won't protect you from the risk of negative equity part way through the finance period - depending on the age etc of the car most finance packages will have a period where you owe more than the car is worth - particularly likely early in the agreement period when the depreciation curve is at its steepest.

It is just as easy (easier?) to end a HP agreement early as it is a PCP agreement so there is no need to keep the car 5 years - in that scenario (where changing cars again 'early' is a real possibility) I'd have thought HP to be more flexible than PCP.

The big selling point of PCP is lower monthly payments - that aside it is more expensive (though not necessarily by a huge amount), is restrictive (excess mileage penalties/franchised dealer servicing etc) and can be more expensive to end early.

[gizlaroc]

skeeterm5 said:

re HP = all well and good if you dont want the risk of ending up after a couple of years with a car worth less than the finance on it...... so you have to keep the car for 5 years - who wants to do that?

Pays your money and pays your choice. PCP has advantages over HP, best advice is to understand both products fully and then make an informed choice.

S

Agreed, sort of.
However you pay for that guarantee not the dealer.

BMW will go down to around 7% apr on a non guaranteed agreement, where as on a package with a GFV you are paying nearly 13% at the moment, seen some people being offered 16's and 17's!!

So, yeah if the apr is the same for both then get a pcp with a balloon, however they never are so be careful, you may get finance from someone else at the same a month and you have no balloon at the end, you own the car.

Hence above when I said be very careful.

Edited by gizlaroc on Monday 22 March 22:21

[gizlaroc]

skeeterm5 said:

re HP = all well and good if you dont want the risk of ending up after a couple of years with a car worth less than the finance on it...... so you have to keep the car for 5 years - who wants to do that?

I don't get this at all???

You are more likely to end up upside down halfway thorugh an agreement with PCP than an HP agreement.

And that is what they want...."Don't worry sir, we can take your negative equity and roll it over into a new car if you stay with us."

Edited by gizlaroc on Monday 22 March 22:24

[Deva Link]

gizlaroc said:

You are more likely to end up upside down halfway thorugh an agreement with PCP than an HP agreement.

Many people don't realise that with a PCP the Guaranteed Final Value is only available at the end of the term. The car could be worth less if you try to terminate early, and you can't even voluntary terminate a PCP like you can an HP deal as their generally constructed such that you still owe around 50% at the end of the term, so you never hit they VT point.

This caught out loads of people who wanted to ditch their SUV's early when the world turned against them a couple of years ago.

[homerjay]

my 2p

back in june 2009 i bought a 2008/08 123d M sport with 4k miles. list new was circa £30k

the car was on the forecourt for £19,995

i agreed a price at £19,250 then bmw select for the finance
£500 deposit
£375 per month over 36 months
Balloon at the end of term (figure escapes me, about 10k possibly)
rate is about 9.7% (which isnt fantastic but the best i could get from them)

i was offered 17k trade in at the same dealer recently and i currenlty owe about 17k.

at them numbers im basically renting the car and can pretty much get rid when i like.

obviously a big part of this is the 'decent' residuals of the 123d.

i think the biggest issue the OP has, is that if they buy a NEW car, the deprication will mean negative equity in the early months/years.

Edited by homerjay on Thursday 25th March 13:29

[homerjay]

Deva Link said:

gizlaroc said:

You are more likely to end up upside down halfway thorugh an agreement with PCP than an HP agreement.

Many people don't realise that with a PCP the Guaranteed Final Value is only available at the end of the term. The car could be worth less if you try to terminate early, and you can't even voluntary terminate a PCP like you can an HP deal as their generally constructed such that you still owe around 50% at the end of the term, so you never hit they VT point.

This caught out loads of people who wanted to ditch their SUV's early when the world turned against them a couple of years ago.

i can end the pcp whenever i like, just pay the settlement figure.

[Deva Link]

homerjay said:

Deva Link said:

gizlaroc said:

You are more likely to end up upside down halfway thorugh an agreement with PCP than an HP agreement.

Many people don't realise that with a PCP the Guaranteed Final Value is only available at the end of the term. The car could be worth less if you try to terminate early, and you can't even voluntary terminate a PCP like you can an HP deal as their generally constructed such that you still owe around 50% at the end of the term, so you never hit they VT point.

This caught out loads of people who wanted to ditch their SUV's early when the world turned against them a couple of years ago.

i can end the pcp whenever i like, just pay the settlement figure.

Yes you can, and, as you say in your other post, you chose a car with a good residual value. Bear in mind though that pxing is one thing, you might get a different value altogether if you needed to do a "distress" termination of the PCP.

What some people have found when they've tried to end PCPs say 6mths early, is that the car's value is less than the GFV so the settlement figure is much higher than they expected.

There seems to be an assumption that, if push comes to shove, the car will never be worth less than the GFV. This is of course wrong, but the key point is that the protection the GFV offers against falling values only applies at the end of the contract.

[homerjay]

Deva Link said:

homerjay said:

Deva Link said:

gizlaroc said:

You are more likely to end up upside down halfway thorugh an agreement with PCP than an HP agreement.

Many people don't realise that with a PCP the Guaranteed Final Value is only available at the end of the term. The car could be worth less if you try to terminate early, and you can't even voluntary terminate a PCP like you can an HP deal as their generally constructed such that you still owe around 50% at the end of the term, so you never hit they VT point.

This caught out loads of people who wanted to ditch their SUV's early when the world turned against them a couple of years ago.

i can end the pcp whenever i like, just pay the settlement figure.

Yes you can, and, as you say in your other post, you chose a car with a good residual value. Bear in mind though that pxing is one thing, you might get a different value altogether if you needed to do a "distress" termination of the PCP.

What some people have found when they've tried to end PCPs say 6mths early, is that the car's value is less than the GFV so the settlement figure is much higher than they expected.

There seems to be an assumption that, if push comes to shove, the car will never be worth less than the GFV. This is of course wrong, but the key point is that the protection the GFV offers against falling values only applies at the end of the contract.

thats fair enough.